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Original article URL: http://bridgemi.com/2012/11/political-winds-bolster-bridge-fuel-tax-review-but-not-renewable-energy/

Public sector

Political winds bolster bridge, fuel-tax review, but not renewable energy

On energy, bridges and taxes, voters spoke volumes on Tuesday.

Defeat of Proposal 3 means, for the foreseeable future, that Michigan will pursue a more limited investment in wind power and renewable energy than neighboring states.

Defeat of Proposal 5 means a simple legislative majority remains the threshold for statewide tax increases, perhaps opening the door to revision of the gas tax.

And despite pouring about $35 million into Proposal 6, the billionaire owner of Detroit’s Ambassador Bridge may be relegated to lawsuits in his quest to block a new public bridge to Canada.

All told, the various ballot campaigns raised more than $150 million to sway Michigan voters. The end result was largely the status quo, except for the repeal of the 2011 rewrite of the emergency manager law.

The winds of energy policy

Proposal 3 would have locked Michigan by constitutional amendment into producing 25 percent of electric power from renewable sources by 2025. Its defeat likely lengthens the odds of reaching that standard by then.

As of 2010, the state generated less than 5 percent of electric power from renewable sources, with less than 1 percent from wind. Public Act 295 requires utilities to generate 10 percent of power from renewables by 2015 – a goal that utility officials and others say is in sight.

To reach 25 percent, utilities would have to dramatically boost wind production beyond the estimated 300 wind turbines now in operation. It would take more than 2,000 more turbines – with some estimates near 4,000 – to meet the 25 percent standard.

“They are not exactly universally embraced around the state,” said former legislator Ken Sikkema, spokesman for Clean Affordable Renewable Energy for Michigan, a utility-backed group which spent $24.4 million to defeat Proposal 3.

The best potential wind power lies offshore in Lake Michigan, Lake Huron and Lake Superior, according to the U.S. Department of Energy. But political opposition can be fierce, as in 2010 when plans by Scandia Wind to put turbines offshore near Pentwater stalled in the face of strong local resistance.

According to analysis by the nonpartisan Citizens Research Council of Michigan, Michigan’s 10 percent renewable standard is among the least aggressive among 29 states with such mandates, with varying dates for attainment. Hawaii, with 40 percent, is followed by California at 33 percent, Maine and Colorado at 30 percent and New York at 29 percent. Minnesota and Illinois have statutory requirements of 25 percent by 2025.

“Our position is that Michigan should reach the 10 percent standard in 2015 and then evaluate it based on a variety of factors,” said Jeff Holyfield, spokesman for Consumers Energy, which vigorously opposed Prop 3. “Those would include its effect on customer bills, the electricity needs of customers, the price of power in the wholesale market, and how the additional renewable energy generating resources work within the state’s generating fleet.”

Renewable energy advocate Stanley “Skip” Pruss believes the state missed a valuable chance with defeat of Proposal 3.

“(Renewable energy use) is going to be less than it would have been,” said Pruss, Michigan’s chief energy officer under Gov. Jennifer Granholm. “We lose momentum.”

About that bridge

With defeat of Proposal 6, state officials can push forward with plans to build a $2.1 billion bridge between Detroit and Windsor. The Canadian government has agreed to pay all property acquisition and construction costs on the Michigan side. Proposal 6 would have required voter approval for any international bridge project.

Manuel “Matty” Moroun, owner of the Ambassador Bridge in Detroit, was the single-largest contributor to any of the six ballot proposals. The People Should Decide, funded by his Detroit International Bridge Co., spent $33.5 million backing Proposal 6.

Barring court challenges by Moroun, the state estimates it will be seven years before the project is completed. Construction of the main bridge span is not expected until the project’s third year.

Gov. Rick Snyder said Wednesday he had “already made some calls” to Washington, D.C., to see how the federal permitting process, needed to advance the project, is proceeding.

While celebrating the Prop 6’s defeat, a Snyder administration official also quickly acknowledged Wednesday that “there’s no way this is over.”

Majority rules, still

Proposal 5 would have mandated a two-thirds vote by the Legislature – or a statewide vote — for any statewide tax increase. Its defeat, coupled with the retention of GOP majorities in the state Senate and House, could afford the Snyder administration maneuvering room in its push to revise the state’s gas tax.

State Rep. Rick Olson, R-York Township, has introduced legislation to scrap the 19-cent tax motorists pay the pump and replace it with a 28.3-cent tax at the wholesale level. Olson also proposes raising registration fees an average of 67 percent for passenger vehicles. This is in line with what Snyder offered in his special message on transportation a year ago.

Taken together, those two measures would raise about $1 billion in added funds many analysts believe are needed to fix the state’s deteriorating roads and bridges.

Olson believes the timing might be right.

“I am hoping something gets done in lame duck,” Olson said, referring to the weeks between the election and when new lawmakers take office in January. Olson opted not seek another term.

“It’s pretty well agreed we need the money. Very few people in an election year want to be the people who do it.”

Ted Roelofs worked for the Grand Rapids Press for 30 years, where he covered everything from politics to social services to military affairs. He has earned numerous awards, including for work in Albania during the 1999 Kosovo refugee crisis.

 

3 comments from Bridge readers.Add mine!

  1. Robert

    The ideas in Proposal 3 were good, just should not have been written into the Constitution. Lets hope the Legislature looks into them in a serious manner. And just ask any trucker who drives back and forth to Canada how much fun driving through downtown Winsor is. Thankfully, the votors of this state saw through all the garbage and voted to not move backwards.

  2. Duane

    NO, Mr. Roelofs and Bridge Magazine the vote on Tuesday did not force “that Michigan will pursue a more limited investment in wind power and renewable energy than neighboring states.” As best I can tell if the technology and the reneweable energy source is competetive with that of other sources there is nothing from the defeeat of Proposal 3 that limits (aside from the State approval process) the investment in renewable energy suorces.

  3. Neil

    The defeat of proposal 3 should not block further development of alternative/renewable energy. That is, if alternative energy is financially sustainable without government subsidies. For the 10 % alternative energy development, how long will higher rates and government subsidies need to be retained? Forever?

    Another consideration is how many additional wind turbines or solar arrays are needed in excess to store power needed when the wind does not blow or the sun does not shine? Is that excess factor 2 times, 3 times, or what additional? Stored power for alternative energy would guarantee base load supply like a coal fired plant would provide. Customers do not disconnect from the grid when the wind does not blow or the sun does not shine. What technology is to be used to store and then deliver the power? How much will all these extra provisions cost?

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