Light & Power Considers Renewable Energy Goal
By Beth Milligan | May 12, 2018
Following a commitment from Traverse City commissioners to power all city facilities with 100 percent renewable energy by 2020, Traverse City Light & Power (TCL&P) board members Tuesday will consider establishing a similar communitywide goal for their entire customer base.
TCL&P will host a strategic planning session at 11:30am Tuesday at the utility’s service center at 1131 Hastings Street – a meeting that will be led by strategic plan facilitator Hometown Connections and will focus on the utility’s renewable energy portfolio in the coming years. According to TCL&P Executive Director Tim Arends, 12 percent of the utility’s purchased energy currently comes from renewable sources, such as wind and solar. By next January, TCL&P is expected to meet the state requirement that utilities be at 15 percent by 2021.
But board members have expressed interest in going well beyond that figure, including having up to 100 percent of the utility’s power coming from renewable sources. Kate Madigan of the Michigan Environmental Council and Michigan Climate Action Network told board members last week Traverse City would be “the first city in the state to set a 100 percent goal citywide” if it made such a commitment, though 66 cities in 23 different states across the country have already made similar green pledges.
“The 100 percent renewable energy goal set by the city commission received a lot of support in the community, and to get beyond city operations to get to a communitywide goal to include homes and businesses really requires the leadership of our city Light and Power,” Madigan said. “Our state really needs clean energy leaders right now.”
Board members are set to evaluate a range of possible goals for the utility’s purchase of renewable energy in its strategic plan, including having TCL&P’s portfolio consist of 30 percent, 45 percent, 60 percent, and 100 percent renewable energy. Approximately a dozen audience members – including several board members from the Northern Michigan Environmental Action Council (NMEAC) – spoke during public comment at TCL&P’s board meeting last week to encourage the utility to set a 100 percent goal.
“All of us were very proud when the city commission set the 100 percent goal in 2016 – now it’s time for the city-owned utility to set the same goal,” said NMEAC Co-Chair Greg Reisig. “The old arguments that clean (energy) is too expensive are now a thing of the past…clean energy lets us power the world without destroying it.”
Committing to a 100 percent renewable energy portfolio would not be a casual or easy commitment, both Arends and TCL&P board members acknowledge. One of the biggest hurdles to such a pledge is that TCL&P has contractual agreements to purchase coal from both DTE and Consumers Energy. The contracts are “end of plant,” meaning TCL&P is committed to buying coal until the facilities close. While coal is rapidly on the decline, Arends predicts the plants could still remain open until 2030 or 2035. As long as TCL&P is required to purchase coal, it cannot meet a 100 percent renewable energy goal.
That leaves two scenarios for the board: Should TCL&P decide to make a 100 percent renewable energy commitment, it could either pursue its legal options for prematurely terminating its coal contracts, or else set a lengthy timeframe on its goal – for example, becoming 100 percent green by 2040 – that would exceed the lifespan of the coal plants. Alternately, the board could set a lower percentage goal for its renewable energy purchases, reflecting the reality that a portion of its portfolio is committed to coal for potentially a decade or more. City Commissioner Amy Shamroe, who sits on the TCL&P board, says she’d like to see the utility consider a mixture of those approaches.
“I would like to see us have an immediate goal for our portfolio for the next 10-15 years to see if can we have everything but our coal obligation come from renewable energy,” she says. Shamroe continues that the utility could combine that with a longer-term goal that when its coal plants go offline, TCL&P would move toward a 100 percent renewable portfolio.
Arends also notes that TCL&P would want to ensure its energy portfolio is diversified by purchasing renewable power from a range of sources; each individual contract the utility enters into requires careful – sometimes costly – analysis to determine its effect on prices for consumers. “Energy is a commodity, and its price changes hourly,” Arends says. “Every time you look at an agreement, you have to evaluate it on its own merits and the impact it will have on customer rates.”
Shamroe also agrees its key to keep customer rates in mind. If TCL&P's exiting of coal contracts produced a financial penalty so high it caused rates to soar, for example, she wouldn’t support it. “While I absolutely support green energy, I don’t want to do that to residents who are on fixed incomes or living in affordable housing,” she says. “The last thing we want to do is go from having some of the lowest rates in the state to some of the highest. I don’t want to see us sacrificing a lot just to make a bold statement.”
Arends also wants to see the utility set an “achievable” goal for its renewable energy portfolio – whatever the board determines a realistic figure might be. “In my opinion, it’s great to set a goal, but when you set a goal you should have every intent of achieving it,” he says. Still, the executive director acknowledges there is community support for pursuing a 100 percent renewable target. “We don’t have all the information yet on what that would mean for our customer rates, but we know there are people who want it now,” he says. “There are organizations, including large ratepayers, who want more green energy.”