Michigan gets an energy overhaul, sets mandate for 100% renewable power by 2040

Michigan State Capitol lit up in the evening.

Utility companies in Michigan will be mandated to use 100% clean energy by 2040 under sweeping energy reform bills signed by Gov. Gretchen Whitmer on Tuesday, Nov. 28.

Climate activists said the legislation would make Michigan a national leader in renewable energy, while some business leaders praised the benefits it will have for the state’s economy.

“Michigan’s clean energy future is bright,” Whitmer said in a statement following the signing of Senate Bills 271, 273, 502, 519 and 277 and House Bills 5120 and 5121 at Detroit’s Eastern Market. “Together, we are fighting for our air, land, and water, improving public health and protecting our precious natural resources for future generations. We are building the future in Michigan.”

Whitmer called for a path to clean energy – renewable power that comes from sun, water or wind – in an August address laying out her policy priorities for the fall.

The main points of the new laws are to create a clean energy mandate and to grant the Michigan Public Service Commission the authority to regulate clean energy projects the same way that it currently regulates other utilities.

Michigan’s utilities will gradually transition to producing all their energy from renewable sources, with a goal of hitting 50% by 2030 and eventually reaching 100% in 2040. Utility providers are required to submit an energy waste reduction plan to the MPSC by Jan.1, 2025, and to include details on plans for efforts such as reducing greenhouse gas emissions.

Lansing-based consulting firm 5 Lakes Energy released a report in August estimating that the clean energy and energy waste reduction requirements could create nearly 160,000 jobs, save residents up to $145 in annual energy costs, and secure $7.8 billion more in federal investments under the Inflation Reduction Act by 2050.

Lead sponsor of Senate Bill 271, state Sen. Erika Geiss, said in the press release issued by Whitmer’s office that the mandate will have positive effects on the health of Michigan’s people and environment.

“By transitioning to clean energy, we can decrease our dependence on fossil fuels and mitigate the harmful effects of our climate crisis,” Geiss said. “There is no Planet B — and it is incumbent upon us to secure a clean energy future that ensures marginalized communities are not continually, disproportionately affected by environmental hazards.”

Under the new laws, utility providers will also have to offer an energy waste reduction program for low-income households, as well as hire a diverse workforce for providers serving more than 50,000 customers. A new Office of Worker and Community Economic Transition created by the legislation will ensure that workers who may not have the needed education or skill sets don’t get left behind during the state’s transition away from fossil fuels. 

The Michigan Public Service Commission will be charged with oversight of the state’s clean energy projects and the creation of guidelines for any proposed site plan. The new laws modify commission regulations too, so that the office can consider climate and equity when deciding how to expand energy production. A farmer will be allowed to receive payment if they lease their land to a developer for the purposes of creating a solar facility as long as certain conditions are met, including that the land can be used for agriculture again once the facility is removed.

“As we approach the climate boundaries of habitable life for humans, Gov. Whitmer’s bill signing represents a historic shift for Michigan in building out wind and solar across the state, and holding big utilities accountable to curtail dangerous pollution,” Denise Keele, executive director of the Michigan Climate Action Network, said in a press release.