A Framework For Energy In Northwest Michigan

2014 REPORT 1 A Framework for Transportation in planning, and decision-making and adopted goals from local plans Northwest Michigan was prepared as processes, and will help to identify and planning initiatives. Strategies are part of the Framework for Our Future: A the steps a community can take to not intended as recommendations, Regional Prosperity Plan for Northwest address a local issue, if desired. nor do they supersede and local Michigan, a regional resource for local government decision-making. governments, community organizations The Framework for Our Future was Moreover, the Framework is not working to meet local goals. developed by Networks Northwest intended for, nor shall it be used (formerly the Northwest Michigan for, infringing upon or the taking of The Framework was developed with Council of Governments) with input personal property rights enjoyed by support from the US Department and partnerships from a variety of the residents of Northwest Michigan. of Housing and Community community stakeholders and members Rather, the information included in Development’s Office of Economic of the public. An intensive community the Framework is instead intended Resilience and Partnership for outreach process featured a wide to serve as a compilation of best Sustainable Communities, the Michigan variety of opportunities for participation practices to help guide local decision- Department of Transportation, the from the public: events, surveys, focus makers who would like to address the Michigan State Housing Development groups, online forums, and public issues identified in the Framework. Authority, and the State of Michigan discussions were held region-wide Regional Prosperity Initiative, as well as throughout the process. Outreach countless community partners including activities and engagement opportunities members of the public, county included a series of community human service collaborative bodies, dialogues, interviews, and other local units of government, nonprofit events designed to obtain input from organizations, and many others. individuals with disabilities, minorities, youth, those in poverty, and others that A REGIONAL PROSPERITY PLAN The Framework for Our Future includes have historically been underrepresented FOR NORTHWEST LOWER MICHIGAN information and tools that can help in planning processes. Public input stakeholders address issues such was used to identify priority community as housing, transportation, land use, issues and concerns, and to help energy, arts and culture, workforce and develop goals, strategies, and actions. economic development, community health, food and farming systems, The goals, strategies, and actions and natural resources. Data and included in the Framework were built information will help communities upon public input heard throughout supplement their local deliberation, the process, as well as on existing

INTRODUCTION 3 REGIONAL ENERGY PROGRAMS 15 Key Indicators 4 Community Programs 16 In This Report This In Energy Experiences 19 ENERGY USE 5 SUMMARY 22 RESILIENT ENERGY STRATEGIES 6

REGIONAL ENERGY PROFILE 7 Social Equity 8

REGIONAL ENERGY ISSUES 10 Landlord / Tenant Investments 10 Consensus on Local 12 Generation Transmission & Distribution 13

2  A Framework for Energy: Introduction

The Northwest Michigan Regional Energy Plan is a component of the Framework for Our Future: Tools and Strategies for Supporting the Grand Vision, a planning resource developed by the Northwest Michigan Council of Governments (NWMCOG) and multiple nonprofit, public, and private partners. The Framework for Our Future is supported by funding from the U.S. Department of Housing and Urban Development (HUD) Sustainable Communities Program.

Genesis

The Framework for Our Future grew out the Grand Vision, a citizen-led vision for future growth and development in Antrim, Benzie, Grand Traverse, Kalkaska, Leelanau, and Wexford County.

Throughout 2008 and 2009, more than 15,000 citizens were involved Front Street, Traverse City in creating the Grand Vision, which provides a set of guiding principles for future development around food and farming; energy; growth & investment; This Northwest Michigan Regional future, provide a framework for decision housing; natural resources; and Energy Plan is a component of the makers when considering energy transportation. Now, community Framework for Our Future, but also choices and options, and supply members and partners are working to serves as a stand-alone resource information on initiatives to foster incorporate Grand Vision principles into for local governments, business, energy efficiency and renewable energy. plans, developments, investments, and community organizations, and citizens. practices. Networks made up of key The primary target audience is local community members work to advance Purpose governments within the Northwest Grand Vision guiding principles through Lower Michigan region. However, outreach, education, programs, The purpose of the Northwest there are a number of key players services, and collaboration between Michigan Regional Energy Plan is and stakeholders whose participation and among community partners. to provide a regional roadmap for a and effort is critical, including utilities, resilient energy future for the region. energy service providers, institutions, The Framework for Our Future industrial and commercial businesses, is intended to support the Grand This Plan is the first Energy Plan as well as citizens throughout the Vision by helping local governments, prepared in Northwest Lower Michigan, Region that make energy choices nonprofits, and other organizations and is intended to serve as a foundation every day. This Regional Energy Plan working to meet local goals, and will for future efforts. The Regional Energy attempts to provide information on include information and tools that Plan is not intended to be a consensus current energy situation and provide can address issues identified as on the optimal mix of energy resource direction and strategies to the Region priorities by the Grand Vision process. and efficiency investments. The diverse for achieving a resilient energy future. Highlights of the Framework process geography, capacity, needs, and include an emphasis on social equity options of the communities throughout Goals issues; a continued focus on public the Region make such a unified input; and the creation of tools, data, consensus approach impractical. Through extensive discussion, and resources that can be used by the Grand Vision Energy Network local governments, public agencies, The Regional Energy Plan attempts to established the following goal: nonprofits, and the private sector. outline the key factors in our energy 3 Resilient energy uses in Integration or modified and implemented to construction, transportation and reduce energy consumption and economic development. This Regional Energy Plan is one increase renewable energy, and component of the overall Regional Plan provide reliability, sustainability, and The Energy Network also identified for Sustainable Development, facilitated resiliency to our energy future. four key factors to consider through the NWMCOG with the support and ensure REAL solutions in of a HUD Sustainable Communities Section 2: Regional Energy the regional energy future: Grant. The Regional Energy Plan Profile — a description of current is also intended as a stand alone use of energy and results of a Reliability: Provide reliable document that will serve as a resource community survey on energy; and affordable energy for communities throughout the Region to build a resilient energy future. Section 3: Key Regional Energy Ecological Impact: Ensure energy Issues — an outline of the major issues choices are ecologically sound There will be significant components affecting energy choices for the Region; of the overall Regional Plan that will Affordability: Provide cost consider energy use and production, Section 4: Current Regional Energy effective options to reduce energy especially in the areas of Housing Efficiency / Renewable Energy use and develop alternatives and Transportation. Efforts are being Programs — a summary of selected to carbon-based fuels made to ensure integration of the initiatives underway in the public, recommendation in this Regional private, and non-profit sectors to Local Economic Impacts: Energy Plan with the overall Regional advance towards a resilient energy Stimulate investment in local energy Plan for Sustainable Development. future and experiences of selected efficiency and renewable energy businesses, institutions, and residents. Structure Key Indicators The Regional Energy Plan is The Grand Vision Energy Network organized into four sections: has identified key indicators that will evaluate progress towards a resilient Section 1: Resilient Energy Strategies energy future. These indicators — a series of strategies, programs, are outlined in the table below. and services that can be adopted

