Bill Text: MI HB4518 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Energy; alternative sources; renewable portfolio standard; increase, and provide for phase-in. Amends secs. 21, 23, 25, 27 & 31 of 2008 PA 295 (MCL 460.1021 et seq.). TIE BAR WITH: HB 4519'15

Spectrum: Partisan Bill (Democrat 40-0)

Status: (Introduced - Dead) 2015-04-28 - Printed Bill Filed 04/24/2015 [HB4518 Detail]

Download: Michigan-2015-HB4518-Introduced.html

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HOUSE BILL No. 4518

 

April 23, 2015, Introduced by Reps. Hovey-Wright, Sarah Roberts, Plawecki, Chirkun, Greig, Darany, Faris, Cochran, Pagan, LaVoy, Moss, Rutledge, Wittenberg, Hoadley, Yanez, Driskell, Townsend, Geiss, Irwin, Smiley, Kosowski, Dillon, Singh, Byrd, Garrett, Liberati, Santana, Brinks, Chang, Talabi, Phelps, Gay-Dagnogo, Zemke, Durhal, Dianda, Love, Banks, Derek Miller, Greimel and Schor and referred to the Committee on Energy Policy.

 

     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.____ or House Bill No. 4519 (request no.

 

00876'15 **) of the 98th Legislature is enacted into law.