Biggest Game In Town: How More Than 100 Lobbyists Have Tried To Sway The State's Energy Overhaul

Many Of Michigan's Largest Interest Groups Share Common Interests In The Cost Of Electricity And In Trying To Influence Policy Changes

By CRAIG MAUGER
Michigan Campaign Finance Network

LANSING — The ongoing debate over the future of energy in Michigan and who should pay for it has supercharged interest groups and the lobbyists they employ in Lansing.

At least 145 registered lobbyists have either submitted official position statements to the Legislature’s two energy committees about pending energy reforms or are registered as working for the key players in the proposals.

In addition to the lobbyists working on the legislation, at least 86 individual companies have made their positions known by providing official statements to lawmakers. They range from Ford Motor The top photograph shows the scene at a Senate Energy and Technology Committee this spring. Company to a Holiday Inn Express in Bad Axe. On top of those businesses, at least 95 interest groups or governments have also officially weighed in.

At the center of the fight are the state’s dominant electric utilities, DTE Energy and Consumers Energy. Combined, the two utilities have 42 individuals or firms that are registered as lobbyists they employ. However, DTE says not all of its lobbyists are actively working on energy reforms. Plus, DTE and Consumers each work with at least one of the state’s eight largest multi-client firms, which don’t have to disclose how many of their lobbyists are working on specific proposals.

On top of the lobbying, political action committees (PACs) for DTE and Consumers are among the most generous in Michigan. Either DTE or Consumers is among the top 10 donors for 78 of the state’s 145 current legislators, according to MCFN’s new donor-tracking database, which counts donations back to 2011.

The DTE and Consumers PACs have given to all but four of the state’s 145 lawmakers. Since 2011, DTE has been the top donor to House Energy Chair Aric Nesbitt (R-Lawton), and CMS Energy and its principal subsidiary Consumers Energy have been Nesbitt’s third largest donor. For Senate Energy Chair Mike Nofs (R-Battle Creek), DTE has been the second largest donor while CMS Energy and Consumers have been the fourth largest.

In addition to the PAC giving, it’s believed the utilities helped fund a nonprofit organization, Citizens for Michigan’s Energy Future, that ran likely more than $2 million in ads about Michigan’s looming energy shortfall in 2014 and 2015. The projected upcoming capacity shortfall that's discussed in the ads is a main reason lawmakers are trying to take action this year.

But the utilities are far from the only big players in the energy debate. Major Michigan businesses, like Amway and Dow, have spoken out on the subject, and business groups, like the Michigan Chamber of Commerce, are working to influence the energy bills.

Energy Choice Now, a coalition that’s opposing some of the dominant utilities' key desires, has been outspoken on the proposals before the Legislature. It ranked among the top 10 donors to Rep. Mike Shirkey (R-Clarklake), a key member of the Senate Energy Committee. NextEra Energy, which describes itself as a clean energy company, has been the second largest donor to House Energy Vice Chair Gary Glenn (R-Midland).

Also interested in the bills before the Legislature are environmental groups, like the Sierra Club and the League of Conservation Voters. Currently, Michigan law includes a requirement that a certain percentage of the state's energy come from renewable sources. Bills advancing in the Senate would change the requirement to a goal. In addition to businesses and environmental groups, labor unions who work on energy projects across Michigan have also spoken out.

Whether they’re driven by money or conviction, all of these interests have some stake in what the Legislature decides to do when it comes to regulating how energy is provided and ensuring its reliability.

“Everyone gets an electric bill,” said Andy Balaskovitz, a reporting fellow with Midwest Energy News, who’s been covering the debate in Lansing. “This could end up affecting everyone across a broad spectrum of people.”

All of the input from Lansing groups has led some individuals to question their own ability to impact the energy legislation. James Woodyard, of Dearborn, attended a committee meeting in early 2015. He said the crowd for the meeting seemed to be made up of what he described as “the media and corporate interests.”

The House Energy Policy Committee began debating an energy package in March 2015. In November 2015, the committee advanced three bills, HB 4297, HB 4298 and HB 4575 to the full House. Since then, the bills have been stalled before the full House, and the debate has focused on the Senate, where the Senate Energy and Technology Committee began hearing testimony on its own bills in July 2015.

The committee advanced SB 437 and SB 438 in May. Those bills are now awaiting action before the full Senate.

