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Henry Henderson’s Blog

Down on Upton: Michigan Energy News Undercuts Rep's Rap

Henry Henderson

Posted January 7, 2011 in Health and the Environment, Solving Global Warming

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I have been struck by the flap over Rep. Fred Upton’s seemingly new take on utilities and climate change. Congressman Upton, a Michigan Republican who is taking over the House energy and commerce committee, is an important figure in the ongoing fight to address climate, so his shift away from clean energy commitments, and apparent embrace of climate change denial, is notable. It is also kind of odd, when you look at what is going on in Michigan.

In a recent Wall Street Journal Op Ed, Upton wrote that a national climate bill would be "an unconstitutional power grab that will kill millions of jobs." 

On Fox News he framed his opposition to climate and EPA environmental regulations in these terms:

“Before the end of the next decade, our country is going to need 30 to 40 more percent more electricity that we use today.”

This is simply bizarre given what is actually happening to the American clean energy economy. The Congressman really needs to get back to his home district, because there has been a powerful stream of heartening energy news coming out of the Wolverine State in the New Year. And it significantly contradicts his position. The facts in Michigan are: energy efficiency is making huge impacts on lowering electricity demand; renewables are generating a growing percentage of the state’s electricity; and these state programs are creating jobs, which Michiganders desperately need.

Energy Efficiency

In 2008, the Michigan Legislature passed a law requiring utilities to help consumers reduce energy use---things like offering incentives to weatherize homes, change to CFL bulbs or upgrade to more efficient refrigerators and furnaces, which used to be incredible energy hogs. Now, the state is looking back to evaluate the impact. According to the Michigan Public Service Commission, the program has gone gangbusters. Their report shows that efficiency efforts are actually beating expectations, with investor-owned utilities exceeding savings targets by 137%. What does that mean? Well, look at the experience in Lewanee County, where conservation projects in two government buildings alone saved taxpayers nearly $250,000 in gas and electric bills last year.

“We know that the cheapest energy is the energy that is never used,” Michigan Public Service Commission Chairman Orjiakor Isiogu told the Michigan Messenger. “So, it’s good to see that Michigan’s electric and natural gas utilities significantly ramped up their energy optimization programs in 2009, saving their customers money. In addition, utilities are responding to customer demand for improvements by expanding their programs.”

Considering that, not long ago, Michigan led the nation with eight new proposed coal plants, this should be big news. The focus on more efficient use of the energy already being generated in the state underscored the point that an NRDC evaluation of the state’s energy demands also showed---the plants were not needed. By using energy smarter, the state has literally offset tens of thousands of tons of dangerous pollutants such as sulfur dioxide, particulate matter, and mercury, and millions of tons of climate changing CO2---not to mention wasting tens of billions of dollars---by not building the unnecessary facilities.

Renewable Energy

And while those coal plants are now off the books, an increasing amount of Michigan energy is being produced using cleaner sources. The regulators also recently announced that the state is on track to meet a goal of generating 10% of its energy from renewables. Right now, they are at about 4%, up from under 3% in 2007. And a close look at the state’s needs conducted with NRDC and outside consultants shows that there is plenty of opportunity for more good news in this regard. The state’s future electricity demand can be completely addressed by wind, combined heat and power, biomass, and other renewables coupled with additional aggressive energy efficiency programs---likely saving Michiganders $3 billion in energy costs in the process.

Those energy efficiency projects mean jobs. Jobs weatherizing houses. Jobs installing components to update the grid. Jobs selling energy-efficient appliances. Jobs on the assembly lines manufacturing components for these new technologies. Renewables and a clean energy economy mean the same thing in Michigan, which has benefitted from significant stimulus dollars for R&D on battery technologies. Jobs Jobs Jobs!

Honestly, I don’t think there are questions about the science of climate change. But let’s not conflate issues here---this is about protecting our public health and improving the economy in some of the places hardest hit by the economic downturn. Michigan currently ranks fifth in the nation for premature deaths caused by pollutants associated with coal plants. Whether you agree with the climate science or not, everyone can agree that eliminating the massive toll taken by air and water pollution that comes along with coal plants---as well as eliminating waste from our energy system---is unambiguously good. Hopefully, Representative Upton will look at what is actually happening in his state and see that clean energy investments are creating jobs, renewing the economy, helping his constituents, meeting the needs of America for a healthy economy in the 21st Century; all, while helping solve the problem of climate change.

