Ignorance of the law is no excuse for leaving running vehicle unattended, police chief says
A Roseville man named Taylor Nicholas Trupiano received a $128 ticket after he left his car running unattended in his girlfriend's driveway on Jan. 5. After starting the car and then heading inside, he came back a few minutes later to find he had been ticketed, but no police car was in sight. "Vehicle parked in drive at [street address] with keys in ignition, motor running - no one around," reads the ticket. Trupiano took to Facebook under the name “Nick Taylor” to vent his frustration, posting a photo of the ticket with a strongly-worded caption criticizing the officer who issued it.
Trupiano says he had left his car running while he stepped inside his girlfriend's house because it was very cold outside. Roseville police chief James Berlin said that leaving a vehicle running unattended violates a local ordinance. He said the behavior poses a threat to public safety. "You can't do it. You see it all the time, people hop in a running car and steal them. Something bad happens when that occurs," Berlin told Fox 2 Detroit (WJBK-TV).
Although there is no state law that prohibits leaving a running vehicle unattended, Berlin said five to 10 running and unattended cars are stolen in the city every year, driving up insurance costs and the crime rate. "It's common sense," he added. "We can't warn everybody of the law there is [sic]."
That’s true enough. The number of crimes on the books in Michigan is vast, and growing. A Mackinac Center study found that the Michigan penal code contains 918 sections and includes over 3,100 crimes - significantly more than that of neighboring states of Ohio, Illinois and Wisconsin.
And those are just the state laws. They do not include state or federal regulations and rules or city ordinances. Trupiano's ticket goes to show that Michiganders are still held to the "ignorance of the law is no excuse" principle, even though our lawmakers pass an average of 45 new criminal laws each year and repeal few, if any.
Michiganders probably commit crimes every day and don’t know it when they do. Trupiano should feel fortunate that he received only a civil infraction. At a 2015 panel discussion on "overcriminalization" featuring speakers from the ACLU of Michigan and the Mackinac Center, ACLU attorney Miriam Auckerman said that her organization was representing Michiganders who had received misdemeanor sentences and even done jail time for their inadvertent crimes.
One ALCU client was arrested for trespassing after he chatted in a private parking lot for three minutes. Two college students from Saugatuck did jail time for playing their instruments on the sidewalk. They had violated an ordinance, which they were completely unaware of, prohibiting the playing of music in public spaces.
The ACLU and the Mackinac Center began calling on the Legislature in 2013 to establish standards that would protect well-meaning people from criminal liability. In 2015, Gov. Rick Snyder signed a law that protects people from being convicted for activities that they did not know were illegal.
While this is an important step forward, it still leaves Michiganders with a massive, complex scheme of state laws, local ordinances, and administrative and environmental regulations. As Trupiano experienced and his viral Facebook post indicates, these rules may be counterintuitive and inconsistently enforced.
Having so many laws on the books leaves people vulnerable to discretionary governmental prosecution. It erodes respect for the rule of law. It takes a lot of taxpayer dollars to arrest, try and punish people for minor violations, and it diverts law enforcement, court and corrections resources away from truly blameworthy offenses.
Two federal proposals that avoid dangerous overreach
Betsy DeVos has already been the subject of much media scrutiny as a result of her nomination to be the next U.S. secretary of education. But the most significant test will come on Jan. 11, when the U.S. Senate will hold its confirmation hearing.
Critics have repeatedly missed the mark about the record of Michigan charter schools that DeVos’ high-profile policy advocacy has helped to shape. Meanwhile, supporters of school choice have speculated about what she could and should do in a federal cabinet role to advance educational choice and opportunity.
The prospects are especially tempting for school choice advocates in her home state, where a restrictive state constitution has limited opportunities for many families. But federal school choice strategies should be carefully thought out. Reformers need to remember that the struggle for educational freedom is a long-term one and recognize the dangers of each strategy they pursue.
On the campaign trail, President-elect Trump touted a loosely defined $20 billion federal school choice initiative. While some relish the chance to shake up the system, a massive, D.C.-directed voucher program could create real and serious harms. A heavily regulated choice program would force many high-quality private schools to shift their focus to compliance, to compromise their mission or to not participate. That result would not help students at all; worse, it would threaten state programs that are already working well.
