In the last few years, the state of Michigan dealt with an energy crisis in the U.P., public concern over pipelines spanning the straits of Mackinac, the looming shut down of a significant portion of the state’s baseload energy capacity, and a complete revision of the state’s energy policy. Cherryland Electric Cooperative recently sat down with Valerie Brader, the Executive Director for the Michigan Agency for Energy, to discuss the challenges and opportunities Michigan faces as we continue to modernize our energy portfolio.
Q: How does the state view solar power production in Michigan?
Solar has gotten much cheaper. Even in 2012 it was much more expensive than other resources. Now, it is much more cost competitive. The new energy legislation asks the Michigan Public Service Commission to look at the value of solar in a very specific way. Most utilities in our lower peninsula are summer peaking utilities. That means they have the highest demand at the height of the summer when everyone’s air conditioning is turned on. Solar can be really valuable to summer peaking utilities. When it’s coming in at a time when there is plenty of other power, it can be less valuable. How valuable solar is really needs to be looked at on a utility-by-utility and state-by-state basis.
Q: What are our biggest opportunities for reducing waste in the state of Michigan?
Michigan has a huge amount of energy waste reduction opportunities. If you look around, Michigan’s housing stock is a little older than our neighbors. Older typically means the insulation is not as good. Homeowners should make sure that the lights in their home have been swapped out to LED lightbulbs, and make an effort to get insulation in the right spots. New furnaces are an opportunity, too. Just 15 years ago your furnace was probably 80% efficient, now there are 92% or 96% efficient furnaces for about the same amount of money. There really are a lot of opportunities for people to improve their homes and to be more comfortable at a lower cost of energy.
Q: What is the state of energy generating capacity in Michigan?
In the lower peninsula, about 90% of our demand must be met with in-state resources because of the physics of the grid. With all the coal plant closures, we are running a lot closer to our margins than usual. The concern is making sure that everyone, no matter who you are a customer of, is helping to pay for the new plants we need. Electricity is different from most products in that if we don’t have enough supply for everybody, nobody gets any power. The grid will collapse if supply doesn’t meet demand, causing widespread outages that take hours to fix. One of our goals is to make sure that we don’t ever face those kinds of outages. The new legislation ensures that every supplier of electricity must meet their share of reliability requirements.
Q: How much capacity do you think will be built over the next 5-10 years?
That is one thing that the new legislation will help us answer. All rate regulated utilities must file an integrated resource plan. They essentially show a prediction of what their demand is going to be and how they are going to meet it.
Q: Rep. Gary Glenn has indicated that he would like to reopen the energy package passed at the end of 2016. What is he trying to do, and will he be successful?
Rep. Gary Glenn did vote against the package. He is a strong proponent of letting everyone select their electric supplier. His goal is to really look at the ability for not just 10% of customers, but all Michigan customers to be able to select their provider for energy, the same way they do for natural gas. Sen. Mike Nofs in the senate, one of the sponsors of the legislation that was signed into law, feels strongly that it was a good effort and is not inclined to reopen it this year. We’ll see what happens. Our main goal is to ensure that we apply what did get passed and comes into effect on April 20, as well as we possibly can to make sure that we are achieving the reliable, affordable, environmentally protective energy future that Michiganders want.
Q: What is the energy solution for the Upper Peninsula?
The issue we face is that traditionally the upper peninsula has had few generating resources, so when any one of them looks like it may close, it becomes a grid stability issue that must get solved one way or another. What the upper peninsula has is a grid that covers a lot of people and places, but doesn’t have a lot of generation nicely scattered about. The proposal that’s before the commission creates two generation locations that are more modular instead of one big plant. We are also looking at connecting the upper peninsula to our Canadian neighbors across the Soo, as well as to the lower peninsula. We are excited about the ability to learn if those connections would provide some long-term cost savings and reliability benefits. We are glad to be able to explore that because having a little more power flow might be a real key for the upper peninsula to not be in the constant situation where every plant that closes presents a reliability challenge. We expect preliminary results this fall and hope to have a full answer by the end of the year.
Q: How will the Trump administration impact Michigan’s energy future?
The nice thing about Michigan is that our law we just passed lets us adapt to whatever the government does or doesn’t do. For example, in some states, whether the clean power plan is in place or not is a big deal. In Michigan, our energy system has already changed so much that we could do nothing differently for a decade and still be compliant with it. Our new legislation really puts Michigan in the driver’s seat, not Washington DC.
Listen to the full discussion on the episode “Valerie Brader on Michigan’s Energy Future” of Cherryland’s monthly podcast “Co-op Energy Talk.” Learn more about local, state, and federal energy issues by subscribing to Co-op Energy Talk for free on iTunes or on Soundcloud.