Your electric cooperative will be spending some time in the new session getting to know new legislators and educating them about the cooperatives and our position on various issues.

On Jan. 1, seven new members of the Michigan Senate and 32 new members of the Michigan House of Representatives were sworn in. Several of these “new” members are not necessarily new to Lansing, having served in the Legislature before or worked on the staff of a former legislator. Either way, your electric cooperative will be spending some time in the new session getting to know these new legislators and educating them about the cooperatives and our position on various issues.

While it may take some time to get to know these 39 new members of the Legislature, it won’t take any time for your cooperative’s leaders to understand the issues the cooperative will be facing. The members of the 94th Legislature will be facing many of the issues that legislators have faced for the past several years. The list is long, but of particular interest to your cooperative’s leaders are the following:

Replacement of the Single Business Tax
Last year, the Legislature voted to end the Single Business Tax (SBT) on Dec. 31, 2007, two years earlier than it was scheduled to end. This sets up a reduction in tax revenue to the state of approximately $1.9 billion dollars. Your cooperative is interested in how this issue is addressed because it pays the Single Business Tax—or I should say you pay the Single Business Tax as part of your electric rates. We have seen numerous proposals to replace the SBT. Some are more favorable to your cooperative than others. We don’t want to see the Legislature adopt a replacement tax for the SBT that increases electric rates.

Renewable Energy Issues
Last session, legislators introduced more than a dozen bills promoting the development of renewable energy. Several bills would have mandated that all energy providers meet a percentage of their total energy sales with renewable energy.

Your cooperative is not opposed to renewable energy. Where renewable energy is available and economical, we seek to include it in the power supply mix. In fact, every Michigan electric cooperative has some percentage of their total energy needs met with renewable energy. What concerns us with some of the renewable energy mandate bills that were introduced last session is that they do not take into account existing renewable energy supply or allow for renewable energy purchases from sources outside of Michigan. We understand the need to promote the development of renewable energy in-state, but when none is available, or is available only at a considerable premium, considerations need to be made to avoid significant electric rate increases.

We’ll be actively participating in the renewable energy discussions in the new session, with the goal of balancing the benefits of renewable energy supply with the overall cost impact to you, the member.

Regulation of Electric Cooperatives
Do you know that most states do not regulate electric cooperatives? Do you know that regulation actually costs your cooperative thousands of dollars annually in compliance costs and regulatory fees? Several states allow the members of an electric cooperative to decide by a vote if their cooperative will be regulated by the state or not. Your cooperative is considering asking the Legislature to give you, the member-owner, the option to self-regulate your electric cooperative.

The Development of In-state Base Load Generation
In a few years Michigan will need to add a significant amount of base load generation, which would normally be either coal-fired or nuclear. These are the kind of generation plants that can run 90 percent of the time over the course of a year. They are typically cheaper to run per kilowatt hour than natural gas-fired plants, but take longer to build. Studies done by the Michigan Public Service Commission show that energy efficiency and conservation measures, as well as renewable energy options, cannot meet the expected growth over the next 10 years.

In the new session, we expect the Legislature to consider policies that will affect the construction of the state’s next base load power plant. The cooperatives are concerned that such policies do not lead to higher construction costs or significant delays. We are committed to building the cleanest generation practicable while taking demand and cost into consideration. If your cooperative moves forward with the construction of a power plant, or commits to buying from a plant that’s being built, we want to make sure it is both environmentally sound and economically prudent.

There will undoubtedly be other issues that come up. In any given legislative session you can expect as many as 5,000 bills to be introduced—bills that could affect your electric cooperative and the rates you pay for service. Our legislative mission is to ensure that any changes in law bring a positive benefit to you and your electric cooperative.