Nearly one year ago, the state of Michigan passed a series of energy-related legislation that many are calling transformational. In February 2024, Public Act 235 (PA235) became law.
There are many facets to PA235 with the largest component requiring that all utilities in the state of Michigan conform to both a renewable and clean energy performance standard over the next 15 years on a graduated scale.
- 2030: The first milestone requires Cloverland to be 50% renewable by 2030. Renewable resources are essentially defined as energy from solar, wind, hydroelectric, and specific forms of biomass. With both our hydroelectric facility and the U.S. Army Corps of Engineers’ hydro at the Soo Locks, we can meet this obligation relatively easily compared to most utilities. However, water restrictions can cause this number to be borderline during certain conditions.
- The bill also sets an energy storage standard of 2,500 MW by 2030 to support the gaps that intermittent renewable resources create. The storage requirement is applicable only to utilities that are regulated by Michigan’s Public Service Commission (MPSC).
- 2035 to 2039: The next milestone requires Cloverland to be 60% renewable. Again, from Cloverland’s perspective, this can be achieved with proper planning and budgeting. Cloverland must conform to the Clean Energy Standard of the act in which 80% of our energy must be from clean energy systems from renewable resources or 60% renewable with the balance from either nuclear or carbon sequestered natural gas generation (neither of which are considered commercially available today).
- 2040 and beyond: The last milestone requires Cloverland to meet 100% of
its members’ requirements with clean energy systems that would be either 100%renewable or 60% renewable generation and 40% from clean generation resources.
If this sounds complex, you are not alone. Since PA235 became law, Cloverland has been working with state officials to better understand its language and how it will apply to our cooperative. The state recognized that the Upper Peninsula had challenges in the past and that the MPSC would perform a study to review the Reciprocating Internal Combustion Engines (RICE) used to manage our diverse needs. Cloverland has been in discussions with the MPSC, the attorney general, and our state officials to determine what can be done to minimize the financial impact this legislation will have on our rates.
Over the next few years, Cloverland will look to leverage state and federal funding to move towards these requirements. As we better understand PA 235, we will continue to provide updates on how it will impact our cooperative. We want our membership to know the steps we are taking to provide exceptional services through the generation and safe delivery of reliable and affordable energy solutions.
Additional CEO Updates:
- Cloverland is working through its next capital work plan and expects to have approval by year end (for details, check out the “Infrastructure Spotlight” in the January|February 2024 Connections). The co-op is working with RUS to ensure all proposed projects have required documentation to avoid any unnecessary delays in funding. The finance team is monitoring cash flow to determine if funds need to be drawn prior to the deadline from the previous work plan to cover any potential gaps.
- Attorney General Dana Nessel visited Cloverland’s hydro plant on Saturday, June 15. Mike Heise had a productive roundtable discussion with Attorney General Nessel and her team about Michigan’s new energy regulations.
- Pickford Township invited Cloverland to be part of their planning meeting. They reviewed and approved Heritage Renewable Energy’s request to add 2 MW of solar to the current facility. This project will flow back to the MISO market since Cloverland cannot take additional capacity until the Wisconsin Electric Power Company purchased power contract ends in 2029. For details on Heritage Renewable Energy, review “The Power of UP Sunshine” from the September|October 2022 Connections.
- Cloverland is conducting a facility review to assess the current condition of all co-op buildings and the projected needs for additional equipment storage across all five divisions and additional office space.