December 6, 2007, Introduced by Reps. Mayes, Palsrok, Accavitti and Nofs and referred to the Committee on Energy and Technology.
A bill to require certain providers of electric service to
establish a renewable energy program and to achieve sustainable
energy goals using renewable energy and energy efficiency programs;
to prescribe the powers and duties of certain state agencies and
officials; and to provide for sanctions.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act:
(a) "Biomass" means any organic matter that can be converted
to usable fuel for the production of energy and is available on a
renewable basis, including, but not limited to, all of the
following:
(i) Agricultural crops and crop wastes.
(ii) Wood and wood wastes, including wood and wood waste from
wood product and paper processing.
(iii) Animal wastes.
(iv) Municipal wastewater sludge.
(v) Aquatic plants.
(vi) Food production and processing waste.
(vii) Municipal solid waste.
(b) "Commission" means the Michigan public service commission.
(c) "Electric utility" means a person, partnership,
corporation, association, or other legal entity whose transmission
or distribution of electricity the commission regulates under 1909
PA 106, MCL 460.551 to 460.559, or 1939 PA 3, MCL 460.1 to
460.10cc.
(d) "Installed capacity" means the total amount of electricity
a renewable energy system can generate in 1 hour at full load.
(e) "Portfolio standard" is the minimum percentage of a
provider's total annual retail kilowatt hour electricity sales in
this state that is required to be produced from a renewable energy
resource.
(f) "Provider" means any person that is in the business of
selling electricity to retail customers in this state and includes
all of the following:
(i) Any person or entity that is regulated by the commission
for the purpose of selling electricity to retail customers.
(ii) A municipal electric provider.
(iii) A cooperative electric provider.
(iv) An alternative electric supplier.
(v) An independent investor-owned electric utility.
(g) "Renewable energy" means electricity produced using a
renewable energy resource.
(h) "Renewable energy contract" means a contract to acquire
renewable energy and the associated renewable energy credits from 1
or more renewable energy systems.
(i) "Renewable energy credit" means a certified credit under
this act equal to 1 megawatt hour of generated renewable energy.
(j) "Renewable energy resource" means any of the following:
(i) Biomass.
(ii) Geothermal.
(iii) Solar thermal.
(iv) Photovoltaic cells and panels.
(v) Industrial cogeneration where an integrated unit generates
power and either cools, heats, or controls humidity in a building
or provides heating, drying, or chilling for an industrial process
not including electricity generation.
(vi) An incinerator brought into service before the effective
date of this act that complies with all federal and state
environmental regulations.
(vii) Wind.
(viii) Hydroelectric from existing hydroelectric facilities or
new hydroelectric facilities using existing dams unless those dams
are modified after the effective date of this act to increase their
holding capacity or further restrict water flow or in a manner that
does not fully incorporate best environmental practices.
(ix) Hydroelectric from pumped storage hydroelectric facilities
to the extent the water was pumped using energy generated from
renewable energy resources.
(x) Landfill gas.
(k) "Renewable energy resource" does not include the burning
or heating of tires, garbage, landscape waste, construction or
demolition debris, or general household, institutional, commercial,
office, or industrial lunchroom waste.
(l) "Renewable energy system" means a facility, electricity
generation system, or integrated set of electricity generation
systems that use renewable energy resources located in this state,
Illinois, Indiana, Minnesota, Ohio, Wisconsin, or the province of
Ontario or of Manitoba, Canada.
(m) "Terms and conditions" includes the price that a provider
of electric service is to pay to acquire electricity and the
associated renewable energy credits under a renewable energy
contract along with other contract provisions.
Sec. 3. By December 31, 2015, each provider shall achieve a
sustainable energy portfolio. The sustainable energy portfolio
shall be calculated by adding the following:
(a) The sum of the biennial and annual incremental energy
savings achieved under section 7 of the energy efficient Michigan
act, or the equivalent savings attributable to a provider that
makes payments under section 11 of the energy efficient Michigan
act.
(b) The portfolio for renewable energy achieved by the
provider under this act.
Sec. 5. (1) Subject to section 11, by December 31, 2015, each
provider shall meet a portfolio standard for renewable energy. The
portfolio standard is 10% of the total amount of kilowatt hours of
electricity sold by the provider to its retail customers in this
state during the calendar year.
(2) A provider shall comply with the renewable energy
portfolio standard required in this section by obtaining renewable
energy credits by any of the following means:
(a) Producing electric energy from renewable energy systems.
(b) Purchasing electric energy through a renewable energy
contract.
(c) Obtaining renewable energy credits from a renewable energy
system located in this state.
(3) If the provider enters a renewable energy contract after
the effective date of this act, the commission shall determine
whether the contract provides reasonable terms and conditions,
including, but not limited to, the length of that contract.
(4) The commission shall consider all actual costs reasonably
and prudently incurred by a regulated utility in meeting the
requirements of this act to be a cost of service. The commission
shall determine the mechanism for the recovery of those costs.
