A new study from Utah State University found that, as of 2013, Michigan’s renewable energy mandate, enacted in 2008, has cost families and businesses here a bundle: $15.1 billion overall, or $3,830 per family, compared to what we would have experienced without the mandate.

According to the study, the economies of all states with a renewable portfolio standard, or RPS, have suffered harm. Among the negative effects are a nearly 14 percent decrease in industrial electricity sales, plus losses in both personal income and employment. A key finding was that an estimated 24,369 jobs have been lost in Michigan because of the mandate, which is in effect a mandate for wind energy.

The study concluded: “Our analysis of the legal rules surrounding RPS in Michigan suggests that the regulatory climate is burdensome for both utilities and bureaucracies, making RPS an even worse venture for taxpayers than the tax-based or empirical analyses suggest.”

This week Michigan Capitol Confidential conducted a telephone interview with Utah State University professor Ryan Yonk, one of the investigators who contributed to the study. Some excerpts:

CapCon: What’s the best way to explain how an RPS causes increased costs?

Yonk: An RPS is an example of picking one policy track and going down it. When you do that, you lose the opportunity for lower direct costs on electric rates and investment opportunities because investments are influenced and rearranged by the decisions of central planners instead of the market.

CapCon: When we say RPS, what we’re mostly talking about is wind energy, right?

Yonk: The majority of it is wind. Second would be solar, but the bulk of it is wind. Most states set their RPSs on wind.

CapCon: In Michigan, even though we have a 10 percent wind power mandate, the law did not require that emissions be monitored to see how much emissions are actually being reduced or if emissions are being reduced at all. Is that the way it was done in most other states that set wind power mandates?

Yonk: I can’t speak to that because I’ve never looked into it. What I can say is that very often the benefit claims for these tend to be esoteric; that is to say, they’re all about what’s supposed to happen in the future while disregarding what the effects are now.

CapCon: According to the study, as of 2013 Michigan’s RPS had resulted in a loss of 24,369 jobs in the state. How was that measured?

Yonk: It doesn’t mean that there were 24,369 jobs that just went away. It’s the additional number of jobs that would have been created had the RPS not been enacted. An advantage of the macroeconomic model we use is that it can be applied to multiple states to measure the impact of an RPS on costs, real income and unemployment.

CapCon: Did you notice any elements of Michigan’s RPS or the way it is implemented or regulated that are unique?

Yonk: Not particularly, other than that it’s more rigid in Michigan than in some other states because in Michigan you have a mandate as opposed to some states that only have goals. As a result, it is more of a regulatory burden.

The study was conducted by the Institute of Political Economy at Utah State University, using a model that applies state-specific data and characteristics to the long-term cumulative effects of an RPS policy. These effects include:

• State electricity sales declined by 13. 075 percent.
• Real personal income declined by 3.6 percent.
• Nonfarm employment decreased by 2.8 percent.
• Manufacturing employment decreased by 3.7 percent.
• The unemployment rate was 9.6 percent higher.

All figures are measurements of the difference between the status quo and what the state would have experienced without the mandate.

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See also:

Texas Moves to Dumping Wind Mandate

A Fresh Angle: Taking on 'Big Wind' With Competition

Michigan's Renewable Energy Mandate Causing Harm, Probably Unconstitutional

Though the November 2016 election is 14 months away, the Board of State Canvassers has already approved petition wording for eight potential ballot proposals. The approval is only a preliminary step, but voters could face a crowded ballot in the general election. Here is a glance at the proposals:

Prevailing wage repeal

A well-funded group called Protecting Michigan Taxpayers is collecting signatures for voter-initiated legislation that would repeal the state’s 50-year-old prevailing wage law, which prohibits governments and schools from awarding construction contracts to the lowest bidder unless the contractor pays wages based on regional union pay scales. It is estimated the prevailing wage law costs Michigan taxpayers $224 million annually.

If the pro-repeal group collects the required number of signatures (at least 252,523) the proposal will be presented to the Legislature. If the Legislature then approves it, the measure becomes law with no approval required from the governor. If the Legislature fails to pass the measure, it goes to the voters in the form of a November 2016 ballot issue.

The Legislature could enact its own repeal without the signature campaign, but it is not clear whether Gov. Rick Snyder would sign it.

Meanwhile, a group called Protect Michigan Jobs says it might work to place a proposal on the ballot to preserve or reinstate the prevailing wage, depending on what happens with the repeal effort.

