Michigan to Require Utilities to Invest in 100 Percent “Clean Energy” by 2040

Michigan has passed a robust package of clean energy bills intended to lower residents’ utility costs, create jobs, and cut emissions while reducing the state’s dependence on fossil fuel.

A report by 5 Lakes Energy found the five bills collectively will generate average energy cost savings of $145 a year per household; help the state access $7.8 billion from the Biden Administration’s Inflation Reduction Act; and create nearly 160,000 jobs.

The main bill, SB 271, establishes a 100 percent clean energy standard with the following timeline:

Other components provide incentives to support the transition to more clean energy and remove barriers to progress. Such provisions include opening up opportunities for more residents and businesses to be able to install rooftop solar. Utilities will receive incentives to expand their energy efficiency programs, intended to enable them to offer rebates to customers for enhancements such as upgrades to energy-efficient appliances, added insulation, and window replacements.

Language written into the bill ensures farmers can host solar and wind projects on their land, creating a new revenue stream for them. Communities that host energy projects will receive tax payments and other incentives.

Michigan Public Service Commission will be authorized to streamline permitting of utility-scale clean energy, and the agency will have authority to prioritize climate and equity in their regulatory decisions as energy production expands to protect marginalized communities that have historically been affected by environmental impacts.

The bills, which build on years of work to modernize Michigan’s electricity grid, were developed to align with Governor Gretchen Whitmer’s MI Healthy Climate Plan, which lays a roadmap for Michigan to reach 100 percent carbon neutrality by 2050.  Among plan objectives are to mitigate climate change impact, address environmental injustices, and, as important, to boost Michigan’s energy independence.

Today, Michigan imports all of its coal, 92 percent of its natural gas, and 97 percent of its oil and petroleum, with a total annual cost of $18 billion a year, reports the American Council for an Energy Efficient Economy.

“Michigan’s energy efficiency legislation will lower energy costs for households and further reinforce the state’s climate leadership by advancing three key elements: increasing efficiency goals, requiring a focus on low-income households, and reducing harmful burning of fossil fuels through electrification,” says Forest Bradley-Wright, state and utility program director, American Council for an Energy-Efficient Economy.

As the work shifts to implementation Michigan can look to other leading states, Bradley-Wright says. He calls out Colorado, New Jersey, New York, Massachusetts, and California who he says are achieving “high levels of energy savings,” ending subsidies for fossil fuels, and “prioritizing those who are most burdened by energy costs.”

“Pursuing specific energy efficiency strategies that complement clean energy investments will further increase affordability, strengthen reliability, and enhance resilience of the electric system,” he says.

In 2022, Michigan’s energy transition work generated 5,400 jobs, bringing the workforce in this space to 123,983 employees and placing Michigan as the lead Midwest state for clean energy jobs, according to the 2023 Clean Jobs America Report.

Michigan’s utilities are already choosing to procure renewables because solar and wind are the cheapest sources of electricity, but these bills will accelerate the transition, enabling the build-out of even more low-cost clean energy, says Laura Sherman, president of the Michigan Energy Innovation Business Council (EIBC).

Sherman says, “Michigan EIBC members, including manufacturers and renewable energy developers, are already hiring and expanding their work in Michigan to take advantage of these new opportunities.” 

Scott Viciana, vice president of Sales and Business Development at Ventower Industries, is among those expecting to capitalize on what he sees in the wings, commenting, “Ventower and other Michigan businesses in the clean energy industry stand ready to produce the components needed for this transition and grow our workforce to build, develop, and deploy new projects across the state.”  

The waste management industry could be on the receiving end as business opportunities expand. According to the bill, qualifying renewable energy resources include landfill gas; gas from anaerobic digesters that treat wastewater, sludge and sewage; and biomass and food waste. Mass burn facilities’ output also counts toward renewable electricity until 2040 if the facility began operations before 2023.

Most Michiganders are apparently behind their policymakers’ chosen direction.  A poll released by Evergreen reports that 65 percent of voters want legislation to help transition the state’s energy grid to 100 percent clean energy; 73 percent want their lawmakers to take more action to keep their energy bills at bay.

“I am proud that these bills make Michigan the best state in the Midwest for climate action and the strongest state in the nation when it comes to labor standards for clean energy production,” Governor Whitmer said in a statement.

“Together, we are fighting for our air, land, and water; improving public health; and protecting our precious natural resources for future generations. We are building the future in Michigan.”