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U.P. Energy Task Force submits report to Governor’s Office

LANSING — The U.P. Energy Task Force (UPETF) submitted its final energy supply report to Governor Gretchen Whitmer’s office on March 31.

The 61-page report includes 16 recommendations for action by the governor, the state legislature, and state agencies, including solutions to promote enhanced planning and coordination among energy providers; support the transition to cleaner, more advanced energy supplies; expand opportunities for regional economic growth; and advance environmental justice for all U.P. residents. The report also cautions that delivering affordable, reliable, secure, and environmentally sound energy solutions for U.P. families and businesses will not be easy.

The primary purpose of the report is to ensure the state has explored the various factors or situations that contribute to high costs and insecurity for U.P. customers’ energy supply. The task force’s recommendations provide a guideline for actions the state could take to improve affordability, enhance reliability, and promote energy security for U.P. residents.

Recommendation included in the report are:

– Encourage electric providers to participate in an Upper Peninsula-wide electric plan.

– Promote energy waste reduction and broadband expansion.

– Offer residential programs for energy upgrade grants and early purchase of propane.

– Develop renewable energy, energy storage, and electric vehicle charging.

– Examine the rate of disparity between customer classes.

– Create brownfield and state land inventory for energy infrastructure development.

The task force found that while U.P. businesses and residents pay among of the nation’s highest electricity rates and energy supply vulnerabilities, residential rates are four times higher than industrial rates.

Average U.P. industrial rates are over 25% lower than the statewide average. Upper Peninsula Power Company (UPPCO) residential rates are four times higher than industrial rates. Upper Michigan Energy Resources(UMERC) and Ontonagon County REA residential rates are nearly three times higher and Northern States Power Company (NSPCo) residential rates are just under two times higher than industrial rates.

U.P. residents may consume less electricity than the average Michigan household, but many pay higher average rates, the task force found. In fact, residential rates for Bayfield Electric Cooperative, Ontonagon County Rural Electrification Association (REA), UPPCO, and Alger Delta Cooperative are among the 50 highest electric rates for utilities in the continental United States and more than 30% higher than the statewide average.

Task force members reported that 19 different electric utilities serve approximately 190,000 U.P. consumers, with service populations ranging from as few as 69 customers to more than 50,000 customers. They expressed that the patchwork of utility providers, and the disparity in costs between them, present a challenge for the region’s energy system and the ability to achieve other priorities, such as greater energy-efficiency investment, more renewable energy deployment, and affordability.

The task force’s first recommendation, as stated in the report is that the administration should encourage all U.P. electric providers to participate in a region-wide electric plan covering the full U.P. This planning effort should encompass all aspects of the U.P.’s electric supply, including forecasting electricity demand, evaluating generation needs, assessing grid reliability, mapping utility service territories, and identifying opportunities and incentives for collaboration amongst providers.

Gov. Whitmer created the UPETF by Executive Order No. 2019-1, with the tasks of, among other things:

– Assess the U.P.’s overall energy needs and how they are currently being met.

– Formulate alternative solutions for meeting the U.P.’s energy needs, with a focus on security, reliability, affordability, and environmental soundness. This shall include, but is not limited to, alternative means to supply the energy sources currently used by UP residents, and alternatives to those energy sources.

– Identify and evaluate potential changes that could occur to energy supply and distribution in the UP; the economic, environmental, and other impacts of such changes; and the alternatives for meeting the U.P.’s energy needs in response to such change.

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