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Top Twelve Proposal 3 Questions

Oct 30, 2012
1. What will Proposal 3 do?

Proposal 3 requires that a minimum 25 percent of Michigan’s electricity come from clean renewable sources including wind, solar, biomass and hydropower by 2025.

The proposal explicitly states that utilities cannot raise electricity prices to comply with Proposal 3 by more than 1 percent in any given year. It has been projected that it will cost the average residential ratepayer about 50 cents a month to begin with, but in the long term will save ratepayers money.

2. Why put this in the constitution?


The Michigan Constitution is much different from our federal Constitution. It was designed to be a living document that reflects our values, and is designed to change with the times. That’s why it requires we vote every 16 years on whether to hold a convention to rewrite it.

There have been 69 amendments offered since the latest version was adopted in 1963. The people approved those 32 times and voted against them 37 times. Those amendments have addressed everything from exempting food from sales tax, to the minimum drinking age, to allowing stem cell research. Importantly, the voters always have the final say.

A major advantage of putting 25 by 2025 in the Michigan Constitution is that utilities cannot use their political influence to sway the Legislature and bypass the consumer protection measures, such as the 1% cap on rates on any given year.

Right now, Michigan is locked into outdated and expensive energy sources like coal for our electricity. But the Legislature won’t act because they have sold out to the big oil and coal companies, DTE, Consumers Energy and their lobbyists. The Oakland Press said, “To reject the proposal just because it entails a state constitutional amendment just further empowers wealthy lobbyists like those working for the utility companies.”

3. Why are oil companies involved?


We use a small amount of oil to generate electricity. More importantly to oil companies, we spend over $500 million a year for diesel fuel to move the over 35 million tons of coal from Western states to Michigan to burn in our power plants. So transition to cleaner energy not only makes Michigan more energy independent, it makes the United States less reliant on oil from oversees.

4. What kinds of jobs are expected to be created by Proposal 3?

Proposal 3 specifically states that the legislature should enact incentives to encourage the use of Michigan workers and Michigan made goods. A Michigan State University study determined that Proposal 3 will create at least 74,000 Michigan jobs that can’t be outsourced. Construction jobs account for more than 30,000, and operation and maintenance more than 40,000.

There will be another 40,000 jobs related to manufacturing the parts required to build the renewable energy facilities. With Michigan’s manufacturing talent and know-how, Michigan could capture 50 percent of that manufacturing market, increasing the number of jobs to 94,000.

5. The Care for Michigan group claims that the cost of Proposal 3 will be more than $12 billion and cost families “thousands” of dollars. Is that true?

These claims by the utilities are false. Michigan residents spend over $10 billion each year on electricity. Passage of Proposal 3 will result in investments of around $10.3 billion (CARE inflated that number) in Michigan by the utilities or private investors. Those costs are spread among four million customers and over the 25-year expected life of those assets.

The utilities also fail to subtract avoided costs from their total. For example, we spend $1.5 billion each year to buy imported coal. We’ll keep some of that money here, instead, which is a significant savings to Michigan residents and a significant offset to the renewable energy investment.

The language of Proposal 3 also puts a permanent cap on the cost of compliance with Proposal 3 at no more than 1% per year. Because it is in the Constitution it cannot be bypassed by the utilities or the legislature. That cap would limit the amount any family would pay to about $10 a year. A recent report projects that Proposal 3 will cost about half of that, or about 50 cents a month but will save money in the long term.

6. How can we count on power when the wind doesn’t blow and the sun isn’t shining all the time?

That is not a problem for users because homes and businesses are connected to a regional electric grid that gets electricity from many sources. Existing ‘backup’ generating capacity – both within Michigan and elsewhere on the regional grid – is more than capable of filling short-term gaps in supply. Those other sources will be able to meet our needs when an insufficient amount of Michigan renewable energy is available. There are now five different states (Hawaii, Colorado, Iowa, South Dakota and North Dakota that are already producing more than 20% renewable energy. Grid operators in those states have had no trouble managing the variable load. As more and more renewable resources are added to the grid, the less variable they become overall.

7. Do we have enough wind and land to meet 25 by 2025?

Yes, and more. Michigan needs to build only 4,600 megawatts of electricity generation capacity from renewable energy. According to the National Renewable Energy Laboratory, Michigan needs to harness just 8% of the more than 54,000 MW of high-quality, land-based wind generation potential of the state. Michigan also has more sunny days than Germany, one of the world’s leading producers of solar energy.

8. How much renewable energy does Michigan currently use?

Michigan currently gets just 3.9 percent of its electricity from renewable sources. Meanwhile other states are moving ahead, including Iowa, whose renewable energy use is at 23 percent, and Illinois, whose 25 percent by 2025 goal is saving businesses and families there $176 million, according to the Illinois Power Agency. Michigan currently gets 60 percent of its electricity from coal, all of which is imported from other states. Just to purchase coal, Michigan sends $1.5 billion a year – and the jobs it creates – to other states.

9. How will this improve public health?

Using more wind and solar energy will reduce pollution and give Michigan cleaner and healthier air and water. The dirty coal plants that provide 60 percent of Michigan’s electricity emit dangerous levels of mercury, sulfur dioxide and arsenic, which are linked to heart disease, childhood asthma, lung disease and premature death. That exacts a terrible emotional toll on families, and a financial toll that is reflected in higher health insurance premiums and medical costs. The Michigan Nurses Association endorses Proposal 3 because our children deserve a cleaner Michigan.

10. Are DTE residential customers treated differently?

DTE residential customers are currently paying $3 a month for renewable energy surcharge, but should only be paying $1.60 a month based on how much power they use (36% of the power, and paying 69% of the surcharge). Consumers Energy residential customers only pay 52 cents a month. Proposal 3 would eliminate the current system of per meter surcharges that creates this unfair treatment, immediately lowering the bills of DTE residential customers.

11. Why aren’t the utilities supporting Proposal 3?

For them it comes down to money and control. They make more money burning coal and want to continue to do so even though Michigan families are paying huge rate increases caused in part by the rising prices of coal delivered to Michigan. That cost has increased 71 percent in the last four years, Coal pollution also contributes to asthma attacks, respiratory illnesses and premature heart attacks. They oppose this ballot measure because they cannot control the voters like they are able to control the legislature.

12. Critics claim that Proposal 3 is not flexible enough. Is that true?

If Proposal 3 passes the legislature will pass implementing language to set the timeline for utilities to transition from the 10% currently required to the 25% which will be required by 2025. That timeline will be set with input from all interested parties. They are also required to establish incentives for Michigan workers and Michigan made parts and components to the renewable energy facilities used. If utilities have trouble meeting the interim standards the legislature will be able to change them. Under Proposal 3 if the costs are too high, utilities will be given longer to meet the standard to keep any potential increase in rates below 1%.

The proposal also leaves 75% of Michigan’s electric generation open-ended, giving utilities and regulators a relatively free hand at planning the new generation sources that we will need.

For More Information

Copies of the reports can be found at:

Jobs: http://www.environmentalcouncil.org/mecReports/MSU_Jobs_Report_25x25.pdf.

Costs: http://www.environmentalcouncil.org/mecReports/25by2025-ImpactonUtilityRates.pdf

If you have more questions see: MIEnergyMIJobs.com

Prepared by and paid for with regulated funds by the Michigan Environmental Council.

Further questions can be emailed to: james@environmentalcouncil.org
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