Court Decision Could Transform Renewable Energy Mandate in Michigan

June 18, 2013

In his recent Op-Ed in Michigan Capitol Confidential, Kevon Martis points to a June 7th court decision by the U.S. Court of Appeals for the Seventh Circuit that may transform Michigan’s renewable energy mandate.

Martis writes:

Writing for the majority, Judge Richard Posner wrote: “Michigan cannot, without violating the commerce clause of Article I of the Constitution, discriminate against out-of-state renewable energy.”

That single sentence may throw into jeopardy Michigan’s entire renewable energy mandate, Public Act 295, which requires Michigan utilities to generate 10 percent of their electricity from in-state renewable sources by 2015.

He continues:

Judge Posner’s opinion means those out-of-state low-priced producers of renewable energy must be given equal access to Michigan’s energy market. All that remains is for a wind producer to legally challenge PA 295 and demand their constitutional right to participate in Michigan’s renewable energy mandate. The ruling suggests they will prevail.

The impact could be profound and far-reaching.

For wind developers wishing to induce municipalities to adopt wind-friendly zoning, they must abandon their current mantra of using the law to tell communities that they might as well agree to building wind farms because the state eventually will force the issue.

Wind energy developers will have to discover a means to generate wind energy at a competitive price in a state with a regionally anemic wind resource, or they’ll have to walk away.

Proponents of subsidizing wind energy boast the notion of ‘green energy and green Michigan jobs.’ But because of Judge Posner’s ruling, DTE and Consumer’s should no longer be required to purchase the more expensive in-state energy.

Martis argues that the proponents of wind energy through subsidies can no longer make the ‘green jobs’ argument.

For those who truly wish to protect Michigan’s air and water, Judge Posner’s opinion tosses into the waste bin the most effective, yet most specious, argument in support of wind development: green jobs.

There now is no reason to believe PA 295 will ever drive a boom in turbine manufacturing in Michigan or any other state with uncompetitive wind resources. The debate about environmental impacts of power generation can now refocus on the only metric that ever really mattered: price per unit-of-emissions avoided. And in this regard, industrial wind is a colossal loser, losing badly to combined cycle gas turbines, and if natural gas prices rise significantly, to nuclear as well.

For those Michigan residents who desire energy policy that is both economically and environmentally efficient, this ruling has opened a window of opportunity for a new element to enter the renewable energy debate: truth. It will be interesting indeed to see how Michigan’s energy industry and its regulators respond.

Read Kevon’s entire article here.

Kevon Martis is senior policy analyst for the Interstate Informed Citizen’s Coalition Inc., a bipartisan grassroots renewable energy watchdog group based in Blissfield, Mich.

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