Indicator Source

Power Outages Utilities

Reliability Peak Load – Value/Timing Utilities/MISO

Personal impression of future reliability Surveys

MMBTUs Greenhouse Gas Emissions Baseline Energy Analysis

Ecological Impact Local Sequestration Capacity Land Use Analysis

Affordability Cost per Capita by Sector and Geography Baseline Energy Analysis

Dollars Exported by Type and Sector Baseline Energy Analysis

Local Economy Dollars Invested in Energy Efficiency and Local Generation Multiple

4  Energy Use

Energy is used in all sectors of the economy for all purposes. Energy heats and cools our homes and businesses, power our appliances $ and electronics, fuels our vehicles 904 Million and transportation systems. SPENT ANNUALLY ON ENERGY Information on the Region’s energy IN THE 6-COUNTY REGION use was collected as part of a Baseline Energy Assessment, conducted by SEEDS as part of the Framework for the Future project. The following is a brief summary of our energy use. Additional information on the Baseline Energy Assessment is included later in this report and the full report is available at the Framework for the Future website. 50% 85% • Region spends $904 million per year on energy; • Over 85 % of energy dollars are exported out of the region; • Electricity use and conversion NEARLY 50% OF THE OVER 85% OF ENERGY account for around 40% of REGION’S ENERGY COST DOLLARS ARE EXPORTED energy use and greenhouse IS GASOLINE FROM THE REGION gases, with gasoline at 30%; • Almost half of the energy cost in the region is for gasoline; Regional Dependence: We are per day). While peak oil production • Over 80% of electricity is highly dependent upon energy sources has not been realized worldwide, there generated by coal and nuclear, outside of our borders – we generate are disagreements over when that day the two least preferred less than 15% of our own energy. may come, and emerging countries sources from the survey; demand has increased much more • Around 6% of the region’s No One Answer: There is no magic quickly that additional production. US electricity is generated silver bullet that will solve the energy reserves of petroleum for future use, and by renewable fuels problem -- there are tradeoffs to every the production of that petroleum, has energy source. Aggressive energy declined ever since and is anticipated Energy Axioms efficiency, diverse energy options, to continue to decline. According to distribution improvements, and the Intergovernmental Panel on Climate There are some fundamental technological innovation create the Change, endorsed by the United Nations axioms which are self evident pathways to a resilient energy future. General Assembly, if Greenhouse to serve as the starting point for Gases are emitted at the current levels, Regional reasoning about energy. Energy Efficiency is Good: Energy the Earth’s average temperature will efficiency is something we all can rise by between 2.5 and 4.7 degrees Energy is Important: Energy is a agree on – energy efficiency lowers Fahrenheit over the next fifty years. primary and critical input to human cost, reduces emissions, puts local activity and the economy. Each power contractors to work, increases Collective Action: Each individual, outage, international incident, and local retail store sales, and keeps business, and local government has increase fuel prices that send shock more money in the Region. an important role to play and actions waves through the economy are strong to take in energy efficiency and reminders of the importance of energy. Business as Usual is Not Resilient: increasing renewable energy use. No According to US Energy Information single agency, entity or business can Energy Costs A Lot: The Northwest Administration, the peak of petroleum create a resilient energy future. Michigan Region spends a lot production in the United States was of money on energy—more than 1971 (9.463 million barrels per day – 2101 $900 million dollars every year. production was 6.479 million barrels 5  Resilient Energy Strategies

