News Story

Industrial Wind Farms Bring Political Conflict, Recalls and Lawsuit to Township

State’s renewable mandate also bringing hundreds of new turbine towers

A legal battle over a proposed wind farm of 63 turbines is brewing in a small community in the Thumb area of Michigan.

Members of the Juniata Township planning commission voted to approve a special land use request by wind turbine supplier NextEra Energy Resources. Subsequently, a group of residents asked the township board to adopt a moratorium on wind farm developments so the community could revise a wind zoning ordinance adopted in 2010.

When the board refused, residents gathered enough signatures to recall three of its five members. A fourth board member was targeted for a recall, but the Tuscola County election board rejected the petition language.

Garrett Tetil, one of the leaders of the recall effort, told Michigan Capitol Confidential he will likely sue the township over the special land use permit.

Some communities welcome wind farm developments, but in others, proposals for wind farms have led to legal and political strife.

According to state law, local zoning ordinances must protect the “health, safety, and welfare” of residents, but communities can’t create “exclusionary zoning” ordinances that effectively ban an otherwise legal activity.

Some wind farm developers have sued communities, contending that their zoning ordinance is too restrictive. Their lawsuits are not always successful, and in 2017 a U.S. District Court judge ruled that a moratorium on further wind development can be permissible in some situations.

If NextEra is successful in getting the wind farm approved, Juniata Township would see 31 wind towers erected, 486 feet tall from base to blade tip. Neighboring Fairgrove Township, which gave its approval last fall, would see 32, according to a report from MLive. The project, spread over the two townships, would be the third wind farm developed by NextEra in the county.

DTE Energy, which already purchases electricity from two NextEra wind farms in the county, plans to add 4,000 megawatts in renewable capacity over the next few decades. While DTE says it plans to get that capacity from a number of different sources, a conservative estimate is that it will need hundreds of additional wind turbines to hit that goal. Wind turbines from General Electric produce between 1.7 to 4.8 megawatts.

"The 4000MW of renewable energy we will add to our portfolio will be a combination of wind and solar. It is premature to speculate on how much of each we will build and what capacity may be for future wind turbines or solar arrays," said Cindy Hecht, a spokesperson at DTE Energy.

In 2008, then-Gov. Jennifer Granholm signed legislation creating a mandate called the “renewable energy portfolio standard” that requires the state to get 10 percent of its electricity from renewable sources by 2015. In 2016, Gov. Rick Snyder signed legislation mandating the state get 15 percent of its energy from renewables by 2021.

Wind turbines accounted for about 53 percent of renewable energy generated in Michigan in 2016, according to the Energy Information Administration.

“We do have landowners who have signed onto the project and sufficient land to be able to build this project,” Bryan Garner, manager of communications for Florida-based NextEra, told MLive. “We would hope to bring the project online by the end of 2018.”

The dispute in Juniata Township began in Nov. 2017 when officials received a special land use permit request from NextEra Energy. The township sent out a notice to residents notifying them of the request, as well as an upcoming meeting covering the permit.

Tetil was shocked when he received the notice of the request because, he said, he believed that the township was too close to the Tuscola Area Airport for any wind turbines to be constructed.

When the township board failed to approve a wind turbine moratorium, Tetil hired an attorney. He said he believes the township’s wind ordinance does not require adequate property-line setbacks or noise limits for wind turbines. The current zoning requires a setback of 1 to 1.5 times the height of the tower and sound levels to not exceed 65 decibels. Nearby Huron County limits noise levels from turbines to an average of 50 decibels from 7 a.m. to 10 p.m. and 45 decibels the rest of the day.

According to the Michigan Public Service Commission, a majority of the state’s wind developments are in the Thumb region. Huron County has the most wind developments in the state and Tuscola County has the second most.