Two federal reforms, though, could be helpful. These ideas, recommended by The Heritage Foundation, would shift power from bureaucrats to parents and could open the door to more choices, all without harmful side effects.
First, eliminate the current complex formulas for doling out federal Title I dollars intended to help low-income students. Instead, give these families the option to use their per-pupil share outside the confines of the public school establishment. The amount would not be large enough to pay for tuition at a new school, but it could help families buy specific courses, tutoring services or instructional materials that their children need.
Second, let 529 college savings accounts cover K-12 expenses. All students could benefit by having more ways to develop their education before and during their college years. This could be accomplished by small changes in the law, first at the national and then at the state level.
Our state’s version of the 529, the Michigan Education Savings Program, helps taxpayers by letting them claim an income tax deduction for contributions they make to a personal education account (up to $5,000 for a person and $10,000 for a family). Businesses, charitable organizations and government agencies already can open accounts in a child’s name, which could be especially useful for kids from low-income families.
These two separate proposals, one using public funds and the other offering incentives for private contributions, would give Michigan families more control over their children’s education. And neither would carry the huge risk of a large-scale federally funded voucher program.
Bluegrass State first of several likely to pass such legislation in 2017
The Mackinac Center for Public Policy congratulates the commonwealth of Kentucky, which became the nation’s 27th right-to-work state over the weekend.
Kentucky Gov. Matt Bevin, a Republican, signed the legislation Saturday after it sailed through the legislature during the week. Once the law takes effect, unions will no longer be able to have workers in the Bluegrass State fired for not paying them dues.
In addition to enjoying more freedom, Kentuckians should expect an improved economy, higher wages and more jobs as a result of right-to-work. Jim Waters, president of the Bluegrass Institute for Public Policy Solutions, wrote an article for The Richmond Register about the positive effects right-to-work has had on states that recently enacted it. He cited the Mackinac Center’s Director of Labor Policy F. Vincent Vernuccio:
Vincent Vernuccio of the Michigan-based Mackinac Center for Public Policy found:
- Average wages in both Indiana and Michigan increased after right-to-work laws were passed.
- Since Indiana became a right-to-work state in 2012, its average wage rose faster than West Virginia’s.
- Between 2012 — when Michigan passed its right-to-work law — and mid-2015, incomes in Michigan rose more than 9 percent, which was faster than both West Virginia and the national average.
- Between 2012 and 2014, average hourly wages rose by 56 cents to $19.94 in Indiana, 56 cents to $21.70 in Michigan but only 37 cents to $18.21 in West Virginia.
Voters in new right-to-work states have rewarded lawmakers who supported the change, Vernuccio told The Wall Street Journal. “The union’s bark is a lot worse than its bite when it comes to the election afterward,” he said.
He noted that after Michigan enacted right-to-work in 2012, the issue wasn’t a significant factor in Republican Gov. Rick Snyder’s 2014 re-election, and no Republicans who voted for the bill lost in the general election that year.
Kentucky could be the first of several states to pass right-to-work legislation this year, Vernuccio told The Huffington Post. “We may see up to 29 [states] before the spring,” Vernuccio said. “You’re definitely seeing a snowball effect, and more and more states are looking to give workers freedom.”
Missouri and New Hampshire are the next states likely to consider such legislation.
Read the full article in The Richmond Register.
Read the full article in The Huffington Post.
A bigger budget means more money for programs beyond road repair
What if the Legislature and governor hike gas and vehicle registration taxes to fix the roads, but then hardly any extra money goes to fix the roads?
Drivers started paying those higher taxes this month, though they were enacted near the end of 2015. But at least in the short term, the main effect of these tax increases appears to be higher spending on schools and Medicaid, not road repairs.
The 7.3-cent-per-gallon tax increase motorists began paying on Jan. 1 and the 20 percent increase in the vehicle registration tax are expected to cost road users an additional $460 million this year. The money is dedicated to transportation funding — mostly to the roads, but also some for public transit.
