LANSING — State lawmakers were poised to make a final push today to pass comprehensive energy and electricity legislation, after House members met behind closed doors most of the night and GOP members heard an appeal from Republican Gov. Rick Snyder.
A major thrust of the latest proposal is an attempt to bring on board Republicans in the House who believe the bills passed by the Senate in November would kill the small amount of competition in Michigan’s highly regulated electricity marketplace.
Many details were still being finalized, but amendments are being drafted so that House members, who took a break around 6 a.m. today, may be able to vote on the two-bill package when they return to the chamber at 1 p.m. today, said Gideon D’Assandro, a spokesman for House Speaker Kevin Cotter, R-Mt. Pleasant.
“We’ve got a framework,” D’Assandro told the Free Press this morning. “We’ve been moving in the right direction; we’ve been getting closer and closer to an agreement.”
Sen. Mike Nofs, R-Battle Creek, one of the architects of the energy overhaul that’s been more than two years in the making, told reporters after midnight this morning that Snyder proposed a compromise that might be central to any breakthrough.
With many Michigan coal-fired plants slated to close in the next several years, the state’s two major utilities — DTE Energy and Consumers Energy — say they need to build replacement capacity. However, they say they are only prepared to build to serve the 90% of Michigan customers who are served by Michigan’s largely regulated market — not the 10% of “electric choice” customers who buy from alternative suppliers.
To address that issue, the Senate plan included a “capacity charge” that alternative energy suppliers — in many cases brokers who don’t produce their own electricity — would have to pay the utilities to help underwrite the cost of assuring Michigan has enough electricity to meet all customer needs.
In Michigan, those electric choice customers include many school districts and manufacturers who fear the addition of an unknown capacity charge would largely kill any electricity cost savings they now enjoy.
Nofs said that under the latest proposal, that capacity charge could disappear. But as a trade-off, customers who move from alternative energy suppliers back to the major utilities as a result of price spikes would be required to remain with DTE or Consumers for at least six years, he said.
Proponents of choice “are getting a lot, and the utilities are getting a lot,” Nofs said.
While Nofs described the capacity charge as going away under the latest plan, others said the charge would have strict limits placed on it.
The requirement for a six-year commitment after a customer returns to the utilities could potentially result in the size of Michigan’s electric choice market dropping below 10% in the short term, Nofs said.
Nofs said the 15% mandate for use of renewable energy and energy sources would likely remain, though there could be a change in the way utilities are compensated for efficiency measures.
D’Assandro said another key focus in proposed changes is how the legislation would treat “net metering” for customers who produce their own electricity through measures such as solar panels.
Officials said a study would be undertaken to help calculate a tariff such customers would pay for access to the electric grid.
Toward the end of a near-20-hour session that began Wednesday, Snyder briefed majority Republicans on the proposal for more than an hour, telling reporters as he left the chamber after 5 a.m.: “We’re still working.”
Dan Bishop, a spokesman for Consumers Energy, said an “initial review is favorable re the current status of the bills,” which include an “important focus on protecting electric reliability.”
John Austerberry, a spokesman for DTE, said “we support the amendments that the governor has brought forward … and we are looking forward to approval in both the House and Senate today.”
The Associated Press contributed to this report.
Contact Paul Egan: 517-372-8660 or firstname.lastname@example.org. Follow him on Twitter @paulegan4.