Energy Efficiency’s Role in the MI Healthy Climate Plan

Flushing, MI shoreline

Released by the Whitmer administration on April 21, the MI Healthy Climate Plan puts forth strategies for Michigan to reach carbon neutrality by 2050 while providing benchmarks along the way. The plan sets the following objectives: 

  • Mitigate the worst impacts of climate change 
  • Spur and capture economic development and create good-paying jobs 
  • Protect and improve the health of Michiganders 
  • Position Michigan as a leader in climate action 
  • Protect Michigan’s natural resources and wildlife 
  • Make Michigan energy independent 
  • Address environmental injustices 

The plan is proudly “uniquely Michigan,” the state’s Department of Environment, Great Lakes and Energy (EGLE) Director Liesl Eichler Clark points out in a Michigan Economic Development Corporation press release. “It was shaped by a multitude of Michiganders with varied perspectives on climate change,” she says. This process started with Executive Order 2020-182, which called for a council composed of individuals representing various sectors and communities throughout the state. Harnessing this diversity of experiences and expertise ensures that Michigan pursues and achieves its carbon neutrality goals as effectively and equitably as possible. The Council was assisted by six advisory workgroups that each submitted recommendations to the Council to consider as they advised EGLE in the creation of the MI Healthy Climate Plan: 

  1. Buildings and Housing 
  2. Energy Intensive Industries 
  3. Energy Production, Transmission, Distribution and Storage 
  4. Materials Decarbonization 
  5. Natural Working Lands and Forest Products 
  6. Transportation and Mobility 

The incorporation of stakeholder perspectives aided in the final design of the plan. There is emphasis on statewide collaboration across public and private sectors to deliver clean air, water and healthy, affordable local food to all Michiganders. Additionally, there is a focus on creating good-paying jobs across the transitioning economy. 

The plan specifically acknowledges energy efficiency as a vital tool for Michigan’s highest energy-using sectors to reduce GHG emissions while keeping energy costs reasonable. Efficiency as a valuable supply-side resource has a history in Michigan. Called energy waste reduction (EWR) in the state, its history traces back to the 2008 energy optimization law, Act 295. This was amended by 2016’s Clean and Renewable Energy and Energy Waste Reduction Law, Acts 341 and 342. The 2016 law updated portions of the gas and electric EWR programs and created new requirements. For electric and gas providers, the law requires continued annual energy savings reductions, based on total annual retail sales of the prior year, of 1% per year for electric providers and 0.75% per year for gas providers. The MI Healthy Climate plan builds on the importance of statewide EWR and identifies areas within the plan’s pillars where this resource can be of continued value: 

  • Clean the Electric Grid
    • Affordability and energy burden – Limit energy burden from powering and heating homes to not more than 6 percent of annual income for low-income households. Increase affordability of utility services through expanded “Percent of Income Pilot Programs” and through minimum allocation levels for utility investment in low-income energy efficiency programs.
  • Repair and Decarbonize Homes and Businesses
    • Heating Michigan homes and businesses – Reduce emissions related to heating Michigan homes and businesses 17% by 2030. Focus on both public and private-sector investments and targeted efficiency and assistance programs to reduce the energy burden for low-income residents.
    • Energy waste reduction programs – Increase utilization of cost-effective opportunities to reduce energy waste. Achieve at least 2% of annual electric energy efficiency savings by increasing the current energy waste reduction target for electric utilities and maintaining the corresponding incentives for exceeding statutory minimums. Restore the energy waste reduction target for municipal and cooperative electric utilities. Increase energy waste reduction for natural gas utilities to a minimum of 1.5% annual savings with enhanced cost-effective incentives for exceeding statutory minimums. Work to ensure energy efficiency is on a level playing field with supply-side resources in the MPSC integrated resource planning process which guides the financial investments of Michigan utilities. Explore additional pathways to reduce energy demand and energy burden.
  • Drive Clean Innovation in Industry
    • Clean industry process improvements – Provide incentives and technical assistance to advance energy efficiency and other improvements necessary to achieve carbon neutrality in the industrial sector by 2050. Deploy combined heat and power in new facilities and convert existing facilities to renewable energy or lower-carbon fuels.

The MI Healthy Climate Plan builds off existing PSC energy waste reduction workgroups and the MI Power Grid initiative, a statewide initiative launched in October 2019 to streamline and develop deeper understanding of utility regulatory processes and resultantly maximize the benefits of the transition to clean, distributed energy resources for Michigan residents and businesses. Knowledge-building has primarily been centered on customer engagement, technology and grid optimization. PSC staff lead workgroups on each of these emerging issues in attempt to incorporate what is learned into regulatory processes. 

The ongoing efforts to tackle the climate crisis in Michigan have positioned the state as a regional leader exemplifying possible avenues of action for other states. MEEA appreciates the incorporation of energy efficiency in the MI Healthy Climate Plan. The plan notes, “for every $1 invested in reducing energy waste in our homes – through more efficient windows, lighting and other energy-saving technologies – homeowners save more than $3.20 in reduced future energy bills.” Between the MI Healthy Climate Plan, MI Power Grid and the EWR Collaboratives, the state is well positioned to continue to value energy efficiency. MEEA looks forward to assisting Michigan in implementing the MI Healthy Climate Plan and continuing to support EWR.

If you have any questions, please reach out to Michigan state leads, Maddie Wazowicz or Amanda Caloras.