Lowell Light & Power’s Renewable Energy Plan
By Justin Tiemeyer - Contributing Writer
30 Nov. 2024
On Tuesday, November 28, 2023, Michigan Governor, Gretchen Whitmer, signed into effect Public Act 235, which sets a renewable energy standard of 50 percent by 2030 and 60 percent by 2035. The legislation also requires an electric provider to file a renewable energy plan by Tuesday, February 25, 2025,with details on how it expects to comply with the standard.
Charlie West is the General Manager of Lowell Light & Power. “We have a good head start,” West said. West noted that Lowell Light & Power has been aggressive with its adoption of renewable energy sources. However, during his interview with the Lowell Ledger, West spent a decent amount of time qualifying what he means by “aggressive.” The utility has not been aggressive in the sense that they are sinking big financial resources into building local solar and wind farms that will not generate a single kilowatt-hour of electricity for another seven to ten years. By aggressive, West means that Lowell Light & Power is seeking solutions now, instead of waiting until the deadline. “We’re aggressive within a certain framework that ultimately protects our customers from unnecessary risks,” West said.
West’s explanation of how Lowell Light & Power responded to the requirements of PA 235, and other similar legislation passed by the State of Michigan in 2023, does a surprisingly good job of describing how he sees his responsibility to the people of the utility’s service area. West sees his first responsibility as reliability, which means he needs to keep the power on all of the time, not just when solar panels are generating electricity. It also means that the utility has to have a plan for what happens if scarcity of non-renewable energy leads to exorbitant prices or unavailability. Moreover, he is not making these decisions with only the contents of his own wallet on the line - the consequences of his decision affect the household finances of everyone in the service area - nor is he making decisions all by himself. “We are governed by five members of our community,” West said. “We are ultimately regulated by our own customers through our board.”
Going into the conversation with West, it seemed likely that he would discuss these solar panels, those wind turbines, and that hydroelectric dam, but the utility’s power supply is much more complicated than that. If the expectation of strictly local-owned, local-generated power is compared to a day trader speculating hour-by-hour on the stock exchange, Lowell Light & Power’s actual approach could be compared to index funds like those made available to the public by the Vanguard Group. In the former case, you can make it big if you have the right people and the right circumstances, but the amount of risk you absorb is significant. To keep the risk from falling on the ratepayers, Lowell Light & Power secures all of its power through a joint action agency called Michigan Public Power Agency, which uses economies of scale to get the best deals on a vast portfolio of electricity options.
To meet the requirements of PA 235, Lowell Light & Power has layered renewable contracts into its power portfolio. These may include solar, wind, and hydroelectric, as you might expect, but state law also allows for nuclear, high-efficiency natural gas, and even landfill gas recapture. On the surface, the latter seems problematic, as if we are giving people license to produce more and more trash, but ultimately this is a way to repurpose landfills. “It’s better than the alternative,” West said. “Instead of flaring it off into the atmosphere, it’s run through a diesel generator. And it’s there. We’re not going to stop producing trash.”
Customers sometimes ask West how they can make sure the power that runs to their house comes mostly from renewable sources, and unfortunately, because of the complexity of tracing an electron’s movement through an absolutely enormous grid, it is just not possible to determine where one household’s electricity, at a specific moment in time, is coming from. Michigan is part of the mid-intercontinental system operator, or MISO, which also includes US states: Montana, North Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Indiana, Illinois, Missouri, Kentucky, Arkansas, Mississippi, Louisiana, and Texas, and the Canadian province of Manitoba. Since electricity travels along the grid at speeds nearing the speed of light, an electron can travel from Grand Isle, Louisiana to Manitoba’s border with Nunavut, in the blink of an eye. Your electricity could be coming from any point in-between.
It is better, and far easier, to determine whether or not your money is going toward renewable energy sources. This is done using renewable energy credits, or RECs. An electric utility receives 1 REC for every 100 kilowatt-hours of renewable energy, and the utility is only said to meet the state’s requirements when these RECs are retired. “We’ve historically only retired 15 percent of our RECs,” West said. “We’ve maintained a bank of renewable energy credits.”
The legislation may seem convoluted at times, and its imperatives might have forced electric companies to add more renewable energy contracts into their portfolios before they were ready, but with the wisdom of the utility’s staff and the leadership of its board, Lowell Light & Power has been able to stay ahead of the curve and guarantee that they can meet state minimums without negatively affecting the price passed down to the ratepayers.
