The current battle is to simply stop the inertia of decline, but we need to follow through.
“Don’t fight a battle if you don’t gain anything by winning.” There seems to be some dispute as to whether this was actually said by either General George Patton or Field Marshall Erwin Rommel, but everyone seems to agree that one of them said it. Whether we’re discussing a military battlefield or a political one, it’s pretty sound advice either way, often more commonly worded as, “be selective about the fights you pick.” A logical corollary of this maxim is that if you’re going to accomplish anything, then (a) you should have a realistic expectation of what can be accomplished, and (b) know why winning this particular battle will advance the larger goal. And, as any strategist or tactician worth the title will advise, the smart thing to do is to already have a plan for follow-up in place . . . because you’re going to need one should you actually win.
This is where Michigan’s constitutionalist insurgency has done a marvelous job of dropping the ball post-2010, and as a result now has a task that’s four times harder than it needed to be. The upside is that this fight is still winnable, if we stay focused on a realistic expectation of what we’ll actually accomplish by winning it.
So how should average middle class Michiganders engage in this electricity debate? What should they demand in the 2015 legislation on electricity? Can they prevent the titans from looting their family budgets?
First and foremost, Michiganders should demand an end to hybrid deregulation. All electricity consumers should be under the same regulatory scheme, with equal options to escape. No favoritism. This aligns the interests of politically potent, large electricity consumers with those of the average Michigander. This creates an effective counterbalance to the political power of the utilities; political power purchased with your electricity payments. Even full regulation is preferable to our current hybrid deregulation scheme.
Michiganders should further demand full deregulation of our electricity market. As regulated entities, utilities have a ‘cost plus’ mindset which relentlessly drives prices higher. Regulatory bodies limit themselves to dampening this drive for higher prices, but do not drive efficiencies which would genuinely control energy costs. Competition-driven efficiencies are very important to Michigan’s economy, which still has a significant, energy-intensive industrial base. Also Michigan’s utilities have not demonstrated any special competence operating their electrical power stations, so competition in the supply of electricity will promote best practices there and lower costs as well. Ultimately, a deregulated grid properly managed is more tolerant of supply shocks because more actors will be supplying the electricity.
The RPS should not be renewed at any level. Renewables should not be forcibly subsidized by any ratepayers, overtly or covertly. The current PA 295 regulatory scheme has residential electricity consumers subsidizing renewables through skyrocketing rates, while large consumers escape this burden. As renewable energy sources become cost effective, they will be welcomed by all parties.
If environmental wackos want their own electricity to come from RPS renewables, let them pay the full cost including base load backup costs. Most renewable sources are intermittent and require expensive base load backup capacity for periods where they cannot generate electricity. The Midwest Independent Transmission System Operator (MISO) historical record shows that Michigan wind power, by far the most significant current RPS component (883 turbines, about 58% of RPS power), was only available 31.5% of the time (termed ‘capacity factor’) during 2011 and 2012. During two months, July and August of 2011, wind was available only available 16% of the time. Most evaluations of the cost effectiveness of wind and solar generation pointedly neglect the costs of base load backup capacity to keep the lights on. Essentially, wind power capacity has to be backed up by 100% of its rated capacity with fossil-fueled base load capacity to prevent blackouts during zero wind periods, so why bother install wind power (or solar, for that matter) in the first place? Ratepayers subjected to RPS get to pay the capital costs for twice the generating capacity they actually need.
Fortunately, the greed political acumen of DTE and CMS Energy is coming to your rescue. Both utilities are seeking full reregulation of Michigan’s electricity market. They are issuing thinly veiled threats about brownouts ‘reliability’ of supply unless Michigan forces the fortunate 10% back into our utilities’ waiting arms. And with President Obama’s hobbling of coal-fired power stations ramping up, they actually have a point. So the fortunate 10% will have to seriously reengage in Michigan’s electricity rate debate or their electricity costs will skyrocket.
Things may have quieted down in Michigan after Proposal 3’s demise in 2012, but President Obama’s EPA were furiously developing their ‘War on Coal’ to dramatically increase the cost reduce pollution of electricity generation. The Mercury and Air Toxics (MATs, also known as MACT) rule requires scrubbers on all coal-fired power plants nationally, costing something north of $ 1 million per steam boiler. The Cross State Air Pollution Rule (CSAPR) requires Michigan coal-fired power plants to reduce their thermal efficiency during peak summertime generating periods to reduce oxides of nitrogen at a yet to be determined cost.
In 2014, EPA’s ‘Cooling Water Intake Structures’ rule finally went into effect after a decade of legal wrangling, requiring that Michigan’s electrical utilities take some very expensive steps over 8 years to protect the Great Lakes’ beloved zebra mussel and round goby populations.
At the end of 2014, EPA imposed newly restrictive rules on the disposal of coal combustion residuals (CCRs), commonly known as coal ash, from coal-fired power plants. Almost unique in the history of Federal regulation, EPA admitted in their final CCR rule that it had a negative cost-benefit ratio. Fly ash, the most abundant CCR, is actually a remedy for the alkali-silica reaction (ASR) which causes premature failure of many MDoT concrete structures. So EPA managed to simultaneously increase Michigan’s cost of electricity generation and reduce the lifespan of our roads and bridges. An Obama ‘two fer’.
Even the helmet-less motorcyclists strawman numbers are down. So much for the alleged ‘untouchable’ $18,000,000,000.00 *fund* that Lansing politicians are protecting for their insurance industry lobbyist friends, huh? It’s on the table for discussion now, governor Snyder.
Dave Waymire, a spokesman for the Safe Roads Yes ballot committee campaigning for the measure’s passage, said most residents do not claim itemized deductions on federal returns. Crummy roads cost drivers an extra $539 a year in vehicle operating costs [Snyder’s peoplereally cannot keep their figures straight, can they?] due to repairs, tire wear and increased fuel consumption, according to the proposal’s proponents who cite a report from the transportation research group TRIP [another quasi-governmental organization like PASER – that’s a Fact].
“Many Michigan residents today pay a hidden tax for our poor roads by virtue of [incompetency bordering criminal intent] the high cost of repairs that are incurred due to potholes, extra wear and tear on their vehicles,” Waymire said. “If you consider the hidden tax [or the BIGGER hidden tax on top of the 16.7% hike that is Proposal 1], which our opponents refuse to acknowledge, this is a substantial [Zero] savings for Michigan.”
Another “unadvertised feature” of the plan is that taxes on fuel sold for boats, off-road vehicles and lawnmowers would rise significantly because the fuel would not be exempt from the sales tax, Anderson said. The new 7 percent sales tax [hike of 16.7%] would only be removed from fuel used to operate motor vehicles on public roads, raising compliance issues [see Here and Here] since the vast majority of fuel is sold by gas stations without regard to whether someone is filling up a car, boat or gas can, according to the nonpartisan Citizens Research Council of Michigan.
“Some promise it will be fixed. It’s not fixed now, so we included it,” said Anderson. He said he is not a “fan” of Proposal 1 but when his research company crunches numbers, “we do them straight.”
Taken together, these circumstances will trigger a wild four-way donnybrook pitting electrical utilities, electricity consumers, and environmental wackos against one another later this year. But this is only three parties, so why do you say four-way? Large industrial consumers have substantially escaped the consequences of PA 295, while smaller Michigan consumers – including residential consumers – have experienced the fifth highest rate of electricity cost increases in the nation. These two electricity consuming groups’ interests do not coincide.