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2016 New State Energy Law

Senate Bill 437 and 438 passed the Michigan Legislature on December 15 and was signed into law by Governor Snyder on December 28, 2016. This new law is Public Act 341 and 342 and it made changes in multiple areas of Michigan’s energy sector including renewable energy. The following are the key highlights as it pertains to renewable energy:
  • Net Metering Changes. PA 342 changes all references to “net metering” to “distributive generation”. Under Section 6a(14) of PA 341, the Act requires the Michigan Public Service Commission (PSC) to conduct a study and then calculate a tariff “reflecting the equitable cost of service for utility revenue requirements for customers who participate in a distributive generation program.” This energy tariff must be calculated no later than April 27, 2018. This tariff is then implemented when the PSC approves the first general rate revision for a utility after June 1, 2018, which usually takes about 10 months. This effectively extends the current net metering law until April 1, 2019. This tariff could be a charge or a credit depending on how the PSC quantifies the value of solar energy. GLREA will be actively participating in the PSC proceedings to calculate this energy tariff. See below.

  • Grandfathering of Existing Renewable Energy Systems. Section 183 of PA 342 establishes a time limit of 10 years for grandfathering of systems. So current customers and those that install a system prior to the effective date of the tariff (around April 1, 2019) will not pay the tariff and will operate under the current net metering rules until the tariff begins, at which point they can stay under the old net metering rules for 10 years from the date of enrollment or switch to the new tariff.

  • The Renewable Portfolio Standard is increased from 10% to 15% by 2021, with an interim increase of 12.5% by 2019. A goal is also enshrined into law that by 2025, 35% of Michigan’s energy shall be provided by renewable energy or by energy efficiency

GLREA focused primarily on preserving net metering and increasing the renewable portfolio standard. Considering the content of the bills when first introduced and the final language (seven versions later) enacted, the coalition of organizations and business that supported the expansion of renewable energy (that GLREA was a part of) did a remarkable job of educating legislators and applying respectful but firm pressure to get the necessary changes in the final bill language that became law.

If you have questions or would like additional information about PA 341 and 342, please contact GLREA’s Executive Director John Freeman.