Study: Energy Reforms Could Cost Ratepayers Over $100 Monthly

The energy reforms that moved through the Legislature on Wednesday would cost the average ratepayer more than $100 a month over the next 27 years. That’s according to a modeling study conducted by a Minnesota-based free-market think tank, which plans to publish its findings by the end of the month.

The modeling found that building the necessary turbines, solar panels, storage batteries, and related infrastructure, including wires, poles, and related equipment, would cost Michigan ratepayers a total of $200 billion through 2050. This would also result in 61 hours of blackouts per year, due to the intermittent nature of renewable energy sources.

Costs Rise Sharply Under 100% Wind, Solar, and Battery Scenario

If the policy moves entirely to wind, solar, and battery storage, the cost estimate rises to $380 billion through 2050. That would average $2,746 a year, or $228 a month in added costs for ratepayers, according to the Center of the American Experiment (CAE), which has performed similar studies in Minnesota, Wisconsin, Colorado, and other states.

“You Can’t Do Net Zero on the Cheap”

“You can’t do net zero on the cheap,” said Jason Hayes, environmental advisor for the Mackinac Center, who worked with CAE on the study. “It’s the capital expenditure, the utility profits, the taxes, the operation, the maintenance. It all adds up.”

Hayes explained that much of the cost stems from rebuilding the energy grid almost from scratch. Instead of relying on a few central plants to provide a heavy energy baseload, solar and wind farms would need to be spread out across the state, with the hope that the sun shines or the wind blows somewhere at any given time.

Overbuilding and Land Use Add to the Challenge

Utilities would need to compensate for this unpredictability by overbuilding solar and wind capacity, Hayes said. That would require spreading even more high-voltage lines across large areas of land.

Before the Palisades Nuclear Power Plant shut down in 2021, it produced more electricity than all of Michigan’s wind and solar combined, according to Hayes.

Bringing nuclear power into the grid to add stability, as the package calls for, is critical for reliability, he said. Today’s battery storage can only handle a finite amount of power.  

“When the battery dies, good luck,” Hayes said. “You sit in the dark. There’s no escaping it.”  

The business community debated the presumed high price tag of switching from burning fossil fuels in a few select locations to a more dispersed energy generation structure.  

“By severely limiting the resources our state can use to meet our energy needs over just a few years and giving state bureaucrats unprecedented power to shift costs onto energy customers, the legislation could have dire consequences for job providers and residents alike,” said Mike Alaimo, the Michigan Chamber of Commerce’s environmental and energy affairs director.