Michigan Turns the Corner toward Energy Efficiency

Martin Kushler

As Michigan decision makers invest more money in energy efficiency, the state’s market has accelerated forward dramatically since 2008. According to this interview with Martin Kushler, senior fellow at American Council for an Energy-Efficient Economy, this transformation in the market has been encouraged by a coalition representing diverse viewpoints.

CEFF: What’s your perspective on the energy efficiency market’s successes and challenges at this time in Michigan?

Kushler: I think Michigan’s been quite a success story.

I don’t know if you saw the blog post I did, but that’s a snapshot of how robust our energy efficiency activities have been. This is especially in contrast to prior to 2008, when utilities had zero electric or gas energy efficiency programs.

I was just looking at the most recent report that the Michigan Public Service Commission put out for 2016. That is the last year for which data are available. Electric and gas utilities together spent $263 million on energy efficiency programs, so that’s a fairly significant economic injection into energy efficiency.

CEFF: What stakeholder decisions would catalyze forward movement in the energy efficiency market in Michigan?

Kushler: I think we’ve already made really good progress.

In 2016, we got legislation passed that eliminated the prior spending cap on the efficiency programs. $263 million was what it was before, but there was still a 2-percent-of-revenue spending cap in 2016. That is now eliminated.

The legislature also created additional higher incentives for utilities so that they saved 1.25 or 1.5 percent. The standard is 1 percent. And that was active in 2008.

Now, there’s a higher incentive. Both of our major utilities announced they were planning to save 1.5 percent a year. There’s already been a considerable amount of progress, considering they’re in the midst of implementing the programs to get those higher savings.

In terms of stakeholders, it’s probably noteworthy that over the years, Michigan has assembled a coalition of groups that advocate for clean energy solutions. It’s a loose group called Michigan Energy, Michigan Jobs. And under that umbrella, we have had quarterly meetings. It’s Michigan League of Conservation Voters, Sierra Club, Michigan Environmental Council, and other groups. Several conservative groups participate. It’s a very robust coalition.

Note: Emma McDonald contributed research to this article.

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