April 23, 2015, Introduced by Senators HOPGOOD, KNEZEK, ANANICH, SMITH, HERTEL, WARREN, YOUNG, HOOD, JOHNSON, GREGORY and BIEDA and referred to the Committee on Energy and Technology.
A bill to amend 2008 PA 295, entitled
"Clean, renewable, and efficient energy act,"
by amending sections 21, 23, 25, 27, and 31 (MCL 460.1021,
460.1023, 460.1025, 460.1027, and 460.1031).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 21. (1) This section applies only to electric providers
whose rates are regulated by the commission.
(2) Each electric provider shall file a proposed renewable
energy plan with the commission within 90 days after the commission
issues
a temporary order under section 171. 191. The proposed plan
shall meet all of the following requirements:
(a) Describe how the electric provider will meet the renewable
energy standards.
(b) Specify whether the number of megawatt hours of
electricity used in the calculation of the renewable energy credit
portfolio will be weather-normalized or based on the average number
of megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the plan is approved by the commission, this option
shall not be changed.
(c)
Include the expected incremental cost of compliance with
the
renewable energy standards for a 20-year period beginning when
the
plan is approved by the commission.
(c) (d)
For an electric provider that had
1,000,000 or more
retail customers in this state on January 1, 2008, describe the
bidding process to be used by the electric provider under section
33. The description shall include measures to be employed in the
preparation of requests for proposals and the handling and
evaluation of proposals received to ensure that any bidder that is
an
affiliate of the electric utility provider is not afforded a
competitive advantage over any other bidder and that each bidder,
including any bidder that is an affiliate of the electric provider,
is treated in a fair and nondiscriminatory manner.
(3)
The proposed plan shall establish a nonvolumetric
mechanism
for the recovery of the incremental costs of compliance
within
the electric provider's customer rates. The revenue recovery
mechanism
shall not result in rate impacts that exceed the monthly
maximum
retail rate impacts specified under section 45. The revenue
recovery
mechanism is subject to adjustment under sections 47(4)
and
49. A customer participating in a commission-approved voluntary
renewable
energy program under an agreement in effect on the
effective
date of this act shall not incur charges under the
revenue
recovery mechanism unless the charges under the revenue
recovery
mechanism exceed the charges the customer is incurring for
the
voluntary renewable energy program. In that case, the customer
shall
only incur the difference between the charge assessed under
the
revenue recovery mechanism and the charges the customer is
incurring
for the voluntary renewable energy program. The
limitation
on charges applies only during the term of the
agreement,
not including automatic agreement renewals, or until 1
year
after the effective date of this act, whichever is later.
Before
entering an agreement with a customer to participate in a
commission-approved
voluntary renewable energy program and before
the
last automatic monthly renewal of such an agreement that will
occur
less than 1 year after the effective date of this act, an
electric
provider shall notify the customer that the customer will
be
responsible for the full applicable charges under the revenue
recovery
mechanism and under the voluntary renewable energy program
as
provided under this subsection.
(4)
If proposed by the electric provider in its proposed plan,
the
revenue recovery mechanism shall result in an accumulation of
reserve
funds in advance of expenditure and the creation of a
regulatory
liability that accrues interest at the average short-
term
borrowing rate available to the electric provider during the
appropriate
period. If proposed by the electric provider in its
proposed
plan, the commission shall establish a minimum balance of
accumulated
reserve funds for the purposes of section 47(4).
(3) (5)
The commission shall conduct a
contested case hearing
on the proposed plan filed under subsection (2), pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328. If a renewable energy generator files a petition to
intervene in the contested case in the manner prescribed by the
commission's rules for interventions generally, the commission
shall
grant the petition. Subject to subsections (6) (4) and
(10),
(8), after the hearing and within 90 days after the proposed plan
is filed with the commission, the commission shall approve, with
any changes consented to by the electric provider, or reject the
plan.
(4) (6)
The commission shall not approve an
electric
provider's plan unless the commission determines both of the
following:
(a) That the plan is reasonable and prudent. In making this
determination, the commission shall take into consideration
projected costs and whether or not projected costs included in
prior plans were exceeded.
(b) That the life-cycle cost of renewable energy acquired or
generated under the plan less the projected life-cycle net savings
associated with the provider's energy optimization plan does not
exceed the expected life-cycle cost of electricity generated by a
new conventional coal-fired facility. In determining the expected
life-cycle cost of electricity generated by a new conventional
coal-fired facility, the commission shall consider data from this
state and the states of Ohio, Indiana, Illinois, Wisconsin, and
Minnesota,
including , if applicable, the life-cycle costs of the
renewable energy system and new conventional coal-fired facilities.
