September 2024

Data Center Legislation Highlights New Realities
Acknowledging the big demand shift
 

The Michigan House of Representatives met for exactly one day during the entire month of September. On that day, the House took up a two-bill package to provide “tax incentives” for big tech companies to build large “data centers” in Michigan. The bills have become controversial not only for the debate over giving “tax breaks” to profitable companies like Google, Microsoft and Meta, but because of the amount of energy and water data centers use to power and cool their digital equipment. One data center can use as much electricity as a city of 10,000+ people.

The House managed to seek out the minimum votes on the first bill to provide a use tax incentive, but then things fell apart on the second bill creating a sales tax incentive – action on that bill was tabled. Building multiple data centers would require adding more generation capacity. Will the tech companies or other ratepayers foot that bill? Clean energy advocates want some commitments that new power sources will keep the state on track for its carbon reduction goals; but renewables can’t yet meet the 24/7 demands of this industry, so are new gas plants in store?

The debate over data centers points to an important new reality. Projections from just 2 years ago about energy demand are no longer valid. The post-Covid efforts to onshore supply chains and manufacturing, EV growth, and data centers mean gird resources and planning must be substantially recalibrated. We’re likely to see more energy-related “conflicts” like this in the future.

Palisades Price Tag Keeps Rising
Federal government offers rural co-op subsidies

MICEF is a strong supporter of nuclear energy playing key role in our energy portfolio, including the effort to bring Michigan’s closed Palisades plant back online. Hopefully, the latest announcements of federal subsidies will be the last needed to make Palisades operational. The State of Michigan has directly provided $300 million. In March, the Federal Department of Energy offered a $1.52 billion loan, which does have to be paid back. In September, the Department of Agriculture announced grants to two rural electric cooperative utilities, Wolverine in Michigan and Hoosier Energy in Indiana, to purchase power from Palisades and reduce the price impact for their customers.  Those subsidies total $1.275 billion. 

On the front end, nuclear energy is expensive compared to renewables or even a new gas plant, but wind and solar also come with subsidies. Applying carbon capture technologies to gas generation to match nuclear’s emission-free profile isn’t feasible yet and will also be expensive. With all of these technologies and financial policies, a straight apples-to-apples comparison isn’t easy. The bottom line is that a diversified energy portfolio is the best means to balance out these differences to provide reliable, affordable and cleaner energy. 

Federal Grants Factor into Hydro Dam Decision
Once-cheap hydropower is now an expensive challenge

 
MICEF has been more than a casual observer of Consumers Energy’s process for dealing with their 13 hydroelectric dams. The dams would require extensive upgrades in order to qualify for relicensing with the Federal Energy Regulatory Commission – to the tune of $1.4 billion. The dams represent only 1% of Consumers’ generation capacity, a mere 131 MW.  Decommissioning the dams, and in many cases removing them, would cost upwards of $700 million. Consumers is trying to resolve the challenge with the least impact on ratepayers. Surrounding communities, however, would anticipate huge community/economic impacts if dams were removed and the impoundments (lakes) behind them disappeared.
 
Earlier this year Consumers put out a request for bids to interested potential buyers and over 40 parties responded. The viable proposals are now going through a next-level review. In September, the U.S. Department of Energy announced $23 million in grants to address safety and maintenance for 19 dams in Michigan, 83% of the funds going to Consumers.

 U.P. Clean Energy Marches On
Tribal community & trail riding investments

Earlier this year we reported on the successful permitting of a 100 MW solar project to be built on a western U.P. abandoned iron mine site, managed by the State Department of Natural Resources. MICEF/Land & Liberty Coalition® was proud to play a role is that siting process. The Bay Mills Indian Community announced it is receiving a federal EPA grant to invest in a $17 million solar facility that will offset all of the energy demand for the tribe’s eastern U.P. Brimley complex. Yes, solar will serve this community well on the shores of Lake Superior.

Meanwhile, sport vehicle maker Polaris has invested in four solar-powered charging stations strategically located along 125 miles of off-road trails near Ontonagon to power their electric ORVs. Polaris is excited to bring this quiet, emission/odor-free, exhilarating recreational experience to the western UP.

MICEF Strategic Planning Session
An ever-evolving mission & strategies
 

MICEF held its fifth biennial strategic planning session in September, building on the tradition of evaluating and evolving MICEF’s mission, roles, and goals. MICEF relies on the expertise and insight of its Leadership Council members at this session to look realistically at how well we’ve performed for the past two years, and what our focus needs to be going forward. 

We were fortunate to have our national organization, Conservative Energy Network, represented by CEO John Szoka and Midwest Director Sarah Spence. Given CEN’s recent growth and maturity, MICEF is looking to merge its organizational operations into the CEN umbrella to better leverage administrative and financial resources. MICEF will remain the name and face of conservative energy advocacy in Michigan as a chapter of CEN.

Seeking Our Next Pischea Fellowship Class

Young conservatives can become energy leaders

We’re in search of our next class of Pischea fellows. Several of our alumni fellows have gone on to careers in the energy world. We’re looking for college upperclassman or graduate students to engage in a research or advocacy project to advance a conservative approach to energy policy. Find details about the Pischea Fellowship on our website at micef.org/pischeafellowship or contact our Program Director, Emily, at epallarito@micef.org