June 21, 2017, Introduced by Senators WARREN, HOPGOOD, CONYERS and GREGORY and referred to the Committee on Energy and Technology.
A bill to amend 2008 PA 295, entitled
"Clean and renewable energy and energy waste reduction act,"
by amending sections 22, 28, and 45 (MCL 460.1022, 460.1028, and
460.1045), sections 22 and 28 as added and section 45 as amended by
2016 PA 342, and by adding section 32.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 22. (1) Renewable energy plans and associated revenue
recovery mechanisms filed by an electric provider, approved under
former section 21 or 23 or found to comply with this act under
former
section 25 and in effect on the effective date of the 2016
amendatory
act that added this section, April
20, 2017, remain in
effect, subject to amendments as provided for under subsections (3)
and (4).
(2) For an electric provider whose rates are regulated by the
commission, amended renewable energy plans 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.
(3)
Within 1 year after the effective date of the 2016
amendatory
act that added this section, By
April 20, 2018, the
commission shall review each electric provider's plan pursuant to a
filing schedule established by the commission. For an electric
provider whose rates are regulated by the commission, 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. After the hearing, the commission shall
approve, with any changes consented to by the electric provider, or
reject the plan and any amendments to the plan. For all other
electric providers, 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. For alternative electric suppliers, the commission shall
approve, with any changes consented to by the electric provider, or
reject any proposed amendments to the plan. For cooperative
electric utilities and municipally owned utilities, the proposed
amendment is adopted if the commission determines that it complies
with this act.
(4) The review process under subsection (3) shall include a
plan amendment to comply with the increased renewable energy credit
standards established by 2016 PA 342 and, except as provided in
this subsection, with the amendatory act that added this
subsection. If the review process commenced before the effective
date of the amendatory act that added this subsection and did not
account for the increased renewable energy credit standards
established by that amendatory act, the commission shall
subsequently review the plan under subsection (3) within 1 year
after the effective date of that amendatory act, and that review
process shall include a plan amendment to comply with the increased
renewable energy credit standards established by that amendatory
act.
(5) (4)
If an electric provider proposes to
amend its plan
after
the review process under subsection (3), subsections (3) and
(4), the electric provider shall file the proposed amendment with
the commission. For an electric provider whose rates are regulated
by 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. 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. For all other electric
providers, 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. For alternative electric suppliers,
the commission shall approve, with any changes consented to by the
electric provider, or reject any proposed amendments to the plan.
For cooperative electric utilities and municipally owned utilities,
the proposed amendment is adopted if the commission determines that
it complies with this act.
(6) (5)
For an electric provider whose
rates are regulated by
the commission, the commission shall approve the plan or amendments
to the plan if the commission determines:
(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 in prior plans
were exceeded.
(b) That the plan is consistent with the purpose and goal set
forth in section 1(2) and (3) and meets the renewable energy credit
standard
through 2021.2035.
(7) (6)
If the commission rejects a
proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
Sec. 28. (1) An electric provider shall achieve a renewable
energy credit portfolio as follows:
(a) In 2016 through 2018, a renewable energy credit portfolio
that consists of at least the same number of renewable energy
credits as were required under former section 27.
(b) In 2019 and 2020, a renewable energy credit portfolio of
at
least 12.5%. , as calculated under subsection (2).
(c) In 2021 and each year thereafter through 2034, a renewable
energy
credit portfolio of at least 15%.
, as calculated under
subsection
(2).
(d) In 2035 and each year thereafter, a renewable energy
credit portfolio of at least 50%.
(2) An electric provider's renewable energy credit portfolio
under subsection (1)(b) to (d) 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.
(3) Subject to subsection (5), 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.
(4) For an electric provider whose rates are regulated by the
commission, the electric provider shall submit a contract entered
into for the purposes of subsection (3) to the commission for
review and approval. If the commission approves the contract, it
shall be considered consistent with the electric provider's
renewable energy plan. The commission shall not approve a contract
based on an unsolicited proposal unless the commission determines
that the unsolicited proposal provides opportunities that may not
otherwise be available or commercially practical through a
competitive bid process.
(5) An electric provider may substitute energy waste reduction
credits for renewable energy credits otherwise required to meet the
renewable energy credit standards if the substitution is approved
by the commission. Under this subsection, energy waste reduction
credits shall not be used by a provider to meet more than 10% of
the renewable energy credit standard. One renewable energy credit
shall be awarded per 1 energy waste reduction credit.
Sec. 32. (1) Upon petition by an electric provider, the
commission may for good cause grant 2 extensions of the 2035
renewable energy standard deadline under section 27. Each extension
shall be for up to 1 year.
(2) If 2 extensions of the 2035 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 extension, 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 2035.
(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 subject to
section 47(6), 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,
or land use issues; permits, including environmental permits; any
certificate of 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) 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.
Sec. 45. (1) For an electric provider whose rates are
regulated by the commission, the commission shall determine the
appropriate charges for the electric provider's tariffs that permit
recovery
of the incremental cost of compliance costs authorized for
recovery under section 47 subject to the retail rate impact limits
set forth in subsection (2).
(2)
An electric provider shall recover the incremental cost of
compliance
with the renewable energy standards. An
electric
provider shall not comply with the renewable energy standards to
the extent that, as determined by the commission, recovery of the
incremental
cost of compliance costs
authorized for recovery under
section 47 will have a retail rate impact that exceeds any of the
following:
(a) $3.00 per month per residential customer meter.
(b) $16.58 per month per commercial secondary customer meter.
(c) $187.50 per month per commercial primary or industrial
customer meter.
(3) The retail rate impact limits of subsection (2) apply only
to
the incremental costs of compliance costs authorized for
recovery under section 47 and do not apply to costs approved for
recovery by the commission other than as provided in this act.
(4) The incremental cost of compliance shall be calculated for
a 20-year period beginning with approval of the renewable energy
plan and shall be recovered on a levelized basis.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.