March 29, 2007, Introduced by Senators BARCIA, THOMAS, OLSHOVE, HUNTER, PRUSI, ANDERSON, JACOBS, SCOTT, CHERRY, BASHAM, CLARKE, WHITMER, SCHAUER, BRATER, SWITALSKI, CLARK-COLEMAN and GLEASON and referred to the Committee on Energy Policy and Public Utilities.
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; to
create a fund; and to provide for penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act:
(a) "Biomass" means cellulosic organic material from a plant
that is planted to produce energy or nonhazardous plant matter
waste material that is segregated from other waste materials and is
derived from any of the following:
(i) An agricultural crop, crop by-product, or residue resource.
(ii) Waste such as landscape or right-of-way tree trimmings,
but not including the following:
(A) Municipal solid waste.
(B) Recyclable postconsumer waste paper.
(C) Painted, treated, or pressurized wood.
(D) Construction debris.
(E) Wood contaminated with plastic or metals.
(F) Tires.
(iii) Gasified animal wastes.
(iv) Landfill methane.
(b) "Commission" means the Michigan public service commission
in the department of labor and economic growth.
(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) By December 31, 2009, 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.
(b) By December 31, 2012, not less than 9% of the total amount
of electricity sold by the provider to its retail customers in this
state during the calendar year.
(c) By December 31, 2015, not less than 13% of the total
amount of electricity sold by the provider to its retail customers
in this state during the calendar year.
(d) By December 31, 2018, not less than 16% of the total
amount of electricity sold by the provider to its retail customers
in this state during the calendar year.
(e) By December 31, 2020, not less than 20% 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 5% 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 10 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.
(c) Any biomass combustion the provider uses to meet the
requirements of subsection (1) must meet the best available control
technologies for emissions. Preference should be given for gasified
biomass technologies.
(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) The commission shall determine whether the terms and
conditions of a renewable energy contract are just and reasonable.
(8) 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 utility does not meet its portfolio standard
as required under section 2, the commission shall impose on the
provider a fine of $55.00 per megawatt hour for each renewable
energy credit that the provider does not generate or acquire from a
renewable energy system during a calendar year in violation of its
portfolio standard.
(2) The commission shall annually adjust the fines that will
be imposed for each calendar year using the prevailing consumer
price index for the Detroit region.
(3) If the commission imposes a fine under subsection (1)
against a 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.
(d) Money resulting from any fines imposed on a provider shall
go into a public benefits fund which is hereby created within the
state treasury. Money in the fund at the close of the fiscal year
shall remain in the fund and shall not lapse to the general fund.
The commission shall expend money from the fund, upon
appropriation, to promote and grow renewable energy generation in
this state.