When determining the life-cycle costs of the renewable energy
system and new conventional coal-fired facilities, the commission
shall use a methodology that includes, but is not limited to,
consideration of the value of energy, capacity, and ancillary
services. The commission shall also consider other costs such as
transmission, economic benefits, and environmental costs,
including, but not limited to, greenhouse gas constraints or taxes.
In performing its assessment, the commission may utilize other
available data, including national or regional reports and data
published by federal or state governmental agencies, industry
associations, and consumer groups.
(7)
An electric provider shall not begin recovery of the
incremental
costs of compliance within its rates until the
commission
has approved its proposed plan.
(5) (8)
Every 2 years after initial
approval of a plan under
subsection
(5), (3), the commission shall review the plan. The
commission shall conduct a contested case hearing on the plan
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL
24.201 to 24.328. The annual renewable cost reconciliation
under
section 49 for that year may be joined with the overall plan
review
in the same contested case hearing. Subject
to subsections
(6)
(4) and (10), (7), after the hearing, the
commission shall
approve, with any changes consented to by the electric provider, or
reject the plan and any proposed amendments to the plan.
(6) (9)
If an electric provider proposes to
amend its plan at
a time other than during the biennial review process under
subsection
(8), (5), the electric provider shall file the proposed
amendment with the commission. If the proposed amendment would
modify the revenue recovery mechanism, the commission shall conduct
a contested case hearing on the amendment pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328.
The annual renewable cost reconciliation under section 49
may
be joined with the plan amendment in the same contested case
proceeding.
Subject to subsections (6) (4) and
(10), (7), after the
hearing and within 90 days after the amendment is filed, the
commission shall approve, with any changes consented to by the
electric provider, or reject the plan and the proposed amendment or
amendments to the plan.
(7) (10)
If the commission rejects a
proposed plan or
amendment under this section, the commission shall explain in
writing the reasons for its determination.
(8) Not later than 1 year after the effective date of the 2015
amendatory act that amended section 27, each electric provider
shall file with the commission a plan amendment to comply with the
increased renewable energy portfolio requirements of section 27.
Sec. 23. (1) This section applies only to alternative electric
suppliers and cooperative electric utilities that have elected to
become member-regulated under the electric cooperative member-
regulation act, 2008 PA 167, MCL 460.31 to 460.39.
(2)
Each alternative electric supplier or cooperative electric
utility
provider shall file a proposed renewable energy plan with
the commission within 90 days or 120 days, respectively, after the
commission
issues a temporary order under section 171. 191. The
proposed plan shall meet all of the following requirements:
(a) Describe how the electric provider will meet the renewable
energy standards.
(b) Specify whether the number of megawatt hours of
electricity used in the calculation of the renewable energy
portfolio will be weather-normalized or based on the average number
of megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the plan is approved by the commission, this option
shall not be changed.
(3) The commission shall provide an opportunity for public
comment on the proposed plan filed under subsection (2). After the
opportunity for public comment and within 90 days after the
proposed plan is filed with the commission, the commission shall
approve, with any changes consented to by the electric provider, or
reject the plan.
(4) Every 2 years after initial approval of a plan under
subsection (3), the commission shall review the plan. The
commission shall provide an opportunity for public comment on the
plan. After the opportunity for public comment, the commission
shall approve, with any changes consented to by the electric
provider, or reject any proposed amendments to the plan.
(5) If an electric provider proposes to amend its plan at a
time other than during the biennial review process under subsection
(4), the electric provider shall file the proposed amendment with
the commission. The commission shall provide an opportunity for
public comment on the amendment. After the opportunity for public
comment and within 90 days after the amendment is filed, the
commission shall approve, with any changes consented to by the
electric provider, or reject the amendment.
(6) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
(7) Not later than 1 year after the effective date of the 2015
amendatory act that amended section 27, each electric provider
shall file with the commission a plan amendment to comply with the
increased renewable energy portfolio requirements of section 27.
Sec. 25. (1) This section applies only to municipally-owned
electric utilities.
(2) Each electric provider shall file a proposed renewable
energy plan with the commission within 120 days after the
commission
issues a temporary order under section 171. 191. Two
or
more electric providers that each serve fewer than 15,000 customers
may file jointly. The proposed plan shall meet all of the following
requirements:
(a) Describe how the electric provider will meet the renewable
energy standards.
(b) Specify whether the number of megawatt hours of
electricity used in the calculation of the renewable energy credit
portfolio will be weather-normalized or based on the average number
of megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the commission determines that the proposed plan
complies with this act, this option shall not be changed.
(c)
Include the expected incremental cost of compliance with
the
renewable energy standards.
(c) (d)
Describe the manner in which the
provider will
allocate costs.
