Traverse City Record-Eagle

Archive: Saturday

October 27, 2012

Truth Squad: Prop 3 backers stretch

Energy costs will go up either way, for instance

CARE — - Who: Michigan Energy, Michigan Jobs

- Material: TV/Web ads

- Truth Squad call: Foul

Proposal 3 would create as an amendment to the Michigan Constitution a requirement that 25 percent of the state's electrical power come from renewable sources by 2025, with certain caveats.

The primary backers for Prop 3 is Michigan Energy, Michigan Jobs. As of the July reporting date, it had raised $2.2 million, most of it from out of state environmental groups.

The primary opponent isClean Affordable Renewable Energy for Michigan Coalition. As of July, it had raised nearly $6 million, almost all of it from the two major utilities — Consumers and DTE.

Ballot committees will report again to the state on their finances at the end of October.

Questionable statements

"This year, Michigan voters have a choice: Keep burning dirty coal and oil or move Michigan to clean, renewable energy." (Choice)

The choice ad paints Prop 3 as a choice to "keep burning" dirty coal or vote to pass a much cleaner energy system. Problem is, we'll "keep burning" coal and other carbon-based fuels, with or without Prop 3. Coal is Michigan's primary power source. Even if Prop 3 passes, 75 percent of Michigan energy is going to come from coal and other traditional sources. It's misleading to voters to make them think passing this proposal makes Michigan a completely clean energy economy.

"And Proposal 3 protects consumers by prohibiting utility companies from raising rates more than one percent.

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To protect consumers, compliance with the clean renewable electric energy standard shall not cause rates charged by electricity providers to increase by more than 1 percent in any year. Source: Actual Proposal 3 Language, Michigan Dept. of State.'" (Afford)

The verbal claims in the Afford ad, as well as the out-of-context half-quote on the screen of the ad, are highly misleading. In effect, this ad paints Proposal 3 as a consumer protection ballot issue. Proposal 3 actually states that it would "limit to not more than 1 percent per year electric utility rate increases charged to consumers only to achieve compliance with the renewable energy standard" (emphasis added). In other words, utility rates, in general, will continue to be governed by the Public Service Commission process.

The nonpartisan Citizens Research Council of Michigan says in its analysis that "... it is likely that the cost of electricity in Michigan will increase over the next 10 to 12 years with or without adoption of the proposed amendment."

"Studies show renewable energy would reduce the cost of your utility bills." (Afford)

The Afford ad cites a study by the Michigan Environmental Council, a backer of Prop 3, for the cost claim. The report says that by calculating the cost of renewable power based off of recent contracts let in Michigan and subtracting sums saved by reducing the use of fossil fuels and the plants that use them, Prop 3 would result in a neglible cost to residential ratepayers.

Prop 3 opponents hotly contest those calculations.

All of the cost projections are based on many assumptions. But the ad makes no reasonable disclaimer that the proposal "could, based on projections," reduce energy costs. The claim is stated as fact. It's simply not that simple

Even the MEC report touted by Prop 3 proponents presents a two-step process on consumer costs.

First bills go up: "Over the decade of 2016 to 2025, electric rates in Michigan would average 0.5 percent (one-half of 1 percent) higher under the proposed 25 percent renewable energy standard than under the current 10 percebt standard. Between 2016 and 2025, monthly electric bills of a typical residential utility customer would be higher by an average of about 50 cents per month."

Then they would go down: "Proposal 3 would put long-term downward pressure on rates After the initial investments over the first 10 years, renewable assets with zero fuel costs would put downward pressure on rates starting around 2027. By 2030, the higher renewable standard would be saving customers more than 80 cents per month and would continue to do so over the life of the facilities."

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