The Mackinac Center has entered a policy fight to help protect utility customers from unreasonable, expensive, and potentially dangerous plans from one of Michigan’s large utilities.
During the January 2019 polar vortex event, when temperatures across the Midwest plunged to -20°F, three things kept the lights and heat on across Michigan: natural gas, nuclear, and coal. In contrast, wind and solar were effectively AWOL. When they were needed most, they made up less than 5% of the region’s fuel mix.
Despite these contrasting performance records, the long-term Integrated Resource Plans — IRPs — of Michigan’s utilities will place customers at the mercy of unreliable renewable energy sources. But before that happens, state regulators at the Michigan Public Service Commission must give their blessing, and the Mackinac Center’s Environmental Policy Initiative and the Mackinac Center Legal Foundation are intervening to slow or stop Consumers Energy’s latest IRP.
The company proposes to close or cease purchasing electricity from several large, reliable electricity generation facilities. (One is a nuclear plant and two others use a mix of coal, natural gas and oil.) The state-regulated monopoly wants to close them well before their useful life ends, to help it meet a completely voluntary goal of achieving net-zero CO2 emissions by 2040. Its plan will shift billions in stranded costs away from investors and onto customers.
To add insult to injury, Consumers Energy proposes to spend billions more, building unreliable solar facilities. In fact, the utility believes it can meet 90% of its customers’ needs with a mix of renewable energy, energy efficiency, energy storage and demand response by 2040. That word salad means the average customer will be forced to use less electricity, at less opportune times, and at much higher costs. The company’s fragile new electricity system will ensure utility customers consume electricity when it is available, not when it’s needed or wanted.
While the utility claims it will control costs, the Mackinac Center worked with our partners at the Center of the American Experiment to calculate the actual costs of the plan. We estimate that over the next 30 years, the IRP will impose $21.7 billion in additional costs on customers, of which $15.7 billion will go to utility profits.
One key question we ask when facing policy challenges is, “If not the Mackinac Center, who?” Sadly, it’s increasingly clear that the monopoly utilities face little to no opposition as they shutter reliable, affordable and safe generating facilities. In fact, most of the groups involved in the IRP process support this dangerous, renewable-heavy plan. Some are pushing for even more expensive and extreme outcomes.
The costs — human, economic, and environmental — of relying on solar and wind for essential electricity are becoming increasingly clear. The utility’s plans are neither reasonable nor prudent. As we have seen in both Texas and California, relying on solar and wind can be downright dangerous during periods of extreme weather.
We’re outfunded and outnumbered, but the Mackinac Center exists for this type of challenge. With your continued support, we’re confident we can make a difference.