In order to advance toward a resilient • Encourage development in Increment Financing in Downtown energy future, specific strategies areas of existing infrastructure Development Authority Districts are necessary that can be adopted • Encourage the development and implemented by individuals, Residential Strategies of local bio-fuels businesses, and organizations • Support and expand efforts throughout the region. The Resilient • Work with Financial Institutions for Fleet conversion to Energy Strategies are provided in this to establish loan program alternative energy sources first section of the Regional Energy • Link Utility EO/RES Programs Plan to focus attention, discussion, and with community outreach All Sectors Strategies consideration on immediate, effective and positive action. In the following • Expand TC Saves program • Develop a comprehensive strategy sections, there are descriptions to interested communities for engaging the community in the of current energy efficiency and in the Region issues, opportunities, plans, and renewable energy programs and • Develop green lease with strategies for increasing energy services, as well as the case studies, rent increases offset by efficiency and renewable energy which show there has already been guaranteed energy savings • Create intake clearinghouse and significant effort and success. • Engage landlords, tenants, coordinating entity for energy energy providers, and local efficiency/renewable programs Each individual, business, and governments to increase energy organization is different, but have efficiency in rental housing • Establish annual reporting many common issues in energy mechanism to track progress • Refurbish and install furnaces use and choices. Many of the in low income homes with local • Expand Community Solar Program strategies presented in this Plan have school and college job training • Encourage the use of Demand been implemented both in specific and construction programs Side Management/ Demand areas of the Region and across Response programs the country with great success. • Link energy efficiency services and programs with organizations • Prepare draft ordinances for The following is a summary of the that service low income population wind and solar energy for both strategies. Additional information and advocate improvements large scale projects and urban/ for each strategy is provided in • Establish a Point of Sale Energy small scale applications the Appendix including a more Audit – Home Energy Score • Develop on bill financing for complete description, proposing • Encourage use of a housing energy efficiency repayment implementing entities, resources energy evaluation tool such as • Develop a comprehensive and web links for similar projects. HERS or DOE Energy Score transportation energy strategy that incorporates energy Institutional Strategies • Adopt a local Building Energy Code and support an updated efficiency and alternative State Building Energy Code fuels into the transportation • Conduct Energy Audits of decision making process Local Government Buildings • Point of Sale Energy Audit - Home Energy Score • Expand EV charging stations • Establish policy for energy • Set up bulk purchasing efficiency review of local • Develop Bike Share Program arrangement for solar panels government Capital • Develop and support car Improvement Plans sharing program • Share opportunity for Smart Grid investments • Establish energy efficiency procurement practices Business Sector Strategies • Explore the opportunity to for local governments facilitate and develop micro • Work with business grids to locally link generation, • Establish Fast Track permitting community to develop and distribution and use process for green projects implement energy efficiency • Establish Property Assessed analysis, implementation, Clean Energy (PACE) loan program and financing program. • Develop GIS layer for Service • Create analysis protocol Recipients and Providers for Combined Heat and • Support state policy initiative Power opportunities for property tax abatements • Develop a Loan Program for for renewable energy 6 energy efficiency using Tax  Regional Energy Profile

There are four components to • Benchmarking our progress. and national average; the Regional Energy Profile: • Energy Use is almost evenly Baseline Energy Assessment; The assessment aimed to establish split between residential, Community Survey; Social Equity, an energy baseline both individually commercial, and transportation; and Regional Energy Issues. and collectively for the six counties • Electricity use and conversion of the Grand Vision: Antrim, Benzie, Baseline Energy Assessment account for around 40% of Grand Traverse, Kalkaska, Leelanau, energy use and greenhouse and Wexford. The baseline included gases, with gasoline at 30%; The first step in preparing a Regional data on energy pricing; energy • Almost half of the energy cost Energy Plan is to document the types – electricity, heating, and in the region is for gasoline; types and quantities of current transportation, including both site energy use in different sectors of consumption and the source energy • Over 80% of electricity is the community. A Baseline Energy consumption required to generate generated by coal and nuclear, Assessment was conducted for and distribute energy to the site; the two least preferred 2011 by SEEDS, Inc. under the HUD and energy emissions, both direct sources from the survey; Sustainable Communities Grant. and indirect for each County across • Around 6% of the region’s residential, commercial and industrial, electricity is generated The baseline provides a and transportation sectors. by renewable fuels comprehensive and quantitative assessment of the types and quantities The Grand Vision Energy Network The baseline report documents of energy currently consumed by Web Page includes a PowerPoint the significant economic impact of different sectors of the community. summary and the full version of the energy use, the extent of energy The baseline often also includes an Grand Vision Energy Plan - 2011 derived from outside the Region, and analysis of the financial costs and Energy and Emission Baseline. dependence of electricity production environmental impacts associated with on less than desirable sources. energy consumption. This analysis The following are some of the provides an objective basis for: key findings and conclusions The data from the Baseline Energy from the Baseline report: Assessment informs the focus and • Projecting future energy direction of this Regional Energy demand, costs, and impacts; • Region spends $904 million Plan. The following are some key • Setting reasonable and per year on energy; conclusions from the Baseline actionable energy goals; • Over 85 % of energy dollars are applied to the development of • Targeting energy liabilities exported out of the region; the Regional Energy Plan: and effective strategies to • Per Capita Use in the 6 county • Investments in energy efficiency achieve our stated aims; region is lower than the state and renewable energy will circulate dollars within the Region, rather be exported outside the Region. For example, just a 1% reduction/reallocation in energy use would result in $9 million OVER 80% OF ELECTRICITY IS available for other investments GENERATED BY COAL & and expenditures in the Region; NUCLEAR ENERGY 80% • There are opportunities in each sector and use for energy efficiency; • Strategies targeted toward reducing electricity consumption, replacing coal and nuclear ABOUT 6% OF ELECTRICTY IS with renewable generating GENERATED BY RENEWABLE FUELS capacity, and reducing 6% gasoline consumption will have the greatest effect on greenhouse gas emissions and criteria air pollutants. 7 sources. There were more undecided respondents on a biomass plant as a regional energy option than the other energy types. About half of high school students would support onshore wind farms, but none of the other energy types had a majority of student support, primarily because a large number of students do not yet have a position on this issue.