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Comments

JeffMJan 8 2011 10:23 PM

This article is a nice pep talk. Unfortunately, it’s full of contradictions.

It says that, on Fox News, Rep. Upton said that the U.S. will need 30% to 40% more electricity than is currently produced (this seems like an eminently reasonable statement). Was Michigan not part of this estimate? The article then goes on to tell us that Michigan proposed building eight new coal plants, and that the NRDC says these plants are not needed. Does this mean that Michigan’s economic outlook is that bad… that stagnant and shrinking? If economic growth and expansion is desirable, why won’t more electric generating plants be needed? New power plants, built with newer, cleaner technology are certainly desirable, if only to allow decommissioning of the old, dirty power plants. Newer, cleaner power plants are desirable. Workers will have jobs building them.

The article quotes the PSC Chairman as saying that the cheapest energy is that which is never used. This is a tongue-in-cheek way of saying that, as conservation efforts become more widespread, consumers will pay less for the effort in the short term, but that their electricity costs will quickly climb. It is certain that power companies must bear essentially the same costs of running at 70% capacity as at 90+% capacity. The reduced consumption of electricity must still pay for the 90+% of capacity costs, if only to back up the part time alternative energy sources. Rate increases are a cruel certainty for consumers who thought energy efficiency would save them money.

The article says that future energy demand can be completely met by using wind, solar, etc. and save Michiganders $3 billion. What wasn’t mentioned is that this depends on continued Federal subsidies for these technologies, without which energy costs will “skyrocket” (to quote Barak Obama’s campaign speech). The Federal government cannot afford to continue these subsidies. A realistic outlook would predict higher energy prices, not lower in the future. At present, the $3 billion “saved” is currently being paid from the Federal budget deficit (borrowed from China).

The matter of creating jobs is also contradictory. The cost of each job “created” is, in reality, an additional cost of living for consumers to bear. Future electricity demands satisfied by building new coal-fired plants, versus building windmill farms and solar arrays, are probably a wash (even if we ignore the fact that one energy source is full time and the other is part time) as are the jobs for either scenario. Do consumers really want to pay to have their homes and businesses weatherized? Yes, but only until they realize that energy costs have gone up before they’ve paid off their weatherization loans.

As was pointed out, Michigan was hard hit by the economic downturn. Do consumers have the pocket money to pay for all of these additional costs?

Adding insult to injury, nowhere has anyone ever told the consumer what potential global temperature reduction would be realized from all of this.

Joel BaetensJan 14 2011 10:44 AM

Dear Jeff,

Note that energy efficiency upgrades are what is driving down the demand for added capacity in the state - not a dooming economic forecast. Because we use what we have more effectively - we are reducing the need to make more electricity by adding plants. If jobs are all you need - why do you care wether people are building coal plants or solar plants?

Efficiency upgrades on the end users will reduce total demand but increases in population and economy will increase this same demand. What the article is saying is that instead of a normal increase in demand(building new plants) the are able to keep the same amount of plants because the users are buying the same amount of energy but getting more use out of it. The article did not say that any plants were shut down because of lowered demand - or did it?

cost of renewables - You should note that the first car to roll off an assemble line costs millions of dollars. Until many cars roll off - the car plant is operating in negative cash-flow. The same is true for a manufacturer of Wind , solar, even heat-pumps. A stimulus is just that - to stimulate a process that will sustain its own growth in the future. Of course the rebates will end - when the manufacturing costs are lowered and the demand on energy increases - the gov't will not have to provide incentives for renewable - even you may purchase them because of lower lifecycle costs.

Be careful about bringing China into this. That is a different debate that I would love to campaign WITH you. I check every tag before making a purchase - believe that!

Rising energy costs will only shorten payback periods of energy efficient upgrades - it is simple math. (Simple Payback in years) = (Initial costs) / (savings per year)

Global climate CHANGE is debate even amongst scholars of the subject. Temps rise in areas fall in others. It would be insulting if an actual number was given. It is possible however to convert a reduction in energy use directly to a reduction in emissions. Also by switching to renewables a reductions in emissions can and is calculated.

Regards

Joel

PS - dont believe me - look up what I write for accuracy!!

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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