Renewable Siting and Energy Reform Legislation Pass the House

Posted on November 3, 2023 by John LaMacchia

In the early morning hours, the House was able to pass legislation that would reform Michigan’s energy laws and streamline the siting process for utility scale renewable energy facilities. The passage of this energy legislation has been a priority of the Michigan Legislature this fall. Specifically, HB 5120 and5121 were crafted to make siting easier for utility scale solar and wind energy projects of 50MW and greater. As introduced, these bills would have removed all local control on siting renewable projects from cities, villages, townships, and counties.

Prior to passage, the League testified in opposition to the bills in committee. We explained this issue is not only about the erosion of local control, but also about appropriate land use. We were very clear that the size of utility scale wind and solar projects are not an appropriate, or realistic, land use within cities and villages, and that we should be exempted from the legislation.

To better visualize this, 50MW solar projects often require 500 or more acres of land. The physical space available within cities and villages across Michigan would not support projects of this size, regardless of the bills as introduced requiring all communities to consider them should there be interest by developers. The League argued available land within cities and villages is a finite resource, and we should be able to govern at the local level in the best interest of our residents and each unique community.

Several amendments were adopted during debate on the House floor that addressed issues we raised, and complete preemption of local authority is no longer part of this legislation. Here are some highlights of the changes adopted:

  1. If a city or village has a wind, solar, or energy storage facility that would normally be subject to the provisions of this act, and if energy facility is located entirely within the city or village, the city or village is exempt from this part as it relates to the energy facility. (This is an incredibly important change because in addition to wind and solar, which are unlikely to be entirely within our boundaries, energy storage facilities could be. In that case, local zoning for cities and villages would be protected.)
  2. An electric provider or independent power producer must first seek local approval if the municipality has a “compatible renewable energy ordinance” that does not ban wind, solar, and storage facilities and does not have a more restrictive setback, height, and noise standard than those set by the legislation.
  3. A local government with a compatible ordinance would have to approve or deny the application within four months. The applicant and municipality could agree to extend the initial deadline by four months.
  4. If a local unit of government fails to approve or deny the application within the time allowed, the applicant may submit an application for a certificate to the commission.
  5. If an applicant files an application with the commission, the applicant shall make a 1-time grant to each affected local unit for an amount determined by the commission but not more than $75,000.00 per affected local unit and not more than $150,000.00 in total. Each affected local unit shall deposit the grant in a local intervenor compensation fund to be used to cover costs associated with participation in the contested case proceeding on the application for a certificate.
  6. The applicant for a certificate shall enter into a host community agreement with each affected local unit. The host community agreement shall require that, upon commencement of any operation, the energy facility owner must pay the affected local unit $2,000.00 per megawatt of nameplate capacity located within the affected local unit. The payment shall be used as determined by the affected local unit for police, fire, public safety, or other infrastructure, or for other projects as agreed to by the local unit and the applicant.

These changes represent steps forward towards integrating local control back into this legislation. Throughout this process, we have been able to maintain an open line of communication with the sponsors, other legislators, and many stakeholders. We appreciate those involved taking our concerns seriously and addressing them to the best extent possible. These bills now move onto the Senate for consideration, and we will continue to express the importance of integrating local control within this process.

Beyond the siting of renewable energy facilities, other major changes were made to generation and renewable standards.  Senate Bill 271 pertains to a 15% renewable mandate, which ended in 2021. This would be reinstated and rise to 50% in 2030 and 60% in 2035, when a concurrent 80% “clean energy” requirement would kick in before going to 100% in 2040. Michigan currently has a goal that 35% of electric needs be met through renewable energy and energy waste reduction by 2025.

Electric providers would have to achieve a portfolio of 100% clean or renewable energy. That could include wind, solar, dams, geothermal, biomass, nuclear, and natural gas, if technology is at least 90% effective in capturing and permanently storing carbon dioxide, and potentially other types if allowed by regulators.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at [email protected] or 517-908-0303.

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