Three-fourths of adult respondents indicate they would live within 20 miles of an onshore wind and solar farm. High school students are less likely to be willing to live in proximity to these energy sources. Community Input Expo A large number of adult respondents (60%) indicate they are willing to pay more per month for electricity if it is Community Survey To frame the energy discussion, generated with renewable sources. network members identified four When asked how much more, over fifty As part of the Grand Vision Energy factors to consider when thinking percent of those willing to pay more Network and HUD Sustainable about electricity: 1) Reliability; 2) would pay between $6 and $20 per Communities Grant, a Community Ecological Impacts; 3) Affordability; month more for renewable sources. Energy Survey was conducted in and, 4) Local Economic Impacts. December 2012 that collected data Among adult respondents, reliability is Adult respondents overwhelmingly on energy utilization, production and ranked among as the most important support providing incentives to choices for generating energy locally. factor, while the economy is ranked as encourage residential and commercial least important. High school students users to conserve energy, and 82% To inform this Regional Energy Plan, who completed the survey rated the of adult respondents indicate they citizen input was needed surrounding factors nearly equal in importance; have taken steps in the last five years energy utilization, production and however, they placed local economy to make their primary residence more choices for generating energy slightly higher than the rest and energy energy efficient. Of those that have not locally. The first step in gathering this reliability as the least important. taken steps to conserve energy, one in information was to conduct a survey five said they were not sure what to do that was available to residents in Efficiency and conservation are or how to prioritize. Business owners each of the six counties comprising rated the best options among adult are also proactive regarding energy northwest Michigan (Antrim, Benzie, respondents when considering each of conservation, with 71% indicating they Grand Traverse, Kalkaska, Leelanau the factors and electricity generation, had taken steps in the last five years to and Wexford). The online survey link with the exception of Reliability, where make their businesses more energy- was available on the Grand Vision natural gas is considered by a slim efficient. More than half of business website, and distributed through the margin over energy efficiency to be owners are also willing to pay more Energy Network partners including local the best energy option. High school for renewable energy sources, with energy providers, government agencies students also favored efficiency nearly 60% of those indicating they and local nonprofits. In addition to and conservation when considering would pay up to 10% more per month. the online survey, the Northwest Affordability and Reliability, however, Michigan Council of Governments believe natural gas is a better choice Social Equity distributed a paper survey through for Local Economic Impacts and a solar its social equity committee to reach farm is best for Ecological Impacts. A critical element of the NWMCOG citizens that might not have access Regional Plan for Sustainable to a computer. To gather information If assured proper regulation and Communities is ensuring that all specific to high school students, a oversight to protect the environment, members of the Region have fair separate survey was available online a majority of adult respondents and equitable access to livelihood, in local high schools. In total, 2,179 would be likely to support onshore education, and community citizens took the survey, of which 641 wind farms, offshore wind farms, and resources, full participation in completed the high school survey. exploration and drilling for natural gas political and cultural life of the

8 community and self determination of higher housing costs and fewer disproportionate burden for energy use in meeting fundamental needs. affordable housing options. Rural and cost on lower income families. residents choices for heating fuel A wide range of options for are limited to delivered fuels that are A key tenant of this Regional Energy transportation, housing, employment, higher in cost that natural gas. Plan and the Regional Plan for and energy provide the best Sustainable Communities is working opportunity for access for all The counties with the highest to increase choice for housing, members of the community, and percentage of delivered fuel are also transportation, and energy sources. create a diverse local economy those counties with lower average Not only will increase choice provide that is sustainable and resilient. household incomes and higher for a more sustainable and resilient percentages of persons living below future, but also provide increase access The Baseline Energy Assessment the poverty threshold (see chart, right). for lower income families to more estimated the $904 million spent on fully participate in the community. energy in the region is equal to 13% of All these factors combine to put a the total personal income of the region, based on an average personal income Residential Fuel Types By County of $34,454. While energy use may vary Northwest Lower Michigan among income levels, there is a basic need to provide heat, electricity, and 100 transportation, and typically the cost of energy as a percentage of income is much higher for lower income families. 80 In addition, there are other factors that increase the use of energy for lower income families in the northwest 60 Region: distance from employment, lower quality housing stock, older appliances and heating systems, and dependence on delivered fuels. 40

Distance from Employment: In most cases in Northwest Lower Michigan, the highest housing costs and employment 20 opportunities are located with the community centers, and lower income families must often live farther outside 0 Antrim Benzie Grand Traverse Kalkaska Leelanau Wexford of town and depend more heavily on personal transportation to get to work, in many cases using older vehicles that are less efficient. The rural character of the Region requires additional travel: The average driver in the Grand Utility gas Bottled, tank, or LP gas Electricity Traverse region drives nearly 23,000 Fuel oil, kerosene, etc. Wood Other fuel No fuel used miles every year, compared to just 14,000 miles in the rest of the country.

Percentage Lower Quality Housing Stock: Household Delivered Fuel Below Poverty Affordable housing options in the Income region are typically limited to older Line or modular homes with appliances Antrim 42.9% $43,171 16.0% and heating systems that are less Benzie 42.7% $47,491 13.9% efficient and require more energy for the same level of comfort and utility. Grand Traverse 15.85% $51,641 11.2% Kalkaska 49.7% $39,849 16.2% Dependence on Delivered Fuels: Natural gas services require a certain Leelanau 30.1% $53,982 11.1% population density that is concentrated Wexford 29.1% $40,660 17.7% around population centers, areas 9  Regional Energy Issues