Yet the state transportation budget will only have $160 million more this year for road repairs, not $460 million. That is because the Legislature shifted funds out of the transportation budget just as new tax revenues were coming into it.
Gov. Snyder has been pushing for more transportation funding since he took office in 2011. Many proposals were offered and rejected over the years, and the Legislature began shifting revenue from other taxes into the transportation budget.
By last year, the amount of state General Fund revenue transferred to transportation had risen to $402 million — nearly as much as the new road tax hikes will bring in this year.
With the new road tax money rolling in, all but $9.75 million worth of General Fund revenues were removed from this year’s transportation budget. The $392 million in General Fund money previously earmarked for roads is now mostly paying for Medicaid and public schools.
Specifically, the school aid budget is getting $163.8 million more in General Fund revenue this year, and the state agency that manages Medicaid is getting $132.6 million more.
The budgetary change is a lesson in fungibility: Increased tax revenue can be shifted from one purpose to another. Moving some General Fund revenue to transportation allowed more road repairs in the last couple years than would have been the case without that money.
Such details rarely wind up in the talking points politicians use to sell the public a tax increase. You won’t see any press releases promoting the gas tax as a way to fund medical welfare programs, just as you didn’t see many complaints about there not being enough school funding last year because general fund revenue shifted to roads.
The gas and vehicle registration taxes will continue to fund the transportation budget. And lawmakers plan to send some of the income tax money to roads in the future, so there will be more road funding.
Still, drivers got more road funding the last few years without having to pay for it in the form of higher transportation taxes. When those taxes did go up starting this month, Lansing’s response, at least in the short term, was to spend more on schools and Medicaid. Taxpayers should pay closer attention to the lesson about fungibility as they listen to future state spending debates.
The great economist is retiring
When I was growing up, my family wasn’t very engaged with politics and we spent little time discussing economic policy issues. If you would have asked me when I was a kid what “economics” was, I couldn’t have given much of an answer. But my parents were avid readers of newspapers — we got two daily papers, the Chicago Tribune and the Beacon News, as well as a weekly, the Sandwich Record, covering news from my hometown in Illinois.
The economist Thomas Sowell had occasional columns in these newspapers. He, and other syndicated writers I enjoyed, led me to discover a website of writings of dozens of columnists. Very quickly, Sowell stood out. I read every article of his that I could find, and eventually, a great many of his dozens of books. His writings helped form the foundation of my political philosophy and my career.
Sowell announced his retirement at the end of 2016. The 86-year-old Sowell grew up in a low-income household in Harlem. But in his autobiography, “A Man of Letters,” he explains that despite growing up in poverty, he was able to get a good education, to which he attributes his later success.
From Harlem, Sowell went to college where he became a Marxist. But later in life, during a job working for the federal government, his economic research led to a shift in his views and he eventually rejected Marxism and became one of the great free-market economists of this generation. He was especially gifted at communicating economic principles to noneconomists — like my teenage self.
I have compiled a collection of quotes from the great man over the years. From “The Vision of the Anointed”:
One of the never-ending crusades of the anointed is for more ‘public service.’ Like so many of the special buzzwords of the anointed, this phrase does not mean what the straightforward sense of the words seems to say. Not every service to the public is a ‘public service’ in this Newspeak. For example, those who deliver tons of life-sustaining food to supermarkets are not engaged in ‘public service,’ as the anointed use the term. Neither are those who build a roof over people’s heads or produce the clothes on people’s backs. Those who perform these vital services are activated by the incentives of the marketplace, perhaps even by ‘greed,’ another fashionable buzzword that puts the anointed and the benighted on different moral planes. . . . What is crucial is that public service not be service defined by the public itself through its choices of how to spend its own money in market transactions, but defined for them by third-party elites.
Also from “The Vision of the Anointed”:
One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.
From an interview with the Hoover Institute’s Peter Robinson:
I’ve often said there are three questions that will destroy most of the arguments of the left. The first is, ‘Compared to what?’ The second is, ‘At what cost?’ And the third is, ‘What hard evidence do you have?’
