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MPSC reports: Energy Waste Reduction to Save Customers $1.1 Billion

Energy waste reduction efforts saved nearly 1.5 million MW hours of electricity and almost 5 million cubic feet of natural gas in 2018, while wind generation of electricity continued its dominance in Michigan as the largest source of renewable energy in 2019, according to two annual reports released today by the Michigan Public Service Commission.

Energy Waste Reduction

The 2018 Utility Energy Waste Reduction Programs report found 64 investor-owned, cooperative and municipal electric companies in Michigan spent more than $236.6 million on energy waste reduction (EWR) programs. Statewide, natural gas utilities spent nearly $96.2 million.

Combined, the nearly $333 million spent on EWR is expected to save customers nearly $1.1 billion in utility costs over the 12-year lifecycle of the EWR efforts adopted in 2018. According to the report, for every $1 spent on EWR programs in 2018, customers should realize savings of $3.18.

The report found that EWR programs cost utilities $16.23 per megawatt hour, significantly cheaper than the $42.80 per megawatt hour it would cost through building new generation facilities.

Utilities in 2018 spent nearly $40 million on EWR programs for qualified low-income households, up from just around $26 million the year before. These programs reduce the energy burden, improve health outcomes and strengthen the economic security of low-income customers and communities. The MPSC’s EWR Low Income Workgroup, which includes state agencies, utilities and outside organizations, continues its work to develop initiatives to reduce energy costs low-income constituencies. More information is available at the MPSC’s Low Income Workgroup page.

Michigan’s EWR standard was created in 2008 and amended in 2016. It requires all natural gas and electric utility providers to implement customer programs that lower energy use to reduce the future cost of service.

Renewable Energy

Separately, the MPSC’s annual Report on the Implementation and Cost-Effectiveness of the P.A. 295 Renewable Energy Standard found that utility-scale wind turbines accounted for 70 percent of the approximately 3,100 MW of renewable energy capacity in 2019.

Hydroelectric facilities held steady at 12 percent, as did landfill gas at 5 percent, solar installations at 4 percent and municipal solid waste at 3 percent. Biomass declined to 6 percent from 7 percent the year before.

Across the state, new wind and solar projects are expected to add more than 1,000 MW of new, utility scale renewable electricity generation in 2020 and 2021. One utility-scale solar farm is expected to become commercially operational in 2021: the 100 MW River Fork Solar Farm in Calhoun County. Six additional utility-scale wind farms are expected to become commercially operational in Michigan in 2020:

Crescent Wind, Hillsdale County, 166 MW.

Fairbanks Wind Park, Delta County, 72.45 MW.

Gratiot Farms Wind, Gratiot County, 150 MW.

Isabella I, Isabella County, 197 MW.

Isabella II, Isabella County, 186 MW.

Polaris Wind Park, Gratiot County, 168 MW.

Among the report’s other findings:

Since P.A. 295’s passage, $3.9 billion has been invested to bring about 1,877 megawatts of new renewable energy projects online through 2019.

The weighted average cost of solar for Consumers Energy decreased significantly from $160.00 to $54.69, a change due to a Consumers Energy 100 MW solar energy power purchase agreement with a levelized cost of $44.16 per megawatt hour added to the Consumers Energy portfolio. This lower weighted average for Consumers affected the combined weighted average for Consumers Energy and DTE Electric Co. The combined weighted average for solar is now $73.08 — a significant decrease from last year’s combined weighted average of $121.27.

The weighted average price of renewable energy projects and contracts is $61.74 per megawatt hour, down from $68.27 the year before.

The Michigan Bureau of Labor Market Information and Strategic Initiatives found that renewable energy related industries displayed job gains from 6,775 in 2005 to 10,100 as of the second quarter of 2019.

Under Public Act 295, electricity providers were required to meet a 10 percent renewable energy standard based on retail sales by 2015. Public Act 342 of 2016 raised the requirement to 12.5 percent in 2019 and 2020, and 15 percent by the end of 2021. All electricity providers subject to the standards met the goals.

Electric provider renewable energy annual reports for 2009-18 are available on the MPSC’s website.