There are several key issues relating 2. Engage building occupants in create an effective green lease. to energy production, distribution, saving energy Owners and tenants can use and use in the Region. This section Occupants control a large (and basic principles for sustainability highlights a number of perspectives growing) share of the energy (provided by BOMA’s Green Lease and much of the interest in these consumption of a building, yet their Guide) in a new green lease, an issues and is intended to provide schedules, equipment use, and amendment to an existing lease, a starting point for discussion and attitudes are rarely considered in or a separate letter agreement. discourse, rather than to provide a energy efficiency efforts. Some consensus or definitive position. studies have found 10 percent The disconnect between investment savings simply from informing decisions and operating cost tenants of their energy use. responsibilities is also sometimes Landlord/Tenant Energy Holding competitions or organizing true for new commercial construction, Efficiency Investments community–based programs can where a developer designs and reap even larger savings. constructs commercial space and Energy efficiency investments in a new owner purchases the space leased spaces, whether residential 3. Incorporate energy efficiency in after construction. Of course, or commercial, are often stymied tenant fit-outs energy efficiency is becoming more because building owners pay for Owners and tenants can shape of a selling point, so developers are improvements, but the tenants who the process of finding and often including these measures to typically pay for energy receive the customizing a leased space by stay competitive. (ACEEE Data) immediate benefits. If the lease using green letters of intent and makes the owner responsible for creating plans for efficient tenant Outreach/Communication all energy costs, tenants have no fit-outs. Using a sustainability incentive to reduce their consumption. focused third party can also help Engaging the community on the issues improve negotiations between and opportunities that can result in There are example leases that help both parties early in the process. significant reduction in energy use to overcome the split incentives and expansion of renewable energy barrier by sharing the costs of 4. Plan ahead for deep energy can be a daunting task. Where to energy efficiency projects between retrofits begin, who is the audience, how to the owner and the tenant, such the Deep energy retrofits achieve ask the right questions to learn the National Resource Defense Council’s bigger energy savings important concerns from community Energy Aligned Lease Language. (sometimes over 50 percent members and the barriers to action, reductions) at similar cost. They preparing understandable information The Rocky Mountain Institute, in drive much larger savings than on incredible complex issues are all conjunction with the Building Owners conventional retrofits, create significant challenges. The key to and Managers Association (BOMA) value for both the owner and effective outreach is focusing on those prepared Working Together for the tenant and are most cost- efforts that will have the best outcome. Sustainability: The RMI – BOMA Guide effective when implemented at for Landlords and Tenants. In the the right time. Triggers such as The Grand Vision Energy Network has Guide, they outline five best practices a major tenant turnover or major worked to begin this conversation with for owner and tenant collaboration equipment replacement allow developing information on the current deep retrofit practitioners to find baseline energy use, surveying the 1. Make energy use and costs cost-effective solutions for the community on what they consider more transparent entire building. This approach the more important issues in shaping Although collecting data has requires greater upfront our energy future, and sponsoring a cost, that cost has steadily investment in design, analysis, workshops on key issues, including decreased as utilities governments, and communication between the State’s Energy Infrastructure, Tools and technology solutions make owner and tenants, but delivers to Finance Renewable Energy, Energy a greater amount of data more much greater energy savings and Efficiency, the Regional Energy Expo, accessible. Owners and tenants other non-energy benefits. Natural Gas Hydraulic Fracturing, should access and share data, and and Energy Economics in Michigan. then structure their relationship 5. Structure agreements to benefit around the building’s underlying both parties This Regional Energy Plan is another energy performance. The RMI/BOMA Guide provides tool to initiate focus dialogue in guidance on working together to the Region’s communities on the

10 specific strategies and actions that renewable energy are the same, since • Improved management of can be taken to reduce energy use increases in these areas directly result energy consumption by home and increase renewable energy. in the decrease of greenhouse gases. electronics with improved While the focus of this Regional hardware and software controls Energy Plan is primarily as a tool for Behavior Modification and using “smart plugs.” local governments, residents and • Improved information and business owners who will be making There are tremendous opportunities feedback to consumer, with energy efficiency and renewable to reduce energy consumption and sensors, smart metering, energy investment decisions are emissions by adopting relatively and gateway devices to key to successful outcomes. straightforward changes in behavior. diagnose how consumers A new McKinsey study on consumer use energy, and then tailoring The following are some suggestions behavior identified how residential this information to suggest in developing an approach for energy-efficiency performance might energy-saving approaches. engaging the community in energy benefit from behavioral adjustments efficiency and renewable energy: that avoid an impact on lifestyle. Resource Coordination (See sidebar, “About the research.”) • Know the target audience: Listen We found that the impact could There are a number of initiatives and to the key concerns of each be immense: an untapped savings services in the Region that support segment of the community, as opportunity of 1.8 to 2.2 quadrillion energy efficiency and renewable well as the barriers they perceive British thermal units a year for US energy; some are listed in the following and the benefits they might households, according to their section. While at some level, the receive in taking action at regular preliminary estimate (Exhibit 2). variety of these programs and services meetings, special workshops, Such savings would be equivalent at the Federal, State, Regional, Local or community gatherings. to 16 to 20 percent of current US and private levels provides access to • Develop information and services: residential-energy demand. diverse customers. However, one of Residents and businesses the challenges of a comprehensive need the right information and Examples of behavioral adjustments and consistent Regional approach is the right services at the right include turning off lights in unoccupied the coordination of these disparate time in the right way to take rooms in a home and switching off programs and services to meet action. This can only happen if central air-conditioning systems residents and business needs for a variety of resource materials when no one is at home. Changes investments and actions that will result and services are easily available. defined as having an impact on in savings and success. Included This universal availability is a lifestyle—and therefore excluded— here are a series of strategies that challenge for individual local include activities such as lowering focus on resource coordination. governments; however, there the lighting level in occupied rooms are resources in the Region that and reducing heating temperatures Financing are available – the challenge is in winter to the point that residents coordinating these resources. would want to wear more clothing. Upfront costs are a major barrier The results showed that the residential • Use existing communication to implementing energy efficiency sector had the most significant channels: Citizens gather projects in homes and businesses. energy-efficiency opportunities. their information from familiar Many energy policies and programs sources. A central clearinghouse are structured to provide upfront Based on their analysis, there are a of information that is shared financing to encourage investment in number of approaches to advance with existing communication energy efficiency improvements. There energy-efficiency performance in sources provides the latest in are a number of strategies that have ways that do not have an impact on information to diverse audiences. been implemented by utilities, federal, lifestyle. Several approaches, many state and local governments, and of them enabled by technology, The International Council for Local energy service companies (ESCOs) could be used to support behavioral Environmental Initiatives (ICLEI) to provide financing, including direct energy-efficiency adoption, including: Local Governments for Sustainability loan interest loans, on-bill financing, project has prepared a comprehensive property tax financing (also known as • Improved home automation, with Outreach and Communication Guide Property Assessed Clean Energy or a new generation of sensors and (2009) that provides a comprehensive PACE bond financing), energy service controls for HVAC and lighting that resource to assist community leaders performance contracting (ESPC), and make it possible for occupants in reaching out to their communities. energy efficiency mortgages (EEMs). to more accurately program The Guidebook does focus on climate temperature set points and lighting change, but the tools for engaging the Financing programs for homeowners timetables to reduce energy use. community on energy efficiency and have typically drawn low participation

