Inside Clean Energy: A Michigan Utility Just Raised the Bar on Emissions-Cutting Plans

insideclimatenews

Dan Gearino

BY DAN GEARINO

FEB 27, 2020

Credit: Kerry Sheridan/AFP/Getty Images

At least a half-dozen U.S. utilities have released plans to get to net-zero emissions, or close to it, by 2050. Now a Michigan company has elbowed its way into the mix and said, “We can top that.”

Consumers Energy of Jackson, Michigan, said this week that it will get to net-zero emissions by 2040, the fastest timetable of any major utility in the country.

The company is doing this with a plan that differs from those of the other utilities and includes building no new fossil-fuel power plants.

“We often say that no one can do everything, but everyone can do something,” said Patti Poppe, Consumers’ president and CEO, in a statement. “Consumers Energy is proud to do our part to protect the planet with our new goal, and we look forward to working with Michigan residents to help them understand and do their part so we can accomplish great things together.”

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I’m not surprised that the company is stepping forward in this way. I wrote last year about how Consumers was a leader in pledging to cut its emissions by 90 percent by 2040, a commitment that is all the more meaningful in Michigan, where coal and natural gas remain essential fuels for producing electricity.

The company is now saying it can get to net-zero by 2040 because its emissions would be small enough that they could be offset through a variety of methods, including storing carbon underground, capturing methane from landfills and planting trees. The idea behind carbon offsets is that they will make up for any remaining emissions from the company’s electricity generation.

Consumers Energy said in 2018 that it was not planning to build any more fossil fuel power plants. By 2040, it will be down to a small share of its current natural gas plants to go along with wind, solar, battery storage, and programs that will reduce electricity consumption. (The company also will no longer use nuclear power because the Palisades Nuclear Generating Station, which is owned by another company but sells power to Consumers, is scheduled to shut down in 2022.)

“My first impression is that I actually think it might be a real plan,” said Margrethe Kearney, a Michigan-based staff attorney for the Environmental Law and Policy Center. “I feel much more optimistic about this plan than I feel about others that I have seen.”

Her implication is that some of the net-zero plans put forward by other utilities are not real, with vague or unrealistic assumptions and interim steps that don’t seem to be in line with the idea of drastically reducing emissions.

David Pomerantz, who closely follows utilities’ energy-transition plans for the watchdog Energy and Policy Institute, says Consumers’ plan “looks like a good-faith effort, which I would not say for every utility with a net-zero plan.”

One element that jumped out at him is that Consumers says its commitment includes electricity it buys from the open market that has been generated by others. This is different from nearly all other companies that limit their pledges to the electricity they generate themselves.

Pomerantz sees this detail as a sign that Consumers has thought deeply about what a net-zero commitment means and how to do it.

Xcel Energy of Minnesota was the first large U.S. utility to make a net-zero pledge in December 2018, saying it would reach the mark by 2050. Clean energy advocates have warmly greeted the Xcel plan, although they are critical of the company’s desire to expand the use of natural gas during the transition to net-zero.

Duke Energy, Dominion Energy and DTE Energy are three others that have net-zero plans. Advocates have criticized all three for wanting to make substantial investments in new natural gas plants and for not closing other fossil fuel plants quickly enough. (DTE is Michigan’s largest utility, and Consumers is the second largest.)

For more on Poppe, check out a story published last year by Bridge Magazine in Michigan in which reporter Jim Malewitz spoke with Poppe about why she decided it was time for her company to move on from coal and embrace renewables..

“We connected the dots,” she said in that story. “We could do what was right and be more aggressive than we had been before. Because the economics and the planet benefits were aligned.”

Michigan’s Other Big Utility Gets Sent Back to the Drawing Board

It’s not just clean energy advocates raising concerns about DTE’s approach. Last week, the Michigan Public Service Commission ordered DTE to make changes to its plan for managing power plants over the next 15 years.

The state regulator largely agreed with DTE’s critics, who said the company did not do enough to explore the possibility of using more wind and solar as cost-effective alternatives, and did not propose ambitious enough programs to help customers reduce their energy use.

Credit: Ken Lund/CC-BY-SA-2.0

The commission said the shortcomings in DTE’s plan amount to “fundamental flaws” that mean the company needs to rewrite the document and resubmit it.

DTE had proposed to keep the coal-fired Belle River power plant open until 2030. The commission said that the company should consider closing Belle River sooner because it could save the cost of upgrades needed at the plant and that less expensive options are probably available.

DTE and other parties have until March 6 to submit comments in response to the order.