However, costs incurred obtaining renewable energy credits under
section 11(3) are not a recoverable cost of service.
Sec. 7. (1) The commission shall establish a system of
renewable energy credits that shall be used by a provider to comply
with its portfolio standard. The renewable energy credit program
shall comply with all of the following:
(a) A process to certify all existing renewable energy systems
operating on the effective date of this act as eligible to receive
renewable energy credits.
(b) A method for the transferability of credits.
(c) For power purchase agreements that exist on the effective
date of this act, the generator of the renewable energy shall be
considered to own any renewable energy credits unless the ownership
of the renewable energy credits is otherwise provided by contract.
(d) A renewable energy credit purchased from a source in this
state shall not be required to be used in this state.
(2) One renewable energy credit shall be granted for each
megawatt hour of electricity from a renewable energy resource. If
both a renewable energy resource and a nonrenewable energy resource
are used to generate electric energy, the commission shall grant
the renewable energy credits based on the proportion of the
renewable energy resource used. For purposes of complying with a
renewable portfolio standard, the following additional renewable
energy credits shall be counted under the following circumstances:
(a) 1-1/2 renewable energy credits for each megawatt hour of
electricity from solar power.
(b) 1/10 renewable energy credit for each megawatt hour of
electricity generated in this state from a renewable energy
resource in this state.
(c) 1/10 renewable energy credit for each megawatt hour of
electricity generated from a renewable energy resource, using
equipment made in this state as determined by the commission.
(d) 1/20 renewable energy credit for each megawatt hour of
electricity generated from a renewable energy resource, other than
wind, at peak demand time. The commission shall determine what
constitutes peak demand time.
(3) The commission shall establish a renewable energy credit
certification and tracking program. The certification and tracking
program may be contracted to and performed by a third party through
a system of competitive bidding. The renewable energy credit
certification and tracking program shall include all of the
following:
(a) Certification that the renewable energy system is a
qualified renewable energy system under this act.
(b) Certification that the operator of a renewable energy
system is in compliance with state and federal law applicable to
the operation of a renewable energy system at the time
certification is granted.
(c) Determining the date that the renewable energy credit is
valid for transfer under this act.
(d) A method for ensuring that renewable energy credits traded
and sold under this act are properly accounted under this act.
Sec. 13. (1) The commission shall not require a municipally
owned utility to purchase renewable energy credits under this act.
(2) Any person adversely affected may commence a civil action
for injunctive relief against a municipally owned utility that
fails to meet the requirements of this act. The action shall be
commenced in the circuit court for the circuit in which the alleged
violation occurred. An action shall not be filed under this
subsection unless the plaintiff has given the proposed defendant
and the commission at least 60 days' written notice of the
plaintiff's intent to sue, the basis for the suit, and the relief
sought. In issuing a final order in an action brought under this
subsection, the court may award costs of litigation, including
reasonable attorney and expert witness fees, to the prevailing or
substantially prevailing party.
Sec. 15. (1) Each provider of electric service shall submit to
the commission an annual report that provides information relating
to the actions taken by the provider to comply with the portfolio
standard.
(2) Each provider shall submit the annual report to the
commission after the end of each calendar year and within the time
prescribed by the commission. The report shall be submitted in a
format approved by the commission.
(3) Each annual report shall include all of the following
information:
(a) The amount of electricity and renewable energy credits
that the provider generated or acquired from renewable energy
systems during the reporting period and the amount of renewable
energy credits that the provider acquired, sold, or traded during
the reporting period to comply with its portfolio standard.
(b) The capacity of each renewable energy system owned,
operated, or controlled by the provider, the total amount of
electricity generated by each system during the reporting period,
and the percentage of that total amount that was generated directly
from renewable energy.
(c) Whether, during the reporting period, the provider began
construction on, acquired, or placed into operation any renewable
energy system.
(d) Any other information that the commission determines
necessary.
(4) Biennially, the commission shall file a report with the
legislature that does all of the following:
(a) Summarizes data collected under this section.
(b) Discusses the status of renewable energy in this state and
the effect of this act on electricity prices.
(c) Recommends changes in the definition of renewable energy
resource to reflect environmentally preferable technology.
Sec. 17. The commission shall promulgate rules to implement
this act pursuant to the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328.
Enacting section 1. As provided in section 5 of 1846 RS 1, MCL
8.5, this act is severable.
Enacting section 2. This act does not take effect unless all
of the following bills of the 94th Legislature are enacted into
law:
(a) House Bill No. 5383.
(b) House Bill No. 5384.
(c) House Bill No. 5520.
(d) House Bill No. 5521.
(e) House Bill No. 5522.
(f) House Bill No. 5523.
(g) House Bill No. 5524.
(h) Senate Bill No. _____ or House Bill No. 5549(request no.
05919'07).