11 60% OF RESIDENTS ARE WILLING 70–75% OF RESIDENTS ARE WILLING TO LIVE WITHIN 2 MILES OF TO LIVE WITHIN 20 MILES OF ONSHORE OR OFFSHORE WINDFARMS ONSHORE OR OFFSHORE WINDFARMS

rates and tend to attract educated Understanding the Marketplace which reducing the inefficiencies due to and motivated homeowners who gives an overview of the financing distance between generation and are the least in need of financing options and investment partners that use, providing the opportunity for opportunities. Financing for those are currently available. What Have Combined Heat and Power generation who are most in need – people We Learned from Energy Efficiency to utilize waste heat, and expanding with low or fixed incomes and poor Financing Programs? offers a review solar and wind energy. However, credit – has had low success. of 24 energy efficiency loan programs while there are local construction and and further explores the potential operational benefits, the cost of local The private-sector ESCO market of these low-risk investments. The generation must also be considered, for energy efficiency services in latest installment On-Bill Financing especially when compared to lower commercial buildings and institutions for Energy Efficiency Improvements: cost renewables from other sources has enjoyed greater success A Review of Current Program that may be outside the region or state. recently, and has grown significantly Challenges, Opportunities, and Best over the past several years. Practices, takes an up-close look at 19 While local energy generation is often existing on-bill programs, ascertains supported in concept, when specific Property Assessed Clean Energy the key elements that make them projects are proposed, opposition (PACE) bond financing provides successful (as well as factors that may often arises. For example, the for local governments to issue tax- impede the achievement of optimal proposed Duke Energy 200 Megawatt exempt bonds to loan for energy results), and identifies emerging Gail Windpower Project with about improvements that are repaid through trends in program implementation. 100 wind turbines proposed in Benzie special assessments. There was and Manistee County resulted in an initial wave of interest in various ACEEE also holds an annual Energy significant opposition. Even the single parts of the US, however, progress Efficiency Finance Forum, designed wind turbine installed by Traverse City has slowed with a ruling from the for investors, financiers, utilities, Light and Power, the first utility wind Federal Housing Finance Agency that and policymakers, surveys the turbine in the nation, was put in an prohibited Fannie Mae and Freddie energy efficiency financial landscape alternate, less productive location due Mac from acquiring mortgages in including the latest innovations in to opposition to the original location. homes taking part in PACE. The financial structures and models. And TCLP’s proposed biomass energy agency said Fannie and Freddie, which plant was scrapped after significant together hold or guarantee more than Community Consensus opposition. Some opposition is due half of all home mortgages, would be on Local Generation to the type of generation – concerns at risk because the assessments for were raised regarding fuel supplies the energy program would have priority Electricity for the Northwest Michigan for the TCLP biomass plant, in light over unpaid mortgage loans if those Region is predominantly provided of TCLP studies that concluded there assessments were not fully repaid by sources outside of the Region. was a surplus of wood waste material. when the property changed hands. With the exception of the Heritage Some opposition is due to location, Energy Wind Energy Farm in Wexford especially for wind energy installations. The American Council for an County, there are no major electrical The Community Survey indicated Energy Efficient Economy ACEEE generating facilities in the Region. that around 60% of the respondents has released a series of reports on There is a strong interest in developing are willing to live within two miles of energy efficiency finance, beginning distributed energy production, offshore and onshore wind farms with Energy Efficiency Finance 101: and 70 – 75% within 20 miles. 12 formed in 1998 by several transmission voltage or thermal issues in this A community discussion and dialogue owners to achieve the benefits northern Lower Peninsula area. The regarding electricity generating of the Federal Energy Regulatory construction of a 230 kV transmission capacity would help determine Commission (FERC) vision to form an line originating from both east and the Region’s energy future. The independently operated transmission west sources to the area and looping community should decide on whether system, and manages delivery of through the Northern Lower Peninsula such capacity should be developed electric power across all or parts of 15 will provide adequate stability to the at the local level, acquired from U.S States, including Michigan, and Northern METC service territory. renewable resources outside the the Canadian province of Manitoba. region or state or continue to depend Since most of the underlying 138kV on fossil fuel source outside the region. MISO conducted a regional transmission in the Northern Lower If local sources are desired, discussion evaluation of economic potential and Peninsula has copper conductor that should focus on project scale and how reliability issues in MISO’s northern is overloaded, studies have shown the perceived impacts of these sources footprint, entitled the Northern Area line overloads and structures that are should be mitigated to gain project by Study in May 2013. The Northern approaching the end of their useful project support. The opportunities Area Study found that large-scale life. Rebuilding this 138 kV backbone to provide both heat and electricity regional transmission expansion to double circuit structures and from power plants should be strongly in MISO’s northern footprint is not energizing one side to 230kV was considered, because of the significant cost-effective based on production chosen as the preferred proposal. increase in production efficiency. cost savings, under current This allows incremental development business as usual conditions. of the 230 kV loop, and thereby, Employment & Job Training creates project synergy. The initial The Michigan Public Service phases of this project have been Investments in energy efficiency and Commission (MPSC) has issued orders submitted to the Midwest ISO with renewable energy