Utilities: Electric Choice Costs Customers; Companies, Schools: Changing It Would Cost Us

The ongoing disagreements focus on two core matters, among others: electric choice, customers’ ability to purchase energy from suppliers on open markets; and net metering, which affects the value of energy generated by customers’ personal solar panels.

Currently, state law allows up to 10 percent of the state’s electricity sales to be purchased from alternative suppliers on open markets. Michigan’s dominant utilities, like DTE Energy and Consumers Energy, don’t like the current choice setup. They say at a time of projected capacity shortfalls, it’s problematic for the reliability of energy statewide. They've also said electric choice has led to $1.6 billion in additional costs for customers.

The bills that passed the Senate Energy and Technology Committee require the calculation of generation capacity service costs and the assessment of a surcharge for those taking energy from alternative suppliers.

But supporters of electric choice argue that the current system provides competition and leads to lower prices, at least for them. School districts and major corporations that benefit from getting electricity from alternative suppliers have repeatedly argued that the current setup needs to be maintained. In written testimony, Bryan Harrison, a lobbyist for Amway, said “freedom to negotiate with a private provider” has led to $7 million in savings for his company. Daniel Wolter, a lobbyist for Pfizer, said Pfizer “opposes any legislative effort to eliminate or lessen electric choice.”

The Michigan Chamber of Commerce, which has members that benefit from electric choice, is also pushing to protect it. In May, Jim Holcomb, a Michigan Chamber lobbyist, told the Senate Energy Committee, that the bills the committee reported, which establish new standards for alternative providers, still needed work.

Solar Panel User 'Livid' About Proposed Reforms

Another major topic of disagreement is over net metering, which allows customers to put solar panels on their homes, to generate their own energy and to reduce their electric bills. Under current net metering terms, those customers can sell their surplus energy back to the dominant utilities at retail price.

The bills approved by the Senate committee would allow for a “grid charge” to be applied to surplus electricity sales by new customers who participate in net metering, among other changes. They would also allow current terms to continue for current net metering customers for 10 years. But net metering supporters, like Florence Cutter, of Rapid River, argue that the proposed changes benefit the utilities at a cost to private individuals who want to generate their own clean energy.

Cutter and her husband, Donald, who are both retired, installed 12 panels on their Upper Peninsula home, decreasing their electric bill by about $120 a month.

She said she sent letters to all 10 members of the Senate Energy and Technology Committee about net metering, only hearing back from the three Democratic committee members. She argued that it seems like big corporations are trying to tell people how to live.

“To the tell you the truth, it makes me livid,” Cutter said. “ It makes me really angry.”

On the other hand, the utilities argue that customers with solar panels on their roofs are being subsidized by other traditional customers who have to pay the costs of maintaining the electric grid.

“Whether buying, selling or receiving reliability support for their appliances, rooftop solar customers utilize the grid and utility backup generation,” said Irene Dimitry, vice president of business planning and development for DTE, according to committee testimony. “By crediting the solar generation at the full retail rate, rooftop solar customers are avoiding paying their fair share for the use of the grid and the need for backup power.”

'We Also Feel We Have A Responsibility To Our Customers'

Over the last year and a half, lobbyists on both sides of the net metering and electric choice subjects have been working hard trying to persuade lawmakers.

Consumers Energy has 14 active registered lobbyists, including one of Michigan's largest multi-client firms, Governmental Consultant Services Inc. (GCSI). DTE has 28 active registered lobbyists, including three firms. Public Affairs Associates is one of the main multi-client firms making the case for DTE.

Renze Hoeksema, vice president of governmental affairs for DTE, said not all 28 of the lobbyists registered with DTE are lobbying the energy bills. DTE has three registered lobbyists in its Lansing office, he said, and other executives are registered and participate in policy discussions from time to time.

“We not only have an obligation to inform policy makers about the pending shortfall in electric reliability and the actions we're taking, but we also feel a responsibility to our customers to ensure they don't end up further subsidizing other electric providers who are not investing in generation to serve their customers,” Hoeksema said in an email.

As it stands, Republicans — divided by the electric choice issue — are having trouble getting the votes needed to pass a plan without having to give in to Democratic proposals for amendments. Democrats want a stronger renewable energy standard and net metering protections in the bills. But Republicans have tried to use the support of labor groups to pressure Democrats.