(3) Subject to subsection (6), the commission shall provide an
opportunity for public comment on the proposed plan filed under
subsection (2). After the applicable opportunity for public comment
and within 90 days after the proposed plan is filed with the
commission, the commission shall determine whether the proposed
plan complies with this act.
(4) Every 2 years after the commission initially determines
under subsection (3) that a renewable energy plan complies with
this act, the commission shall review the plan. Subject to
subsection (6), the commission shall provide an opportunity for
public comment on the plan. After the applicable opportunity for
public comment, the commission shall determine whether any
amendment to the plan proposed by the provider complies with this
act. The proposed amendment is adopted if the commission determines
that it complies with this act.
(5) If a provider proposes to amend its renewable energy plan
at a time other than during the biennial review process under
subsection (4), the provider shall file the proposed amendment with
the commission. Subject to subsection (6), the commission shall
provide an opportunity for public comment on the amendment. After
the applicable opportunity for public comment and within 90 days
after the amendment is filed, the commission shall determine
whether the proposed amendment to the plan complies with this act.
The proposed amendment is adopted if the commission determines that
it complies with this act.
(6) The commission need not provide an opportunity for public
comment under subsection (3), (4), or (5) if the governing body of
the provider has already provided an opportunity for public comment
and filed the comments with the commission.
(7) If the commission determines that a proposed plan or
amendment under this section does not comply with this act, the
commission shall explain in writing the reasons for its
determination.
(8) Not later than 1 year after the effective date of the 2015
amendatory act that amended section 27, each electric provider
shall file with the commission a plan amendment to comply with the
increased renewable energy portfolio requirements of section 27.
Sec.
27. (1) Subject to sections section
31, and 45, and in
addition to the requirements of subsection (3), an electric
provider that is an electric utility with 1,000,000 or more retail
customers in this state as of January 1, 2008 shall achieve a
renewable energy capacity portfolio of not less than the following:
(a) For an electric provider with more than 1,000,000 but less
than 2,000,000 retail electric customers in this state on January
1, 2008, a renewable energy capacity portfolio of 200 megawatts by
December 31, 2013 and 500 megawatts by December 31, 2015.
(b) For an electric provider with more than 2,000,000 retail
electric customers in this state on January 1, 2008, a renewable
energy capacity portfolio of 300 megawatts by December 31, 2013 and
600 megawatts by December 31, 2015.
(2) An electric provider's renewable energy capacity portfolio
shall be calculated by adding the following:
(a) The nameplate capacity in megawatts of renewable energy
systems owned by the electric provider that were not in commercial
operation
before the effective date of this act October 6, 2008.
(b) The capacity in megawatts of renewable energy that the
electric provider is entitled to purchase under contracts that were
not
in effect before the effective date of this act October 6,
2008.
(3)
Subject to sections section
31, and 45, an electric
provider shall achieve a renewable energy credit portfolio as
follows:
(a) In 2012, 2013, 2014, and 2015, a renewable energy credit
portfolio based on the sum of the following:
(i) The number of renewable energy credits from electricity
generated
in the 1-year period preceding the effective date of this
act
October 6, 2008 that would have been transferred to the
electric provider pursuant to section 35(1), if this act had been
in effect during that 1-year period.
(ii) The number of renewable energy credits equal to the
number of megawatt hours of electricity produced or obtained by the
electric
provider in the 1-year period preceding the effective date
of
this act October 6, 2008 from renewable energy systems for which
recovery
in electric rates was approved on the effective date of
this
act as of October 6, 2008.
(iii) Renewable energy credits in an amount calculated as
follows:
(A) Taking into account the number of renewable energy credits
under subparagraphs (i) and (ii), determine the number of
additional renewable energy credits that the electric provider
would
need to reach a 10% renewable energy credit portfolio in that
year equal to 10% of the number of megawatt hours provided by the
electric provider as determined for that year subject to section
21(2)(b).
(B) Multiply the number under sub-subparagraph (A) by 20% for
2012, 33% for 2013, 50% for 2014, and 100% for 2015.
(b)
In 2016 and each year thereafter through
2021, maintain a
renewable energy credit portfolio that consists of at least the
same number of renewable energy credits as were required in 2015
under subdivision (a).
(c) In 2022, a 20% renewable energy credit portfolio.
(d) In 2023 and each year thereafter, a renewable energy
credit portfolio that consists of at least the same number of
renewable energy credits as were required in 2022 under subdivision
(c).
(4) An electric provider's renewable energy credit portfolio
shall be calculated as follows:
(a) Determine the number of renewable energy credits used to
comply with this subpart during the applicable year.
(b) Divide by 1 of the following at the option of the electric
provider as specified in its renewable energy plan:
(i) The number of weather-normalized megawatt hours of
electricity sold by the electric provider during the previous year
to retail customers in this state.