From “Dismantling America”:
No one will really understand politics until they understand that politicians are not trying to solve our problems. They are trying to solve their own problems — of which getting elected and re-elected are number one and number two. Whatever is number three is far behind.
My favorite quote of his, which hangs next to my desk and that I often use in speeches, is the following: “There are no solutions; only trade-offs.” Politicians would be wise to heed it.
A final thought from his last column:
In material things, there has been almost unbelievable progress. Most Americans did not have refrigerators back in 1930, when I was born. Television was little more than an experiment, and such things as air-conditioning or air travel were only for the very rich. My own family did not have electricity or hot running water, in my early childhood, which was not unusual for blacks in the South in those days. ... We cannot return to the past, even if we wanted to, but let us hope that we can learn something from the past to make for a better present and future.
So long, Dr. Sowell. Enjoy your well-deserved retirement. You influenced countless people, and you can count me among them.
2016 Michigan Energy Roundup
(This is the second article in a three part series discussing major changes made by the Michigan Legislature to energy utility regulation in the state. Those changes are now enrolled in statute as Public Acts 341 and 342 of 2016.)
Michigan’s two large utilities — DTE and Consumers Energy — have committed to prematurely close several of the state’s coal generation facilities. They are maintaining those plans in the face of Trump administration promises to ax anticoal regulations and despite the fact that the closures could lead to energy shortfalls across the state. Construction of replacement generation and the fight to protect Michigan’s small electricity program have been at the center of a major statewide debate on energy over the past two years.
Both utilities have claimed a need to build natural gas and renewable generation to address self-inflicted capacity shortages. Of course, sizable rate increases recently approved by the Michigan Public Service Commission also ensure Michigan’s two major utilities will generate handsome profits on any newly constructed generation.
Despite those guaranteed profits, DTE and Consumers Energy have voiced concerns that alternative energy suppliers — who provide less expensive electricity to Michigan’s electricity choice market — do not fund investments in the state’s regulated energy generation infrastructure. They argued that these suppliers might leave the state, or that they lack the capacity to supply the electricity needs of their customers, ultimately forcing them to rely on electricity generated by the big utilities.
DTE and Consumers Energy had, therefore, pushed legislators to add a “capacity charge” to the electricity sold by alternative energy suppliers to help fund DTE and Consumer’s investments in new generation capacity. However, choice program generators contend that their normal operations ensure sufficient capacity for customer demand and a capacity charge would effectively charge choice customers twice. That second charge would, of course, make alternative suppliers less competitive, effectively taxing the choice market for the benefit of the big utilities.
The back-and-forth over a capacity charge had been the primary reason that major changes to electric utility legislation had stalled in Michigan’s Legislature for almost two years. However, in the waning hours of the 2016 lame duck session, Gov. Rick Snyder demanded that legislators give him a completed bill. He pushed the Legislature to compromise on a bill that would both ensure sufficient funding for new generation capacity and protect Michigan’s electricity choice program.
The final language of Public Act 341 of 2016 mandates that alternative suppliers must either build sufficient generation capacity or have a minimum of three years of contracted capacity at all times. If they fall short on their advance planning, PA 341 empowers the MPSC to hold public hearings to determine an appropriate capacity charge to pay for access to generation assets operated by the major utilities. Where choice suppliers can guarantee sufficient generation capacity for their customers, no additional charges are necessary. DTE spokesperson John Austerberry agreed that the bill “provide(s) that reliability that we think is most important.”
State representative and strong electricity choice proponent, Gary Glenn, R-Midland, discussed the compromise bill on the floor of the House, saying that “as (he understood) the bills … there are significant improvements in energy policy that will benefit rate payers” and that will serve as “a good starting point from which hopefully we will expand choice in the future.“
Michigan Freedom Fund CEO, Terri Reid, commended the House for having defended free market principles by removing “every anti-choice poison pill” from the original Senate bill. “By forcing these changes,” Reid contended that, “House members put the needs of local schools, job makers, and their constituents above the profit sheets of two massive electric utilities. They stood up against millions in advertising and an army of lobbyists and they put ratepayers first.”
