ACHRNEWS

Michigan Passes Energy Legislation With EERS

November 10, 2008

LANSING, Mich. - The American Council for an Energy Efficient Economy (ACEEE) reported that the Michigan legislature passed a significant utility Energy Efficiency Resource Standard (EERS) as a part of comprehensive energy legislation. The bill (SB213) contains an EERS that starts with an annual electricity savings requirement of 0.3 percent of total sales in 2009, ramping up to 1 percent per year by 2012, and continues at that level each year thereafter (0.75 percent for natural gas utilities). Michigan joins 17 other states that have EERSs, according to ACEEE’s latest tally.

ACEEE Utilities Program Director, Dr. Martin Kushler, who resides in Michigan, was extensively involved in developing this new state policy. After the legislation passed both chambers, he noted, “This is a big step forward for Michigan, and personally, I’m pleased that my home state will no longer be known as the ‘no-program control group’ for energy program evaluations in other states.”

The energy-efficiency components of this legislation were patterned after the analyses conducted as part of the “Michigan 21st Century Electric Energy Plan” that was released by the Michigan Public Service Commission in 2007. That plan concluded that energy efficiency of this magnitude would save Michigan ratepayers over $3 billion, and avoid the need for two additional major base load power plants.

This new Michigan legislation also authorizes “shareholder incentives” for utilities that exceed the energy-savings requirements, and contains a provision allowing for “decoupling” for natural gas utilities that provide energy-efficiency programs. The legislative package also includes a renewable portfolio standard (RPS), which ramps up to 10 percent of total sales by 2015.

Publication date: 11/10/2008