A Sharp Stick

Recently, I have been reminded multiple times of the old axiom, “It’s better than a sharp stick in the eye.” Well, I have to say that there have been times in the last couple weeks and months where I have contemplated the proverbial sharp stick as the course of least pain and suffering on the statewide level.

Statewide, there is a new term. It is “feed-in tariff” or more appropriately “FIT”. This is the concept where a form of renewable energy such as a solar panel installation would be guaranteed a rate of return as set by state government. This guaranteed return could be as high as 50 or 60 cents per kilowatt hour. Consumers Energy has an experimental tariff at these levels right now. To put this in perspective, you are paying about 8.5 cents today at your home.

This means that someone with the wherewithal to invest thousands of dollars in a solar system would be able to sell the energy produced for more than 7 times what your cooperative buys it for from our wholesale supplier. Legislation being discussed in Lansing would require utilities like CEC to purchase this expensive source of generation. CEC would then be forced to spread it into the rates that are billed to every member.

The ultimate goal is to promote the use of solar energy and possibly create jobs in Michigan. As manager of your cooperative and a father of college age kids about to enter the workforce, I would love to see the Michigan economy improve BUT I think subsidizing any industry or endeavor to the tune of 7 times above my average cost is simply not logical. It would be a hidden tax that only those wealthy enough to afford the high priced solar panels would benefit from. I suggest that solar manufacturers look at the materials and processes to come up with a product that is competitive in the market.

Cherryland does support putting renewable energy onto our system. We currently are paying the full cost of retail (8.5 cents) to several local installations when they have excess power to sell. We do this to support those members who are looking for alternatives but we only do so because at this level, while higher than the average wholesale energy purchased, we can put it in our mix affordably and reasonably. Now, force me to 60 cents and that sharp stick starts to look really good.

Michigan already has a renewable portfolio standard that requires all utilities to get 10% of their wholesale energy from renewable resources by 2015. There is now talk of raising this to 30% by 2025. While wind power is considerably cheaper than solar energy, it still remains at least 70% higher than my wholesale costs.

Through Wolverine’s vision and collaboration with John Deere Wind Energy, we became part of the first and largest commercial wind farm in Michigan BEFORE any state mandate. This happened because we got an affordable rate, found manufacturers who wanted to purchase more expensive green energy and the deal got done for all members. We will not get such a deal again because the state mandate has reduced our ability to negotiate.

So, with my negotiating hands tied and state legislators considering raising the bar to 30%, I have to take the position that 10% is enough. The solution to be responsible stewards of our environment while keeping rates affordable lies in creating a balance of renewable energy, conservation efforts, cleaner coal technology and expansion of nuclear plants.

The solution does not lie in unrealistic state mandates and subsidies paid by the poor to benefit the rich. We will keep fighting for affordability. If we don’t, we are doing all members a disservice. Members need to subsidize more government mandates like they need a sharp stick in the eye.