Aric Nesbitt, R-Lawton, chair of the House Energy Committee, and the primary sponsor of the legislation in the House characterized it as "a win, win, win — for our ratepayers, our economies and for our long term reliability in the state.”
Looking forward to 2017, one of the key issues to be addressed will be balancing the changing nature of Michigan’s electricity generation system. As utilities plan for the closure of large, dispatchable baseload coal and nuclear plants, Michigan’s system will be forced to rely on a smaller suite of energy options — specifically natural gas, renewables, and conservation measures.
Limiting options in this fashion is likely to prove problematic as the added expense and unreliable nature of renewables will be paired with continued volatility of natural gas prices in Michigan’s regulated energy markets. Therefore, expanding access to energy choice and free market energy options is likely to become an important hedge against supply and price swings in 2017 and beyond.
After big recent gains, this state stuck in neutral
The Fraser Institute just released its latest rankings of economic liberty in North America, covering U.S. and Mexican states as well as Canadian provinces. Michigan’s holds the same 27th place ranking among the 50 U.S. states as it did the last time Frasier produced the list — a troubling indication of stagnation after several years of gains.
The most free U.S. states in this index were New Hampshire, Florida, South Dakota, Texas and Tennessee. The least free were New York, California, Alaska, New Mexico and Hawaii, with New York and California bringing up the rear for the second year in a row.
Fraser scholars generally just report the rankings and let others draw conclusions, but with this release co-author Dean Stansel, an economics professor at Southern Methodist University, stated:
“Americans have been voting with their feet against the ‘big government’ approach of New York and California. Florida and Texas have experienced more than two-and-a half times faster population growth in recent years, and they’re among the freest states in the country.”
Studies show that economic liberty is highly correlated with many measurements of human well-being, starting with average incomes. Per capita incomes in the 10 states ranked most free were almost 5 percent above the national average, and incomes in the 10 least free states were more than 3 percent below average. During the past three years population grew about 3 percent in the 10 most free states, but only about 1 percent in the bottom 10 states.
There is practically zero chance these correlations are just coincidence. Economists and social scientists have studied what makes nations and their political subdivisions prosper. Economic liberty — the ability to freely produce and exchange goods and services for personal gain — is a vital ingredient for prosperity. How to best identify and measure it is a perennial challenge, and Fraser Institute scholars have made a major contribution by devising ways to do so at both national and subnational levels.
The Fraser index is built around three areas: spending by government, taxes and market freedom for labor, and these areas have a total of 10 subcategories. The methodology is explained in detail by the reports’ authors and the dataset is made publicly available.
Given Michigan’s current stagnation in the freedom rankings lawmakers here should look to the index for clues on where more work is needed. For example, eliminating the individual income tax would help Michigan transform into an economic freedom and opportunity powerhouse the likes of modern Florida and Texas.
Short of repeal, the people are still waiting for the substantial income tax cut promised by Lansing politicians back in 2007. That’s when a Democratic Governor and House along with a Republican Senate imposed a “temporary” 11.5 percent income tax increase, to be rolled back starting in 2011. Since then, they have delivered a down payment of just 0.1 percentage point on that promise.
The Fraser Institute’s Economic Freedom of North America report is a scholarly measure of where Michigan fits in North America’s economic firmament. State and national economies are not static — some places are always moving up and others falling behind. You’ll know Michigan is moving the right direction when our Legislature and Governor adopt policies that advance the state above its current 27th place on the EFNA index.
Web resource makes it harder for politicians to talk-the-talk back home but not walk-the-walk in Lansing
With the close of the 2015-16 Michigan Legislature, MichiganVotes.org completes its 16th year of describing all the bills and all the votes cast by every state lawmaker. Over this period the site has provided concise, plain-English descriptions of 30,852 bills, 26,517 roll call votes, 20,562 amendments 5,804[*] new laws, and 69,178 votes that individual legislators missed.