Michigan has only been doing power-plant planning this way for a few years, so there is no precedent for the kind of rejection DTE received, and it’s difficult to say what happens if DTE and the commission are unable to agree.

Notably, two of the commission’s three members are appointees of Gov. Gretchen Whitmer, a Democrat who took office in 2019. She has had a difficult time getting her agenda passed by the Republican-controlled legislature, but has been able to make changes through appointments and executive orders.

Kearney, from the Environmental Law and Policy Center, said the new appointees to the Public Service Commission clearly are having an effect, but not in a political way.

“Both of the new commissioners have an understanding of how energy is changing and how energy markets are changing,” she said.

Taken together, the Consumers plan and the commission’s action on DTE’s proposal show that Michigan is at the forefront of transforming its electricity system.

“It’s awesome because it feels like Michigan is a leader,” Kearney said.

California Rooftop Solar Mandate Gets a Big Exception

A ruling by California regulators may be a sign that the state’s new rooftop solar requirement will be narrower in scope than its backers had hoped.

The California Energy Commission voted last week to approve a Sacramento utility’s proposal to exclude builders in its territory from having to build rooftop solar, if residents of the new houses subscribe to the utility’s community solar program.

Depending on whom you ask, this is either a reasonable exception to the state mandate or an unfortunate step toward watering down the rules to the point that they are close to meaningless.

“Openness to diverse cost-effective solutions is a hallmark of California’s innovation economy and key to meeting our goals for clean energy, climate, and resilience.”  said Commissioner J. Andrew McAllister, a member of the panel that issued the ruling, in a statement. The solar requirement, which took effect Jan. 1, applies to new houses.

This comes down to a disagreement over what the rooftop solar mandate is supposed to mean, whether it is about customers generating their own electricity or a broader idea of the importance of reducing emissions and switching to renewable energy.

If it’s the latter, then the proposal from Sacramento Municipal Utility District is not as controversial. The utility wants to develop community solar—solar arrays that sell their power to subscribers—and argues that its approach will save consumers’ money and provide about the same emissions benefits.

The problem, in the eyes of opponents, is that there is a big difference between a utility developing and selling solar and customers owning it themselves. Customers who have their own solar are less dependent on the grid, which has broad implications because California is looking for ways to reduce fires caused by sparks from utility wires.

“Mark my words,” said state Sen. Scott Wiener of San Francisco to the energy commission during a hearing last week, “it will undermine rooftop solar and storage … and will set a precedent for other utilities to do the same.”

That quote was from a Sacramento Bee story which has a good rundown of the arguments on both sides.

The talk about whether this is precedent-setting is largely speculation at this point. If many other utilities come forward with requests for exceptions, and those requests are granted, then last week’s decision was a big moment.

Here’s a Map that Shows the March of ‘100 Percent’ Commitments Across the Country

As states, cities and utilities make commitments to go to 100 percent carbon-free energy, it can be difficult to make sense of what’s happening and where.

So I was pleased to see a new interactive map from the Natural Resources Defense Council that shows all of this, and that will be updated as governments and companies make additional announcements.

Sophia Ptacek, an NRDC program assistant who helped put the map together, noted that about one-third of all Americans live in a city or state that has committed to 100 percent carbon-free electricity. That figure comes from a November report from UCLA’s Luskin Center for Innovation.

“The momentum is clear,” she said in a blog post. “By pledging to reduce additional greenhouse gas emissions and energy use over the next several years, America’s states, cities and counties, utilities, and corporations have demonstrated a readiness to take on the climate challenge long-term.”

Check out the interactive map to see whether your city, state or utility are listed. The accompanying narrative also has some important tips for understanding the commitments, including how the term “clean energy” often means different things to different people, which means we should ask what it means in each case.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to dan.gearino@insideclimatenews.org.

ABOUT THE AUTHOR

Dan Gearino

Dan Gearino covers the U.S. Midwest, part of ICN’s National Environment Reporting Network. His coverage deals with the business side of the clean-energy transition and he writes ICN’s Inside Clean Energy newsletter. He came to ICN in 2018 after a nine-year tenure at The Columbus Dispatch, where he covered the business of energy and won state and national awards for his work, including from the Society of American Business Editors and Writers and the National Headliner Awards. Before that, he covered politics and business in his native Iowa and in New Hampshire, working as a newspaper reporter and an occasional radio correspondent. He grew up in Warren County, Iowa, just south of Des Moines, and is an alumnus of Macalester College in St. Paul. He lives in Columbus, Ohio with his wife and two daughters. Reach Dan at dan.gearino@insideclimatenews.org.