NextEra Energy did not respond to an and email and phone call requesting comment. Juniata Township Clerk Heidi Stark declined a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

Commentary

Michigan Is Not a Windy State

The true cost of wind in Michigan is beginning to become clear

Michigan is not a windy state, but you wouldn’t know it from the actions of state regulators. Michigan’s Legislature has favored the wind industry, mandating that an increased portion of energy produced in the state must come from wind. These mandates are typically advanced under the assumption that energy produced by wind will eventually become competitive on price. That seemed true for a while, but lately wind energy prices have been stuck in neutral or even started to increase in Michigan. Unfortunately, it seems unlikely prices will improve with protective federal tax provisions being phased out and with the best locations for wind farms already occupied.

A key aspect of Michigan energy policy is the renewable energy mandate. First enacted as Public Act 295 in 2008, the law required electric utilities to ensure that 10 percent of their retail electricity sales are sourced from renewable options. That mandate was expanded in December 2016 by Public Act 342, which requires utilities to obtain 15 percent of their electricity from renewable sources by 2021.

Today, the majority of renewable generation in Michigan is provided by wind and biomass sources, which — according to the Energy Information Administration — provide approximately 53 and 28 percent of Michigan’s renewable energy, respectively. Hydroelectric provides almost 18 percent and solar provides less than 1 percent.

The renewable energy mandate has been responsible for much of Michigan’s interest in expanding wind power. When combined with the generous federal subsidies, there has been significant artificial incentives to build wind generation facilities. Michigan taxpayers and residents pay for these policies and this development through federal taxes and renewable energy surcharges on monthly electric bills.

Energy experts always expected renewable energy costs to start out high; advocates argued that this was a relatively new industry that needed to get its feet under itself. But ratepayers were assured that early economic and policy support wouldn't be needed for long. Once sufficient experience was gained building and operating wind installations, energy produced by wind would drop in price and begin to outcompete other options.

Initially, those predictions appeared correct. From 2010 to 2012, contract prices of utility wind projects dropped substantially. But, in Michigan, price decreases stalled for four years and, in 2016, they actually increased. A recent wind contract — for the Pine River wind park near Alma — compounded price issues. This contract, one of the most expensive wind contracts signed in the U.S. in 2016, actually pushes Michigan wind prices back up to almost $60 per megawatt-hour.

To put this price in perspective, the investment group Lazard annually reports on the levelized cost of electricity. Their 2017 report describes expected market prices for wind of $30 to $60/MWh. Contract prices in Iowa and Oklahoma are as low as $20 per MWh, one third the price of wind in Michigan.

Michigan Weighted Average Wind Contract Cost Comparison Prices ($/MWh) Source: 2017 PA. 295 report.

The differences in price exist largely because the best wind resources in Michigan would be considered some of the worst wind in Iowa. Wind speed maps demonstrate this reality and show that the only areas in Michigan with wind speeds comparable to interior states like Iowa and Oklahoma are in the middle of the Great Lakes. But building offshore wind turbines is both unpopular and significantly more expensive.

Source.

Utilities and wind developers know where to find the best onshore wind resources, and that’s why Michigan’s wind farms were preferentially located in Huron, Tuscola and Sanilac counties. Michigan’s remaining counties have average wind speeds at the low end of wind resources found across the nation.

The Michigan Public Service Commission, the state office charged with overseeing Michigan’s electricity system, added to these challenges with its September 2017 ruling. Starting in 2022, a minimum percentage of electricity used in Michigan will need to be produced in Michigan – something called a local clearing requirement. That ruling may force Michigan residents to buy $60/MWh wind energy that is produced in Michigan instead of the $20/MWh wind energy being produced in other states.

Expanding wind development in Michigan is becoming an increasingly expensive proposition for Michigan residents. If wind energy were not subsidized and not mandated, but still made economic sense given wind resources and market conditions, there would be reason to celebrate the growth of this industry in Michigan.

It increasingly appears that wind energy is produced in Michigan only because politicians are forcing it into the system. High contract prices are obviously attractive to utilities and wind developers. But the costs of this policy are being passed off to ratepayers and taxpayers. The numbers are not adding up for more wind development in Michigan, so it’s time for legislators to reconsider the state’s renewable energy mandates.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.