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Michigan Capitol Confidential, a free publication and public service provided by the Mackinac Center for Public Policy, exists because the Center decided that a new tool was needed to compare what politicians say with how they vote.
The need for such exposure was recently confirmed in an indirect fashion when Michigan's energy providers asked the state Public Service Commission to let them increase consumer rates by $658 million. Last September, the state imposed a mandate that these utilities generate more of their power from renewable energy sources, and allowed them to pass the higher costs on to consumers. Passage of this mandate was the top story in the November/December 2008 issue of Michigan Capitol Confidential.
Renewable energy and conservation mandates account for one-third of the pending rate hike request. Attorney General Mike Cox has announced that he will contest the request, but even if he wins this round the new law makes it highly likely that every consumer who flicks on a light switch will eventually be paying more.
Michigan Capitol Confidential exists to tell this kind of story. Specifically, it reported that the new law requires utilities to acquire at least 10 percent of their power from "clean" and "renewable" sources by 2015, even though wind, solar and other "clean and renewable" sources are not economically competitive with traditional power sources, including nuclear, coal and natural gas. Recognizing that the mandate would mean higher costs, the law allows providers to pass along rate hikes of up to $3 more per month for every "residential" customer, $16.58 more for each "commercial secondary" customer, and $187.50 more for every "commercial primary or industrial" customer.
The probability of rate hikes was public knowledge available to every lawmaker before the votes to approve this law. Very likely seeking to protect their constituents from these increases, 34 of 148 lawmakers in the Michigan Legislature — all Republicans — voted against approving the renewable energy mandate. Just as likely, those voting in favor did so because they deemed the added costs a necessary evil to bring about the so-called "green energy" goals.
Unfortunately, there is another kind of viewpoint - dodging accountability and the facts - as expressed by one of the Republicans who voted in favor of the mandate. This state representative has many Capitol Confidential readers in his district. One of them e-mailed our article about the bill to the lawmaker, asking why he voted to approve a law that would lead to electricity rate increases. The reader forwarded a copy of the legislator's reply:
"Yes, I supported requiring a very small portion of our major power grids to contain renewable energy, as long as these renewable energies are cost effective. Currently, it is estimated that 4-6% of our energy comes from renewable sources and the 10% threshold will likely be achieved without this requirement. This requirement may spur some economic and small business growth for wind farmers, solar panel producers, etc..., who sell their power generation to local power companies at little or no additional cost to consumers. However, I did not and will not support massive rate increases for all of the major power companies to finance, build and profit from additional power plants. Our community can simply not afford to cover these huge rate increases during the current economic climate. Whoever stated I supported rate increases is simply incorrect." (Emphasis added.)
(To date, this legislator has not responded to requests from the Center for comment on this issue.)
To repeat, predictions that the renewable mandate would increase power costs were known to all, and the bill explicitly authorizes rate hikes on consumers to pay for them. Indeed, five months before the final vote, the same lawmaker joined a majority of the House of Representatives voting in favor of an earlier version of the measure containing the same 10 percent "renewables" mandate and authorizing the same rate hikes as those that later became the law. At this earlier date, 21 lawmakers — all Republicans — voted against the mandate. (One of them even posted a protest in the House Journal for that day.) The facts about the measure's costs had been revealed in a House Fiscal Agency analysis posted 10 weeks earlier on Feb. 1, 2008.
In case any legislator missed that, Attorney General Mike Cox held a press conference in March of 2008 to denounce this version of the mandate, and rather accurately predicted that a 10 percent renewable standard could soon cost consumers $250 million (very close to the portion of current rate hike request based on the renewables mandate). Media outlets covered this press conference and relayed the attorney general's warnings. Among them was the well-respected MIRS Capitol Capsule newsletter (www.mirsnews.com - subscription required), which is very widely read by full-time state legislators and their staffs.
Further tip-offs came on May 16, 2008, when the Mackinac Center released a policy brief examining details of the various renewable energy mandate proposals then working through the Legislature, and the potential cost increases associated with all of them. The following week Diane S. Katz, one of the authors of the brief, relayed these warnings during two extensive daytime radio interviews: the "Frank Beckmann Show" on WJR AM760 in Detroit, and the "Ron Jolly Show" on WTCM-580 in Traverse City.
By Sept. 18, 2008, the date of the final House vote approving the mandate, there was virtually no way that any lawmaker could not have known that the bill was all but certain to increase electricity rates. They all understood that they faced a choice between two competing values: lower costs for households and job providers vs. energy production they judged to be more "clean" and "renewable."
Sadly, there's traditionally been a third option for legislators — voting one way and then claiming later that the vote meant something entirely different. They've become accustomed to an environment in which no one gives the facts to the folks back home, so this option is the one that many all too frequently employ.
With the publication of Capitol Confidential, that's become more difficult to get away with. Researching and exposing these votes is the mission of this bi-monthly report. As this incident makes clear, it's a publication with a lot of work to do.
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Kenneth M. Braun is senior managing of Michigan Capitol Confidential and a policy analyst at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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