Corporate income tax increase

The union-backed group Citizens for Fair Taxes is seeking a voter-initiated law it calls the Corporate Fair Share of Taxes Act, which would increase the state’s corporate income tax rate from 6 percent to 11 percent. The additional $900 million it is estimated this would extract from business enterprises would be earmarked to road repairs and maintenance.

The only unions currently pushing the proposal are the Michigan Labor District Council, the Operating Engineers and the Michigan Regional Council of Carpenters and Millwrights. Other unions may give their support.

Business groups argue that this proposal would be disastrous for the economy. The Coalition Against Higher Taxes and Special Interest Deals, which spearheaded opposition to the 2012 ballot proposal that would have enshrined collective bargaining in the Michigan Constitution, is preparing to lead the fight against this proposal if it gets on the ballot.

Sick time mandate

The group Raise Michigan is promoting an earned sick time act, which would mandate a paid leave policy that all employers would have to adopt unless they chose to provide even more generous benefits. Raise Michigan was behind last year’s campaign to raise the state’s minimum wage.

So far this proposal has shown no signs of having sponsors with deep pockets, but it could end up drawing large amounts of funding from Washington, D.C. interests.

Fracking ban

Fracking, which is short for hydraulic fracturing, is a process for extracting oil and natural gas by injecting water, sand and chemicals at high pressure into shale rock below the earth’s surface. The Committee to Ban Fracking in Michigan insists that its measure would only affect fracking that involves horizontal wellbores. That type of fracking, however, is one of the techniques that has led to the natural gas revolution. The same group failed in a previous ballot campaign. So far it has attracted relatively little financial support, but the reaction of those opposing the proposal indicates they are taking it very seriously.

Marijuana legalization with state control

The Michigan Cannabis Coalition has a relatively well-financed proposal to promote a Michigan Cannabis Control and Revenue Act, which would legalize the recreational use and cultivation of marijuana by individuals 21 years of age and older. The proposal would also make the sale of marijuana taxable and create a new state authority, the Michigan Cannabis Control Board.

Marijuana legalization with local control

The Michigan Comprehensive Cannabis Law Reform Committee is fielding a different proposal, called MILegalize. It, too, would legalize the recreational use and cultivation of marijuana by people 21 years of age and older. But local governments, rather than the state, would be given regulatory authority. The proposal specifies that marijuana sales would be subject to a 10-percent excise tax and earmarks how those revenues would be allocated.

Medical service price controls

The Stop Overcharging initiative would create a Fair Medical Prices for Consumers Act, which would impose a limit on how much health care providers could charge consumers. Specifically, a doctor’s office or hospital would be prohibited from charging a person more than 1.5 times the amount it accepts from another health care payer for the same service. The impetus for this proposal comes primarily from health care providers charging higher prices for goods and services provided to patients under Michigan’s unique auto insurance system, which requires motorists carry insurance that includes unlimited personal injury protection benefits (PIP).

This petition drive is on hold, pending possible passage of Senate Bill 248, which would place some limitations on those unlimited benefits. The bill passed the Senate but is stalled in the House.

Mail-only voting

The Let’s Vote Michigan constitutional amendment would change election law so that all elections would be conducted by mail. Voters could also deliver their ballots in person. As a proposal to amend the Michigan Constitution, it requires more valid signatures than the other proposals listed here before it goes to the voters (10 percent of the number cast for governor in the last gubernatorial election, or 315,654). It does not seem to have much financial backing and appears to be the cause of two progressive activists.

A long way to go

The eight proposals mentioned above have cleared one important hurdle. Their backers have secured the state’s approval of the boilerplate language their petition forms include, as well as the layout and design of the forms. (Such an approval is called “as to form.”) Among activists, it is considered a good idea to get approval “as to form” before circulating petitions, lest the signatures be rejected on the grounds that the forms were improperly formatted.

Each of the first seven proposals mentioned here need 252,523 valid signatures collected before June 21, 2016, and the signatures must come within a 180-day period. Because the vote-by-mail proposal would change the constitution, it requires 315,654 valid signatures. If the constitutional amendment garners the required number of valid signatures, it goes on the November 2016 ballot. The other proposals would change state law but not the state constitution. Once one of those proposals secures the number of required signatures, it faces one of two fates. The Legislature may enact it into law within 40 days by a simple majority vote (bypassing the governor). If it does not, the proposal goes to voters for their approval.

The number of potential ballot proposals could increase over the next several months. There has been considerable talk of an effort to establish a graduated income tax in Michigan, but no such proposal has been introduced so far. Such a proposal would be a constitutional amendment.