not only reduce requiring all regulated electric utilities a request to be included in the 2009 dependence on fossil fuels and and alternative electric suppliers Midwest ISO Transmission Expansion reduce greenhouse gases, but pay to file assessments of their abilities Plan (MTEP) ‘Planned’ projects list, significant local dividends. Dollars to meet their customers’ expected and additional phases will continue invested in our homes and businesses electric requirements each year to be submitted until the project is reduce costs, improve property since 2000. In addition, the MPSC completed. Additional phases for this values, put local contractors to work, solicited comments from the Midwest loop will be implemented, as the 138 boost local retail sales, and keep Independent Transmission Operator kV Northern Lower Peninsula system dollars in the local community rather (MISO), American Transmission requires capital improvement. than exported to energy producing Company, LLC, and International regions, states, and countries. Transmission Company on the Intermittency issues they believe to be relevant The Michigan Land Use Institute in meeting customer demand. A key issue with renewable energy had produced two reports that sources, particularly solar and wind highlight the local opportunities In 2009, ITC Transmission and energy, is the intermittent nature of for energy efficiency: Energy Michigan Electric Transmission production. Solar energy is produced Efficiency and Economic Opportunity Company, LLC submitted comments during the day and wind energy is in Grand Traverse County, June on the Assessment of the Michigan produced when the wind is blowing. In 2012 and The Power of Energy Transmission Capacity and Plan some cases, this production matches Efficiency, October 2013. for Meeting 2009 Peak Load the electric loads required by the Demand that are particularly grid, in other cases, it does not. Electricity Transmission relevant to Northern Michigan. & Distribution Much has been written about the need In their comments, they noted an issue for and expense of additional fossil Because a predominant percentage of continued long-term reliability in fuel generation backup as increasingly of the Region’s energy comes from Michigan is the Northern Michigan higher percentages of renewables outside the Region, the distribution 230kV electrical transmission loop are integrated into power systems. systems that provide that energy in the METC service territory. The Contrary to this conventional thinking, are critical to the reliability, Northern Lower Peninsula of Michigan new analysis and research by a security, and cost to the Region. relies heavily on the existing 345 number of researchers including kV loop running from Ludington to Marija Ilic of Carnegie Mellon Regional electricity transmission Traverse City, to Gaylord and then University and her team, show there is and distribution is managed by the south to the Saginaw area. Outages significant hidden potential in reliably Midcontinent Independent System of any one or more of the sections of and efficiently combining higher Operator, Inc. (MISO). MISO was this 345 kV loop can create serious penetrations of distributed renewable 13 result in deep reductions in electric sector greenhouse gas emissions and water use. • The direct incremental cost associated with high renewable generation is comparable to published cost estimates of other clean energy scenarios. Improvement in the cost and performance of renewable technologies is the most impactful lever for reducing this incremental cost.

Energy Regulation

Michigan’s Clean, Renewable and Efficient Energy Act, Public Act 295 of 2008, requires all utilities in the State to develop and implement plans to reduce energy use by up to one percent per year and increase renewable energy for electricity production to 10% of total megawatt Wind Turbines in Missaukee County sales. While more of a statewide, regional and national issue, there are many approaches that should be energy resources at a low cost and distribution and variability and carefully studied and considered to with minimal use of fossil fuels. Their uncertainty in output, pose challenges ensure that the existing regulatory concepts enable intermittent resources to the operability of the nation’s structure does not inhibit investment to be effectively integrated using electric system. Key findings include: in and penetration of renewable embedded model-based sensors, resources in the electricity generation enhanced communications links and • Renewable electricity generation mix. One of the most challenging decision-making algorithms, combined from technologies that are issues relates to improvements to with Adaptive Load Management commercially available today, in the transmission systems that would (ALM) techniques that include combination with a more flexible facilitate renewable investments. demand response and load shifting. electric system, is more than Regulatory systems currently in adequate to supply 80% of total place were established with more Other options for lowering the risk of U.S. electricity generation in traditional electric utility monopolies intermittency from renewable energy 2050 while meeting electricity organized around central power sources can be mitigated by reducing demand on an hourly basis in plants serving retail markets. The electrical demand via improvements every region of the country. new world of distributed renewable energy production demands an critical in efficiency; creating storage and • Increased electric system assessment of regulatory structures. reserve power; and working to develop flexibility, needed to enable new, renewable, baseload power. electricity supply and demand balance with high levels of The National Renewable Energy renewable generation, can Laboratory’s (NREL) Renewable come from a portfolio of Electricity Futures Study (RE Futures) supply- and demand-side explores the implications and options, including flexible challenges of very high renewable conventional generation, grid electricity generation levels—from storage, new transmission, more 30% up to 90%, focusing on 80%, responsive loads, and changes of all U.S. electricity generation—in in power system operations. 2050. At such high levels of renewable • The abundance and diversity of electricity generation, the unique U.S. renewable energy resources characteristics of some renewable can support multiple combinations resources, specifically geographical of renewable technologies that 14  Current Regional Energy Efficiency & Renewable Energy Programs

