Utilities challenge need and wisdom of state renewable energy ballot initiatives
Activists are trying to increase renewable energy mandates through ballot initiatives in three states this year.
Utilities in Michigan, Arizona and Nevada, however, already have undertaken extensive renewable energy programs. And, while renewable portfolio standards may have helped fertilize the seeds of an emerging industry a decade ago, some leaders do not believe these types of political campaigns, driven by out-of-state interests, are necessary today, or that it is particularly wise to engage in what would ordinarily be complex energy policy and planning at the ballot box.
The ballot initiatives in the three states are supported by California billionaire Tom Steyer and his political action committee NextGen America. Steyer has been a critic of the Trump administration and his committee’s efforts have included fighting climate change.
Under a 2016 Michigan law, renewable energy, such as wind and solar, hydro and biomass, must represent 15 percent of a utility’s generation mix in 2021. The ballot initiative would require electric utilities to increase during the next decade the amount of renewable energy they acquire, from 12.5 percent in 2019 and 2020 to 30 percent in 2030.
Supporters of the Michigan initiative need 252,523 signatures on their petition by May 30 to proceed.
Under Michigan’s initiative process, if a petition receives the required number of signatures, the legislature has 40 days to act on the proposal. If the legislature rejects or fails to act, the proposal is then placed on the next general election ballot, which this year is Nov. 6.
Michigan voters crushed a proposed constitutional amendment in 2012 that would have required 25 percent renewables by 2025. The measure was defeated in a 62 percent to 38 percent vote.
DTE Energy was among the opponents of the 2012 proposal. Gerry Anderson, chairman and chief executive officer of the company, said he doesn’t favor this 2018 measure either.
“We should not set energy policy through advertising campaigns and ballot initiatives,” Anderson said in an interview with the Daily Energy Insider. “The right way is through Michigan policy leaders and legislators.”
Ballot initiatives to set energy policy should only be a last resort if, for example, lawmakers refuse to act, he added.
Anderson said he has been in discussions with supporters of the ballot initiative to see if there is a more constructive way to proceed rather than allowing the issue to degenerate into a partisan debate absorbing millions of dollars in advertising budgets. “I’m actually hopeful that it will resolve itself,” he said.
DTE, which serves 2.2 million electric customers in Southeastern Michigan, already has a major initiative underway that will double the company’s renewable resources over the next several years and, ultimately, reduce the company’s carbon emissions 80 percent by 2050. “The plan we laid out a year ago is in motion,” Anderson said.
Arizona activists seek a constitutional amendment that would require 50 percent renewables by 2030.
Supporters need 225,963 signatures on the petition by July 5 to have the measure placed before the voters in the general election.
The Republican-controlled Arizona Senate has advanced a competing proposal with the same terms but would allow the state’s utility regulators, the Arizona Corporation Commission, to override the mandate if it would increase rates or jeopardize electric system reliability.
“I believe that the 50 percent mandate by 2030 is irresponsible and dangerous,” said Sen.
John Kavanagh (R-Fountain Hills), sponsor of the Senate proposal. He describes his proposal as a “safety valve” for consumers.
The proposed amendment would create a massive demand for renewables, causing prices to skyrocket, he said. Kavanagh also believes that such a saturation of intermittent energy, which ebbs and flows with the sun and wind, would cause instability in the grid.
“Utilities don’t have a dog in the race,” Kavanagh added. They would be allowed to recover their costs.
Customers won’t remember the California group that came into the state and waged the political campaign, he said. They will only see high bills from their utilities afterward. “It’s going to drive prices through the roof and they’ll be blamed for it.”
Amid the political campaign, the Arizona Corporation Commission is developing a sweeping energy plan that would cover the wide range of resources including energy storage and nuclear power.
Kavanagh, nevertheless, believes that if the issue makes it to the November ballot, voters will favor the Senate proposal. “I think they’re going to go with the safety valve.”
Nevada activists also are pushing for a constitutional amendment that would require 50 percent renewable energy by 2030.
To get their proposal on the November ballot, supporters need to obtain 112,543 signatures by June 19, spread evenly among the state’s four congressional districts. The proposal then would need to be approved by the voters in two general elections.
Jennifer Schuricht, corporate communications manager for NV Energy, which serves the more-populated areas of the state, including Las Vegas and Reno, said the utility already is a leader in renewable energy, ranking second in the nation in geothermal and fourth in solar.
“NV Energy has exceeded our state’s renewable portfolio standard for the eighth straight year and is on track, working with our partners in the environmental community and other key customers and stakeholders, to double our renewable energy capacity by 2023,” she said in an email. “The company’s ultimate goal is to supply our customers with 100 percent renewable energy, while not impacting the price they pay for our services.”
If the renewables proposal makes it to the November ballot, Nevada voters will face two significant energy-related questions.
There already is a question on the ballot – commonly referred to as Question 3 – asking if the state legislature should deregulate Nevada’s energy industry and create an open and competitive energy market. This measure, which embodies customer choice, already has been overwhelmingly approved by the voters once in 2016.
NV Energy, part of Berkshire Hathaway Energy, recently has announced its opposition to the dereglation plan.
“Nevadans should be concerned, however, about Question 3, a deeply flawed Constitutional Amendment on the ballot this November,” Schuricht said. “If passed, Question 3 would dismantle the state’s power system in both urban and rural areas, and halt the progress being made with renewables.”