(ii) The average number of megawatt hours of electricity sold
by the electric provider annually during the previous 3 years to
retail customers in this state.
(c) Multiply the quotient under subdivision (b) by 100.
(5) Subject to subsection (6), each electric provider shall
meet the renewable energy credit standards with renewable energy
credits obtained by 1 or more of the following means:
(a) Generating electricity from renewable energy systems for
sale to retail customers.
(b) Purchasing or otherwise acquiring renewable energy credits
with or without the associated renewable energy.
(6) An electric provider may substitute energy optimization
credits, advanced cleaner energy credits with or without the
associated advanced cleaner energy, or a combination thereof for
renewable energy credits otherwise required to meet the renewable
energy credit standards if the substitution is approved by the
commission. However, commission approval is not required to
substitute advanced cleaner energy from industrial cogeneration for
renewable energy credits. The commission shall not approve a
substitution unless the commission determines that the substitution
is cost-effective compared to other sources of renewable energy
credits and, if the substitution involves advanced cleaner energy
credits, that the advanced cleaner energy system provides carbon
dioxide emissions benefits. In determining whether the substitution
of advanced cleaner energy credits is cost-effective, the
commission shall include as part of the costs of the system the
environmental costs attributed to the advanced cleaner energy
system, including the costs of environmental control equipment or
greenhouse gas constraints or taxes. The commission's
determinations shall be made after a contested case hearing that
includes consultation with the department of environmental quality
on the issue of carbon dioxide emissions benefits, if relevant, and
environmental costs.
(7) Under subsection (6), energy optimization credits,
advanced cleaner energy credits, or a combination thereof shall not
be used by a provider to meet more than 10% of the renewable energy
credit standards. Advanced cleaner energy from advanced cleaner
energy systems in existence on January 1, 2008 shall not be used by
a provider to meet more than 70% of this 10% limit. This 10% limit
does not apply to advanced cleaner energy credits from plasma arc
gasification.
(8) Substitutions under subsection (6) shall be made at the
following rates per renewable energy credit:
(a) One energy optimization credit.
(b) One advanced cleaner energy credit from plasma arc
gasification or industrial cogeneration.
(c) Ten advanced cleaner energy credits other than from plasma
arc gasification or industrial cogeneration.
Sec. 31. (1) Upon petition by an electric provider, the
commission may for good cause grant 2 extensions of the 2015 and 2
extensions of the 2022 renewable energy standard deadline under
section 27. Each extension shall be for up to 1 year.
(2) If 2 extensions of the 2015 or 2 extensions of the 2022
renewable energy standard deadline have been granted to an electric
provider under subsection (1), upon subsequent petition by the
electric provider at least 3 months before the expiration of the
second
extended extension of that
deadline, the commission shall,
after consideration of prior extension requests under this section
and for good cause, establish a revised renewable energy standard
attainable by the electric provider. If the electric provider
achieves the revised renewable energy standard, the provider is
considered to be in compliance with the renewable energy standard
otherwise required to be achieved under this subpart by that
deadline.
(3)
An electric provider that makes a good faith effort to
spend
the full amount of incremental costs of compliance as
outlined
in its approved renewable energy plan and that complies
with its approved plan, subject to any approved extensions or
revisions, shall be considered to be in compliance with this
subpart.
(4) As used in this section, "good cause" includes, but is not
limited to, the electric provider's inability, as determined by the
commission, to meet a renewable energy standard because of a
renewable energy system feasibility limitation including, but not
limited to, any of the following:
(a) Renewable energy system site requirements, zoning, siting,
land use issues, permits, including environmental permits, any
certificate
of need necessity process under section 6s of 1939 PA
3, MCL 460.6s, or any other necessary governmental approvals that
effectively limit availability of renewable energy systems, if the
electric provider exercised reasonable diligence in attempting to
secure the necessary governmental approvals. For purposes of this
subdivision, "reasonable diligence" includes, but is not limited
to, submitting timely applications for the necessary governmental
approvals and making good faith efforts to ensure that the
applications are administratively complete and technically
sufficient.
(b)
Equipment cost or availability issues including electrical
equipment
or renewable energy system component shortages or high
costs
that High costs of or
shortages of renewable energy system
components or electrical equipment if the high costs or shortages
effectively limit availability of renewable energy systems.
(c) Cost, availability, or time requirements for electric
transmission and interconnection.
(d) Projected or actual unfavorable electric system
reliability or operational impacts.
(e) Labor shortages that effectively limit availability of
renewable energy systems.
(f) An order of a court of competent jurisdiction that
effectively limits the availability of renewable energy systems.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. 297
of the 98th Legislature is enacted into law.