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The Upper Peninsula Task Force has released its final report, a culmination of almost two years of conversations with energy providers, municipal leaders, regulators, academics, consultants and the general public. While the goal of the report is “to provide a roadmap for actions the state could take to improve affordability, enhance reliability, and promote energy security for UP residents,” the issues it confronts are some of the thorniest energy supply problems found anywhere.
That means that while the focus is how to help UP residents, the report is very relevant for energy consumers anywhere, including the Lower Peninsula. If policymakers and communities can address affordability and energy insecurity in a region with some of the most challenging geography for delivering electricity to customers, they can do so anywhere.
(For more background on why the UP is unique, read through our blog posts on the subject over the last two years, such as this post kicking off this project and also this post.)
When Gov. Whitmer formed the task force in June 2019, the Citizens Utility Board of Michigan described the moment as a “crossroads” for the region. Now that the final report is in hand, we can review what direction the task force is suggesting, and what the first steps are to start moving in that direction.
Energy waste reduction (EWR)
Three of the report’s recommendations are about improving energy efficiency. Doing so would make UP residents less vulnerable to disruptions in energy supply because they would use less energy to begin with, while still getting the same value. “Past estimates of energy-efficiency opportunities in the Upper Peninsula indicate over $250 million in potential net benefits for UP utilities and their customers if all cost-effective and achievable energy waste reduction is captured from 2017 to 2036,” the report said. These recommendations are:
- The MPSC should review energy waste reduction plans and integrated resource plans of investor-owned utilities operating in the UP “to ensure that utilities are seeking to capture all cost-effective and achievable energy-efficiency potential” and the state legislature “should remove the sunset on requiring electric cooperatives and municipal utilities to offer cost-effective EWR programs and to achieve annual savings at specified target levels.”
- “The Department of Environment, Great Lakes, and Energy [EGLE] should define opportunities to provide grant funding or other resources—such as revolving loan funding dedicated to the UP—to expand access to energy investments and to enable customers to obtain financing for substantial and cost-effective upgrades.”
- “The Propane Commission should also consider opportunities to integrate implementation of efficiency initiatives targeted to propane users with other program providers that serve electric and natural gas utilities as well as providers who conduct low-income home weatherization work to ensure comprehensive services that deliver meaningful savings.”
Energy storage
Storing energy using technologies like lithium-ion batteries has proven effective in isolated regions with high energy costs and where the geography makes the flow of energy more difficult, such as islands. So the UP is a great candidate to benefit from energy storage, which allows energy to be gathered when prices are high and then deployed (such as the discharging of a battery) when prices are low.
A “storage roadmap” is currently being developed by EGLE, and this study should “take into consideration the unique nature of the UP electric grid and identify specific opportunities for storage deployment in the region, such as incentives for residential energy storage,” according to another task force recommendation.
Electric vehicles (EVs)
We wrote a whole blog post about how EVs could make a difference for the UP. Regarding EVs, the task force recommends that EGLE “provide dedicated grant funding to expand fast-charging infrastructure.”
Renewable energy siting
Utilities like Upper Peninsula Power Co. have identified renewable energy sources like wind and solar among their cheapest options for power going forward. But a factor that prevents utilities from tapping these sources is the difficulty of siting renewable energy projects. The task force recommends that EGLE assist regional planning organizations and local communities in the UP to streamline renewable energy and EV infrastructure development through zoning. It also recommends that the state develop “a comprehensive inventory of brownfields, postindustrial sites, and marginal state lands for energy infrastructure development” so that more potential sites can be identified.
Propane pre-buy
The task force’s first report was about the propane market in the UP, including the question of how to keep home heating affordable in the scenario of a Line 5 disruption. The final report also plays into some of the reforms discussed in the first report. Specifically, Recommendation 10 is that the MPSC and the Michigan Department of Health and Human Services should convene a workgroup to identify changes to the state’s implementation of the Low Income Home Energy Assistance Program (LIHEAP) that would allow energy assistance funding to be used to “pre-buy” propane so consumers who rely on it will be less likely to face a situation where they run out of heating fuel in the midst of winter when prices are higher. This recommendation is supposed to work in concert with the task force’s recommendation in its first report that the legislature should explore levying a surcharge on propane fuel that would fund an energy waste reduction and weatherization program specifically for propane users. The recommendations are related in that if people who depend on propane for heating can use it more efficiently, they will not need to have as much of the fuel ready for emergencies.
Conversions to electric heating
An alternative to propane heating is electric heating, which also can be powered by renewable energy. The task force recommends that EGLE “support research to determine the potential for electric heating conversion in the UP, identify best practices for setting electric heating rates and opportunities for collaboration among utilities, contractors, and manufacturers.”
As you may notice, many of these recommendations involve further study and discussion with stakeholders. So while the task force’s assignment is complete, the same kind of work that went into this report will need to continue if a transformation of the UP energy system is to be realized.