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Bills Give Farmers More Gas

Agriculture Blog Post
August 18, 2014

Originally published by Michigan Farm News on July 11, 2014; republished with permission.

In May, the House Energy and Technology Committee considered HB 5555, which would make it easier for utility companies and the Michigan Public Service Commission (MPSC) to expand the state's natural gas infrastructure into underserved areas. 

Many areas of the state's agricultural sector have experienced natural gas shortages that have adversely affected the ability of farms and agricultural processing operations to expand and increase production. Too often, farms are at the end of the line when it comes to natural gas service, and capacity is not always adequate. 

House Bill 5555 would make it easier for utilities to expand their infrastructure into unserved or underserved areas. It also establishes an infrastructure cost recovery mechanism that is designed to make it more affordable for local farmers to have gas lines extended to supply their needs. The legislature is still considering these improvements, so if you're having natural gas capacity problems, you may wish to discuss them with your legislator this summer.

On the electric side, the energy efficiency incentives available to farmers and agribusinesses on the Consumers Energy system have increased. 

The MPSC approved a settlement in Consumers' Energy Optimization docket that included increased availability of economic incentives for the installation of variable frequency drives found on agricultural fans and pumps. 

There are also new incentives available for high-efficiency grain dryers and for grain storage temperature and moisture management controls. 

While Michigan's electric rates have been climbing steadily, energy efficiency incentives such as these are one way that farmers can try to control energy costs. Both DTE and Consumers have programs which, if you're not familiar with, may repay investigation. 

Finally, the Governor recently signed Public Act No. 169, which requires the MPSC to open a proceeding to examine cost allocation among utility customer classes and rate design methods. 

In testimony before the House Energy Committee, proponents of the Act said that it was designed to lower energy costs for the largest industrial users to make their rates more competitive with those in neighboring states.  

Unfortunately, a decrease in one customer class's costs must be offset by a corresponding increase in costs to other customers.  

The Act's proponents were quite open about their intention that this rate increase would be timed to take effect in 2015, and so would be masked by the scheduled decrease in bills resulting from the end of securitization charges. These charges can be fairly substantial, especially for those on the Consumers Energy system. 

If you look at your bill, there will likely be line items for securitization charges and securitization taxes.  Depending on the outcome of the upcoming MPSC proceeding, you may lose the reduction in your electricity bill you would otherwise enjoy when these line items are removed in 2015. Again, something you may wish to discuss with your legislators this summer. Remember the adage about squeaky wheels.

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