by Gongwer News Service
September 15, 2008

Even though it seems that there have been more cancelled meetings recently than actual negotiations over the energy package, observers still hope for a compromise on the reform package this week. That’s especially true because Governor Jennifer Granholm made it clear she doesn’t want to arrive on this week’s trade mission in Japan without an energy plan in hand.

The governor expressed optimism late last week that a tentative agreement would be finished by the time she boards her plane, but yet more cancelled committee meetings on Thursday and lack of action on related bills in the House or Senate mean a settlement of the package may be less imminent than Ms. Granholm hopes.

From the early phases of the package, there was a strong message of urgency to complete legislation that would send out a welcome to alternative energy companies. Yet it seems no one involved predicted how difficult it would be to reach a compromise, especially on the issue of a renewable portfolio standard, a number that lawmakers say has to balance attracting alternative energy producers with keeping energy prices affordable.

While those involved have continued their stance that meetings between all vested parties have been ongoing and productive in reaching a compromise, the biggest holdup still appears to be SB 213, which would create a renewal portfolio standard directing that a certain percentage of electricity generated in Michigan would have to come from renewal resources (which could include a coal plant where emissions are trapped and sealed underground).

The pending legislation would commit Michigan to obtaining 10 percent of its energy through renewable sources by 2015. It also provides incentives for Consumers Energy and DTE Energy to build new power plants and increase rates for individual customers, as the current set-up requires residential rates to be subsidized.

Conference committees that were set to adopt SB 213 and HB 5524 last Thursday cancelled their meetings, and the Public Service Commission, which reportedly was poised to act on an alternative approach to impose a renewable energy standard for regulated utilities, also cancelled a meeting scheduled for that afternoon.

Those close to the process had speculated early Thursday that the PSC meeting was set to allow the commission to begin moving forward with the orders it would need to implement the agreement. Because that agreement never came, there was no need for the commission to act.

Rep. Frank Accavitti (D-Eastpointe), the House Democratic point person on the energy package, told reporters in the afternoon that legislators still need to work out the kinks in the RPS portion of the energy package (SB 213), but he believes the utility re-regulation portion (HB 5524) is practically ready to go.

While it’s the biggest sticking point, the RPS may also be the biggest selling point when the governor meets with 22 companies in Japan, especially the firms engaged in wind energy projects, she told reporters last week.

In noting a study that estimates Michigan could gain 60,000 jobs through new investments in alternative energy, Ms. Granholm said she hopes to be able to attract companies with a plan that shows that alternative energy is a major focus for the state.

The governor said that the framework for a plan is in place and that she expects that legislators will have their “t’s crossed and i’s dotted” by the time she leaves for Japan on Monday.

But memorializing the plan into law won’t come until at least mid week, since the conference committee on HB 5524 is scheduled to meet on Tuesday. A meeting to deal with the RPS legislation wasn’t yet posted as of Friday.

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