February 20, 2007, Introduced by Senators KAHN, JELINEK, SWITALSKI and RICHARDVILLE and referred to the Committee on Energy Policy.
A bill to require certain providers of electric service to
comply with a portfolio standard for renewable energy; to prescribe
the powers and duties of certain state agencies and officials; and
to provide for penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act:
(a) "Biomass" means any organic matter that is available on a
renewable basis, including, but not limited to, all of the
following:
(i) Agricultural crops and agricultural wastes and residues.
(ii) Wood and wood wastes and residues.
(iii) Animal wastes.
(iv) Municipal wastes.
(v) Aquatic plants.
(b) "Commission" means the Michigan public service commission.
(c) "Portfolio standard" means a portfolio standard for
renewable energy established by the commission under this act.
(d) "Provider" means any person or entity that is in the
business of selling electricity to retail customers in this state.
(e) "Renewable energy" means any of the following:
(i) Biomass.
(ii) Geothermal energy.
(iii) Solar thermal energy.
(iv) Wind energy.
(f) "Renewable energy system" means any of the following:
(i) A facility or energy system that uses renewable energy to
generate electricity and transmits or distributes the electricity
that it generates from renewable energy.
(ii) A solar thermal energy system that reduces the consumption
of electricity.
Sec. 2. (1) For each provider, the commission shall establish
a portfolio standard for renewable energy. The portfolio standard
shall require the provider to generate or acquire electricity from
renewable energy systems in the following amounts:
(a) For calendar years 2006 through 2008, not less than 4% of
the total amount of electricity sold by the provider to its retail
customers in this state during the calendar year.
(b) For calendar years 2009 through 2011, not less than 5% of
the total amount of electricity sold by the provider to its retail
customers in this state during the calendar year.
(c) For calendar years 2012 through 2014, not less than 6% of
the total amount of electricity sold by the provider to its retail
customers in this state during the calendar year.
(d) For calendar year 2015 and for each calendar year
thereafter, not less than 7% of the total amount of electricity
sold by the provider to its retail customers in this state during
the calendar year.
(2) In addition to the requirements under subsection (1), the
portfolio standard for each provider shall require all of the
following:
(a) That of the total amount of electricity that the provider
is required to generate or acquire from renewable energy systems
during each calendar year, not less than 1% of that amount must be
generated or acquired from solar renewable energy systems.
(b) If the provider acquires electricity from a renewable
energy system under a renewable energy contract with another party,
the contract shall provide both of the following:
(i) That the term of the renewable energy contract shall be not
less than 20 years, unless the other party agrees to a renewable
energy contract with a shorter term.
(ii) That the terms and conditions of the renewable energy
contract are just and reasonable, as determined by the commission.
(3) If, for the benefit of 1 or more of its retail customers
in this state, the provider has subsidized, in whole or in part,
the acquisition or installation of a solar thermal energy system
that qualifies as a renewable energy system and that reduces the
consumption of electricity, the total reduction in the consumption
of electricity during each calendar year that results from the
solar thermal energy system is considered to be electricity that
the provider generated or acquired from a renewable energy system
for the purposes of complying with its portfolio standard.
(4) The commission may establish a system of renewable energy
credits that may be used by a provider to comply with its portfolio
standard.
(5) If a provider is unable to comply with its portfolio
standard through the generation of electricity from its own
renewable energy systems or the use of renewable energy credits,
the provider shall acquire electricity under 1 or more renewable
energy contracts.
(6) If the commission determines that there is not or will not
be a sufficient supply of electricity made available to a provider
under renewable energy contracts with just and reasonable terms and
conditions, the commission shall exempt the provider, for that
calendar year, from the remaining requirements of its portfolio
standard or from any appropriate portion of the standard.
(7) If considered in the public interest, the commission may
approve a rate that allows a regulated rate provider to recover
from its retail customers the cost of providing total renewable
energy.
(8) The commission shall determine whether the terms and
conditions of a renewable energy contract are just and reasonable.
(9) As used in this section:
(a) "Renewable energy contract" means a contract to acquire
electricity from 1 or more renewable energy systems owned,
operated, or controlled by third parties.
(b) "Terms and conditions" includes the price that a provider
of electric service is to pay to acquire electricity under a
renewable energy contract.
Sec. 3. (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 its 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 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 may require.
Sec. 4. (1) If a provider does not comply with its portfolio
standard for any calendar year and the commission has not exempted
the provider from the requirements of its portfolio standard, the
commission may impose a fine or take other appropriate action
against the provider.
(2) The commission may impose a fine against a provider based
on either of the following:
(a) Each kilowatt-hour of electricity that the provider does
not generate or acquire from a renewable energy system or a solar
thermal renewable energy system during a calendar year in violation
of its portfolio standard.
(b) Any other reasonable formula adopted by the commission.
(3) If the commission imposes a fine against a regulated rate
provider, then all of the following apply:
(a) The fine is not a cost of service of the provider.
(b) The provider shall not include any portion of the fine in
any application for a rate adjustment or rate increase.
(c) The commission shall not allow the provider to recover any
portion of the fine from its retail customers.