©2018 Michigan Economic Development Corporation

Exploring ways to reduce costs for ‘energy intensive’ industrial users

Friday, March 14, 2014

Frank Provenzano

LANSING, MI – Facing the task of reducing energy costs for energy-intensive industrial customers, a newly formed workgroup aims to identify opportunities to reduce rates for these high-energy users.

“We will draw on knowledge from a range of stakeholders and decision-makers, and come up with recommendations that are cost-effective and reliable for Michigan’s industries,” said Steve Bakkal, director of Michigan Energy Office, who chairs the new work group responsible for drafting non-legislative solutions to establish a more competitive electric-rate structure for energy-intensive companies.

The first meeting will be 8:30 a.m. Monday, March 24, Hearing Room One at the Michigan Public Service commission (MPSC), Lansing. The initial meeting is an informal session to explain the work group process, including how participants will be selected. Members will be chosen from government, utilities and private-sector.

The work group will also meet on several yet-to-be-determined dates through May. One or two subgroups of 10-12 participants from energy-intensive companies, utility companies, and Michigan Public Service Commission staff will develop and evaluate various energy-saving options. In May, a formal report from the work group will be submitted to Governor Rick Snyder, Michigan legislators and Michigan Public Service Commission (MPSC), outlining the various regulatory options to consider.

The workgroup is a result of Gov. Synder’ long-term “no regrets” energy policy, which calls for greater energy efficiency with an emphasis on eliminating energy waste, and replacing coal with newer, cleaner technologies, such as natural gas and renewables by 2025. Governor Snyder’s goal is to ensure that energy-intensive industries in Michigan can better compete while improving the business climate for job and investment decisions beneficial to the state economy.

According to Bakkal, who also serves as senior policy director at the Michigan Economic Development Corporation (MEDC), industrial businesses choose to expand facilities or locate to a state based on several primary cost considerations, including energy expenses, business tax climate along with having access to a skilled workforce. Nearly three-quarters of the members polled recently by the Michigan Manufacturers Association responded that energy costs are a major expense that impacts their company’s performance.

The Michigan Energy Office (MEO) promotes energy efficiency and renewable energy resource development to Michigan's residents, businesses, and public institutions. MEO operates within the Michigan Strategic Fund, a unit of MEDC.

The March 24 meeting is open to the public. Because of space and time limitations, large business groups and associations are encouraged to send representatives in place of members at large.

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