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New report: "25 x '25" ballot proposal would have negligible effects on utility rates

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A ballot proposal to increase Michigan’s renewable energy usage wouldn't have a big impact on utility rates, according to a new reportcommissioned by supporters of Proposal 3.

That "25 x '25" measure would require amend the state constitution to require Michigan to generate 25% of its electricity from renewable sources by 2025.

The Michigan Environmental Council sponsored the report, performed by independent analysts Martin Cohen and George Sansoucy.

It concludes that transitioning the state's power toward renewables would raise rates very slightly, by about 50 cents a month, between 2015 and 2025.

But after that, it’s a “gravy train,” argued the Michigan Environmental Council's James Clift. “By 2027, it’s actually lowering your energy cost because we can lock in to very stable, reasonably-cost power of the future.”

Douglas Jester, with the group Five Lakes Energy, said Proposal 3's "net effect would be quite small." That's largely because the technologies that harness renewable energy have gotten better and cheaper, while prices for non-renewable power sources--especially coal--have soared.

“We are to the point now where renewable energy is essentially in the same price range as the traditional forms of energy," Jester said. "Cheaper than new coal, and new nuclear…about on par with new natural gas generation.”

The report argues that Michigan's major utilities, Detroit Edison and Consumer's Energy, acknowledge as much in filings with the Michigan Public Service Commission. It also found that if the status quo continues, large utilities will need to make significant investments in upgrading or closing old power plants and implementing pollution controls--costs that will will be passed onto the consumer anyway.

The report also suggests tapping more renewable energy would also help stabilize energy prices, buffering the state against volatile fuel prices, while also providing an economic boost and environmental benefits.

Proposal 3's opponents have called the “25-by-25” standard “unreasonable,” “short-sighted,” and the ballot language “dangerously vague.”  

That opposition, backed largely by Michigan's utilities, say the state's current 10% renewables-by-2015 standard is stringent enough. They call the new report "a funny math sheet."

“There is no way that a $12 billion project can be paid off at 50 cents a month by ratepayers,” said Megan Brown, spokesperson for The Clean Affordable Renewable Energy (CARE) for Michigan Coalition. “The claims by these hired out-of-state guns fly in the face of common sense.”

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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