The site allows users to search and sort these proposals in useful ways. For example, a person can look up his or her representative’s votes on all bills in the “tax” category that contain the word “increase,” or all “education” bills with the words “charter school.”
Thanks to MichiganVotes.org, every Michigan lawmaker who has served during the past 16 years now has an easily uncovered “permanent record” of their actions. This has made it much more difficult for politicians to say one thing back in the district, cast contrary votes in Lansing, and get away with it because nobody told the folks back home.
The value of the site’s database grows with each additional year. With term limits, the information warehouse contains the complete legislative careers of hundreds of legislators who have served their allotted time. Many of these politicians have and will move on to other positions in government, but wherever they go, their legislative record will follow them on MichiganVotes.org.
The site also allows users to create custom voting record “scorecard” spreadsheets, rating all 148 lawmakers on whatever issue or ideological standard they choose. (Here’s a recent example created by the MIRS news site, and here’s an older one created by a tea party group.)
Finally, a “Weekly Roll Call Vote Report” tells newspapers how their local lawmakers voted on just the most interesting, important or newsworthy bills of the previous week.
(Note: Portions of this post have been published in previous articles on this site.)
[*]This is not the final count through 2016.
We are the authors of a new study of state-funded tourism promotion programs that found them to be largely a waste of taxpayer money. The findings were so stark that we felt compelled to bring them to the attention of our fellow citizens and Michigan taxpayers, who will pay $34 million for this state’s promotion campaign.
Specifically, we found that every $1 million increase in state tourism promotion spending generates just $20,000 in additional lodging industry business (not new tax revenue). Other sectors of the economy get back far less. In other words, spending on this state’s Pure Michigan ad campaign is a huge loss for taxpayers. This finding is also intuitively obvious, since Michigan’s tourism businesses have chosen not to make this marketing investment themselves — with their own money.
That is why in November, we challenged officials from the Michigan Economic Development Corporation — which gets annual appropriations to run Pure Michigan ads — and the Michigan Lodging and Tourism Association — which is supposed to benefit from the program — to a public debate.
They declined, which is no surprise because their claims that the program is worthwhile are based on studies purchased under no-bid contracts that use a “dark methodology” to generate incredible “return on investment” from this spending. Even though these taxpayer-funded studies are meant to inform public policy decisions, MEDC officials keep this methodology a secret.
We written before about this problematic scheme. A cottage industry of specialty consultants creates research products that purport to show that tourism ad spending more than pays for itself. The products mimic independent scholarly research, but are neither independent nor scholarly.
The vendor is not independent because the firm is paid by the agency seeking to justify this spending, almost always under single-source, no-bid contracts.
The research products violate the core canons of valid scientific research — transparency and replicability. Independent scholars are unable to “check the work” of the MEDC’s consultants because their methods are kept secret.
In other words, policymakers and the public are supposed to just take the word of officials and companies that directly benefit from state tourism ad spending that the spending is worthwhile. Trust, but don’t verify.
That would be a mistake, because claims that the state treasury gets back $7.67 for every $1 dollar spent on Pure Michigan ads are a scam. The figure was created by a vendor called Longwoods International, the recipient of multiple no-bid contracts from the MEDC, and whose current chair is a former MEDC official. When challenged on all this, the agency and its vendors respond with bold defiance.
In a news story about our debate challenge, reporter Justin Hinkley paraphrases the president of Longwoods as follows: “Mackinac Center’s analysis fails to account for other factors — the economy, bad weather, etc. — that can influence travel. The Longwoods study control for those factors to measure the effectiveness of the campaign.”
Siegel either doesn’t understand our model well enough to properly critique our effort or doesn’t care.[*] If he does understand econometric research methods then his response is at best disingenuous.
Moreover, until Siegel is willing to reveal Longwood’s own precise methodology he should recuse himself from commenting on the work of independent scholars who follow the canons of valid econometric research.
The contrast is almost amusing: The reason Siegel knows about our study’s methods is because we were 100 percent transparent about their underlying logic, construction and data sources. In contrast, the only reason the world knows that Longwoods did try to factor weather and state economic growth into its calculations is because Siegel revealed this in the media stories about our debate challenge!
