Michigan reacts to federal GHG reduction requirements


Michigan is on track for now to meet federal requirements for reducing greenhouse gas (GHG) from electric power plants, officials said Dec. 29, in a program with which Gov. Rick Snyder has directed his team to comply even though the state attorney general has joined a lawsuit challenging it.

A study this fall concluded Michigan could retain existing policies -- including requiring utilities to generate at least 10% of their power from renewable sources such as wind, solar and hydropower -- for the next decade without missing deadlines under the Obama administration's Clean Power Plan, said Valerie Brader, executive director of the Michigan Agency for Energy.

Michigan currently has no output capacity limit for what it considers "renewable" hydropower, though the state does not define pumped-storage facilities as renewable energy systems.

Michigan also excludes hydropower facilities that use dams constructed after the effective date of the state's Public Act 295 of 2008, unless that dam is a repair, replacement or upgrade of a dam already in existence at the time of the act's passage.

With no pressing need for quick action, the state can "take a broad, thoughtful approach to continuing to improve air quality," said Dan Wyant, director of the Department of Environmental Quality. "Unlike many states, Michigan can continue to choose compliance pathways best suited to protecting the environment and sustaining economic development."

The federal law seeks a 32% nationwide reduction in GHG from 2005 levels by 2030. Each state has its own target and must craft a plan for meeting it.

Michigan's required cut is 31%. The state will submit a draft strategy to the U.S. Environmental Protection Agency by September 2016 but will request a two-year extension for completing a final version. The delay is necessary to follow the state's process for writing new regulations, Wyant said.

The federal program is unpopular with many of Snyder's fellow Republicans, including Attorney General Bill Schuette, who is part of a lawsuit filed by officials in more than two dozen states. Brader said it was better for Michigan to make its own rules than leave the job to "Washington bureaucrats."

State officials based their assessment of Michigan's prospects of meeting the federal requirements on models developed by Synapse Energy Economics Inc., a private contractor. The company developed scenarios with a number of assumptions, including that power companies will follow through on announced plans to retire 25 coal-fired plants by 2020.

Also built into the calculations were predictions that renewable energy production won't decline but energy waste will fall by 1% a year, which officials described as a conservative estimate, as Michigan's utilities are cutting waste 1.4% a year. The model presumes Michigan's demand for electric power will exceed its historical average, now rising 1.2% annually.

James Clift, policy director for the Michigan Environmental Council, said the study is flawed because it's based on unrealistic projections of low natural gas prices over the next 10 years. A stronger plan would boost the requirement for renewable energy production well above 10% and demand even more efficiency, he said.

"As this modeling continues, hopefully we'll get information showing there is wisdom in not just sitting on our hands and hoping we'll be OK," Clift said.

The state will seek advice on the draft plan from interested parties including business and environmental groups and elected officials, Brader said.

Legislation pending in the Republican-led Michigan House would set a goal of getting 30% of the state's energy from renewables and waste reduction by 2025, although it wouldn't be mandatory.

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