U-M’s allies in carbon neutrality effort have cloudy record on clean energy
By its own admission, the University of Michigan uses a lot of energy. This makes getting to a net-zero carbon footprint a tall order, especially given the school’s relatively late arrival to tackling climate change.
University President Mark Schlissel launched a commission on Feb. 4 to develop recommendations for achieving carbon neutrality. Campus climate activists welcomed the commission, which is made up of faculty, students and administrators, as well as local officials and environmentalists.
Engineering junior Logan Vear, president of the Climate Action Movement, supported the creation of the President’s Commission on Carbon Neutrality but worried about conflicts of interest on the body. Vear, who was named to one of the two student spots, expressed concern about the inclusion of Brandon Hofmeister, senior vice president of governmental affairs at CMS Energy and Consumers Energy, as well as Camilo Serna, vice president of corporate strategy at DTE Energy.
“(It was) highly disappointing that DTE and Consumers Energy were given spots on the commission itself instead of potentially in an advisory panel, given their history of fighting against climate policy, their advocating for natural gas expansion and particularly their direct conflict of interest being financially dependent upon U of M,” Vear said.
Serna was previously vice president for strategic planning and policy for Eversource Energy, New England’s largest utility company, and before that, he worked for Oliver Wyman’s Energy & Utilities management consulting practice, advising companies in Europe, Latin America and North America.
He said his experience would offer the commission a valuable perspective.
“I see my role … as being able to provide that industry perspective as to what’s happening in the energy landscape, what’s happening with DTE and how those could be of help to the University in achieving its ultimate goal of achieving carbon neutrality,” Serna said.
The University purchases more than 60 percent of its electricity from DTE. CAM founder Julian Hansen, an LSA junior, said the utilities had a financial stake that could negatively affect the operation of the commission.
“A swift transition to U of M carbon neutrality would most likely decrease this reliance that we have with DTE and therefore that causes DTE and Consumers Energy to have a financial incentive to slow down the transition to carbon neutrality,” Hansen said.
Financial incentives have played a role in power utilities’ responses to clean energy across the country, which have varied from lukewarm to outright opposition. In Michigan, DTE and Consumers Energy have a mixed record on renewables. Both have pledged to get 25 percent of their energy from renewable sources by 2030, with Consumers announcing plans in February 2018 to stop using coal to generate electricity by 2040, by which time DTE plans to retire all of its coal-fired plants.
Hofmeister said the landscape for renewable energy has changed markedly over the last decade.
“The cost declines we’ve seen in renewable energy over time, particularly when we compare with new resources — not necessarily existing — renewables have significantly closed the gap,” Hofmeister said. “I do think that was a historical barrier that renewables faced that I think has become much less so.”
Despite these commitments, environmental groups see room for improvement, taking issue with the utilities’ reliance on fossil fuels.
According to Earthjustice, Consumers Energy’s J.H. Campbell Generating Complex in West Olive is the third-largest source of carbon pollution in Michigan, after DTE’s Monroe and Belle River plants.
In 2017, the U.S. Supreme Court denied DTE’s petition to review an ongoing enforcement action regarding air pollution from the Monroe plant. The Sierra Club and Earthjustice alleged DTE chose not to install pollution control technology even though the utility’s projections showed emissions would increase after DTE overhauled the plant for $65 million in 2010.
According to Shannon Fisk, the managing attorney for Earthjustice’s Coal Program, the Monroe plant has since installed controls, but the Belle River plant has not, and as a result, it continues to emit thousands of tons of pollutants every year.
Fisk said the utilities were part of the reason why clean energy in Michigan was not growing at a faster pace.
“We believe the utilities should be maximizing their use of those things and unfortunately DTE especially seems to be kind of slow-walking their transition to those new clean energy options,” Fisk said. “We would like to see them move much more quickly, which would be both in the best interest of their customers and would help address the looming threat of climate change.”
While Fisk applauded some of Consumers Energy’s efforts, he said it was “unfortunate” the utility planned to continue operating parts of the Campbell plant until 2031, keeping the complex’s largest unit in use until 2040. He also criticized DTE’s construction of a $1 billion natural gas plant in St. Clair County.
State Rep. Yousef Rabhi, D-Ann Arbor, disputed DTE’s claims the plant would help promote sustainability, as natural gas produces harmful emissions and contributes to climate change.
“They’re phasing out carbon-intensive energy production in favor of natural gas plants, which many including myself do not consider clean energy, but they are trying to market it as clean energy,” Rabhi said. “While they are technically reducing carbon emissions, they are increasing emissions from other greenhouse gas emissions that, in the case of methane, for example, are more volatile and damaging than carbon is, so it’s actually not a positive move to go to natural gas.”
Rabhi said both Consumers and DTE have been opposed to a “number of good pieces of legislation” that would have pushed the state in the “right direction in terms of expanding alternative energy and renewable energy.”
In 2018, a bipartisan group of state lawmakers, including Rabhi, introduced a set of bills called the Energy Freedom Package. A variety of environmental groups supported the legislation, arguing it would promote access to renewable energy and reduce barriers to residential solar power production, among other things.
Speaking on behalf of DTE, Serna testified before the state legislature in spring 2018 in opposition to the bills. DTE said it was against the legislation in part because of provisions regarding fair value pricing that would expand policies for net metering, a pricing system that offers solar panel owners credit for any extra energy they produce and send to the grid.
DTE has argued net metering customers — residents who own solar panels and are compensated for returning energy to the grid — are subsidized by other ratepayers, a claim Serna reiterated in his testimony.
Solar activists criticize the talking point as a profit-motivated effort to undermine renewable energy. They disagree with the assertion that net metering increases costs for non-solar customers, arguing instead that solar panels generate power during the day when usage is highest, so they can alleviate the need to invest in costly additional generation capacity to meet peak demand.
A 2016 study from the Brookings Institution confirmed this, finding “net metering is a net benefit” as the practice “frequently benefits all ratepayers when all costs and benefits are accounted for.”
In April 2018, the MPSC replaced net metering with an inflow/outflow system, under which customers with solar panels pay full retail rates for the electricity they use but receive less for the electricity they produce to make up for costs associated with maintaining the grid. Solar advocates said the decision “could kill the state’s distributed solar market in its cradle.”
Serna repeated the claims made in his testimony to The Daily, saying non-solar customers would bear the costs of rooftop solar.
“The main issue with net metering is there are costs that are not being paid by the solar customers that are being shifted to others, so me and all the utilities and other states are looking for different alternatives to address that issue,” Serna said.
Fisk blamed the companies’ reluctance to embrace clean energy on inertia.
“Some of it is that they have large investments in old infrastructure that they still want to charge their customers for, and they get a profit off of having lots of capital in the form of coal plants, gas plants, etc.,” Fisk said. “They’re continuing to try to collect the investment that they’ve made from their customers and that creates an incentive for them to try to keep old coal plants around and to build new gas plants.”
University spokesperson Kim Broekhuizen said the president’s commission sought to include diverse perspectives from various areas of expertise.
“It is absolutely critical for the energy industry to be a part of U-M’s exploration of scalable and transferable solutions given the fact that these companies are the number one energy providers/sources for our region and state,” Broekhuizen said. “In addition, they have each made their own renewables commitment and are engaged in strategy development that will be useful to our own efforts.”
The commission’s first town hall is expected to draw a capacity crowd at Rackham Auditorium on Monday night.