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Michigan Senate Threatens to End Net Metering

There is a bill pending in the State Senate that threatens the livelihood of many of our members. SB438 is currently assigned to the Senate Energy and Technology Committee. Hearings were held last week and continue this week.

The worst part of this bill is the section on "Distributed Generation" (the term that is replacing net metering). The net result of the language that appears on page 77 is that a customer must sell all power generated to the utility at essentially the wholesale rate of around 4 cents/kWh and buy it back at the retail rate, which is around 14 cents/kWh. This impacts the profitability of a solar system so much that few would choose to install a system.

John Freeman, one of our board members, has presented testimony at one of the hearings and delivered a letter he drafted and I signed as president of GLREA. What can be done now is for all those who are able to send a letter to one or all of the Senate Committee members making one or more of the following points:

  1. The current net metering system is working well in Michigan. Why change it? The entire section of the bill titled Distributed Generation (which begins on page 71 and goes through page 80) should be deleted from Senate Bill 438.
  1. The bill requires sale of all solar power generated to the utility for the wholesale price of around 4 cents/kWh and the solar customer must then buy the power back at the retail rate around 14 cents/kWh. This results in a return on investment so low that almost no one will install a solar system.
  1. It is very dubious whether non-solar utility customers are subsidizing solar owners (as the utilities claim). The solar power is put on the grid at a time of day when demand is very strong especially in summer. The power put on the grid goes to the next door neighbor and has almost no distribution cost attached to it. If the utility claim regarding cross-subsidization has any truth to it, a study should be done by the MPSC to establish what the subsidization amount is.
  1. Changing the net metering law will kill a fledgling solar industry in Michigan which provides jobs and purchases of materials from Michigan suppliers. The expressed purpose of the bill is to encourage alternative forms of energy, and this change to net metering does just the opposite. It discourages solar investment.
  1. This bill is an attempt by the utilities to kill competition from on-site generation and is designed to accomplish that goal.

A list of the members of the Senate Energy and Technology Committee is below. Their addresses are all the same:

P.O. Box 30036, Lansing, MI 48909-7536.

It would also be a good idea for you to call or email your state senator. You can find your senator at this source: www.senate.michigan.gov then click the "senators" tab

Members of the Senate Energy and Technology Committee:

(All have the same address: P.O. Box 30036, Lansing, MI 48909-7536)

Senator Mike Nofs, Chair, (R)19th District

Senator John Proos, Vice Chair, (R) 21st District

Senator Ken Horn (R) 32nd District

Senator Tonya Schuitmaker (R) 26th District

Senator Joe Hune (R) 22nd District

Mike Shirkey (R) 16th District

Senator Dale Zorn (R) 17th District

Senator Hoon-Yung Hopgood (D) 6th District

David Knezek (D) 5th District

Steven Bieda (D) 9th District

Please take some form of action to defeat this bill. Senators are most influenced by letters, secondly by emails and calls. Everyone who acts has some impact.

Jim Carter

President, GLREA