The text of the Longwoods research product that generated the extraordinary “return on investment” figures revealed only that “we control for the effects of internal and external factors that could otherwise influence the result.”
In other words, they revealed nothing.
Our new study demonstrates how valid research should be done: It was published only after a thorough review of existing scholarly research on the issue; its statistical methods are both transparent and robust; and its data sources are publicly available and the results were peer-reviewed by other economists. Any competent and legitimate scholar can replicate the work. These are the hallmarks of valid scholarship.
MEDC officials have strong incentives to pretend that the Longwood’s products and claims are valid and to ignore or besmirch our research. Lawmakers are being bamboozled by this agency into wasting tens of millions of state taxpayer dollars every year on a worthless program.
Policymakers should not accept this, and taxpayers should insist on it.
[*] No key variables were excluded from the Mackinac Center study. It employed a “fixed effects” model and examined annual state-level data covering a 39-year period. Such models are explicitly designed to minimize or eliminate the risk of excluding vital variables. The study includes trend variables for weather and other factors, and controls for effects that are particular to states over time: annual rainfall, forest coverage, and miles of waterfront and average variations in temperature. Our model also controls for such things as economic differences between states and over time, including recessions.
(This article is the first in a three-part series discussing major changes made by the Michigan Legislature to energy regulation in the state. Those changes are now enrolled in statute as Public Acts 341 and 342 of 2016.)
After a marathon two-day, lame-duck session, the Michigan Legislature completed and enacted new electric utility legislation that has been the focus of debate for the past two years. Ironically, the original purpose of the proposed legislation — to accommodate sweeping new federal regulations ordered by the Obama administration — appears obsolete after Donald Trump won the presidential election on Nov. 8.
But pressure from the state’s major utilities, and two years of lobbying, helped push the Legislature to move ahead anyway, even though the President-elect has promised to rescind the Obama administration’s energy regulations as one of his first acts in office.
The final wording of the new law appears to protect Michigan’s small electricity choice program — a win for electricity choice customers. However, the measure also continues a problematic “net metering program” that does help diversify electricity sources across the state, but does so by subsidizing household solar installations. The legislation also expanded a mandate that now requires utilities to get 15 percent of their power from renewable sources (up from 10 percent).
Throughout the debate, utilities focused on the need for system stability that was endangered by proposed Obama administration regulations. Heavy-handed federal regulation and tight market conditions made closure of several DTE and Consumer’s Energy coal generation plants seem unavoidable and these utilities warned that Michigan faced potential energy shortages.
The big commercial utilities responded by promoting plans to build new natural gas and renewable generation facilities (for which they receive a guaranteed profit). They also continued to advance conservation programs within their operating territories — for which the utilities benefit through a variety of state and federal programs.
However, while they warned about threats to system reliability, the big utilities simultaneously undercut that message by promising to “keep building renewables and … retire our coal fleet,” regardless of what happened in the regulatory realm. But replacing low-cost, reliable, easily dispatchable generation capacity like coal with unreliable, nondispatchable, and subsidy-dependent capacity like renewables actually diminishes energy system stability.
As debate on the new Michigan law entered its final phase, I advised using a wait and see approach — there was nothing to be gained from rushing through legislation devised to respond to the Obama administration’s regulatory plans. The legislation's proposed changes may become unnecessary and obsolete under a Trump administration. Plans to close coal generation plants in Michigan leave the state vulnerable to any future electricity shortages or price spikes; completely avoidable and self-inflicted wounds.
However, on the evening before the close of the lame-duck session, Governor Rick Snyder mounted a last-minute push, demanding the new law be passed. The Governor’s involvement forced a compromise between the state’s two major utilities and alternative energy suppliers, addressing concerns that Michigan’s small energy choice program was in danger of being killed off. That agreement was sufficient to reassure House Republicans and, the following afternoon, the main bill in the proposal passed easily in a 79-28 vote. The Senate followed up, approving the updated bills in a 33-4 vote. Gov. Snyder signed the bill — now Public Act 341 of 2016 — on December 21.