There are a number of initiatives and is implementing an Energy their Renewable Energy Portfolio already underway by diverse Optimization Plan. While each utility Standards (RPS) and is pursuing organizations to increase energy EO program is different, there are the implementation of those efficiency and renewable energy many common services that are plans. In many cases, utilities have throughout the Region. This section available to most, if not all electric partnered to purchase power from summarizes and highlights those and natural gas customers in the independent power producers, efforts with two purposes: First, Region. These services include: predominantly for wind energy, to sharing these efforts can inspire satisfy their RPS requirements. other organizations to adopt selected • Rebates to replace programs and services and reap inefficient appliances According to the Michigan Public the benefits of lower cost, reduced • Discounts on energy Service Commission in their Readying environmental impact, and increased efficient lighting Michigan to Make Good Energy options; and second, there may be Decisions: Renewable Energy, • Financial incentives for opportunities to access and share Michigan’s current Renewable energy efficiency appliances services across organizations. Portfolio Standard (RPS) goal for and HVAC systems electric providers to obtain 10% of Utility Programs • Financial incentives to business their electricity sales from renewable for energy efficient investments resources in 2015 are expected Michigan’s Clean, Renewable • Information and Education to be met in nearly all cases. The and Efficient Energy Act, Public on low and no cost RPS has resulted in approximately Act 295 of 2008, requires all behaviors and measures. 1,400 MW of new renewable energy utilities in the State to develop projects operating or currently under and implement plans to reduce The program has produced development in Michigan, with 94% energy use by up to one percent significant results across the of these new projects are wind energy per year and increase renewable region. In 2012 Traverse City Light projects and approximately half are energy for electricity production and Power saved over 4.1 million non-utility owned. By the end of 2013, to 10% of total megawatt sales. kilowatt hours and Cherryland in total, Michigan consumers will have Electric Cooperative reported paid approximately $675 million in Utility Energy Optimization Plans a savings of 3.8 million kilowatt surcharges supporting this expansion. Energy optimization (EO) is an hours savings, together enough Due to decreases in renewable energy umbrella term that includes energy energy to power approximately costs, surcharge collections are conservation, energy efficiency, 1200 homes for an entire year. expected to be significantly reduced and load management. It is the or even eliminated for some electric most cost-effective way to save Utility Renewable Energy Standard providers beginning in 2014, because ratepayers money. The goal of the The primary goal of the renewable project costs are in some cases EO program is to reduce the future energy program is to increase essentially equivalent to conventional costs of electric service to customers the amount of electricity that generation under current conditions. by reducing the total amount of comes from renewable energy generation capacity utilities will have resources. Each electric provider— During the years Michigan’s RPS has to acquire and maintain in the future. including shareholder-owned been in place, the price of the lowest- The EO program applies to both utilities, electric cooperatives, and cost renewable resource, wind, has electric and natural gas providers. municipal utilities—must meet a declined from over $100 per MWh in State mandated renewable energy 2009 to $50 - $60 per MWh in 2013. The statute directs utilities to standard of 10 percent of total The predominant reason for the drop implement programs that will sales in megawatt hours by 2015. is the significant increase in wind farm collectively achieve a minimum level of capacity factors from the high 20s in energy savings each year. The targets Renewable energy resources are 2008 to the mid-40s more recently. ramp up to reach annual incremental “ultimately derived from solar power, savings of 1 percent of total retail sales water power, or wind power.” The The Energy Information Administration by 2012 for electric providers and 0.75 statutory definition includes biomass, (EIA) reports in its Annual Energy percent for natural gas providers. solar, wind, hydropower, geothermal, Outlook 2013 for renewable and municipal solid waste, and landfill gas. conventional generation current Each utility in the Northwest levelized construction costs for Michigan region has prepared Each utility has provided a plan for other generation characterized as 15 ENERGY SOURCE COST PER MWh Michigan has sought to produce both US Dollars on-peak energy savings and more general energy savings through its Energy Optimization programs. In WIND Michigan, when calculating the cost- effectiveness of a program, the utility counts as part of its avoided costs HYDRO both the energy and the capacity costs avoided by virtue of the program. BIOMASS Therefore, a program that produces a large amount of its savings during peak demand periods will, all else being SOLAR equal, be more cost-effective under such calculations than a program that has less on-peak savings. OFFSHORE WIND The Michigan Public Service Commission issued an order (U- NATURAL GAS* 17049) to authorize a an incentive for Detroit Edison worth up to 1% of its program costs for achieving ADVANCED NUCLEAR peak savings targets of 80-96MW in 2013, 85-102 MW in 2014 and 90- ADVANCED COAL** 108 MW in 2015. A similar provision has been approved in a parallel 0 50 100 150 200 250 docket for Consumers Energy. *Conventional Combined Cycle Two recent studies commissioned by **With Carbon Capture and Sequestration EPA, DOE and FERC and carried out by Synapse Energy Economics Inc. renewable and non-renewable under response entails customers changing address the costs and effectiveness Michigan’s current RPS (see chart). their normal consumption patterns of demand response programs. in response to changes in the price Cherryland/TCLP Solar Project: One of energy over time or to incentive A Framework for Evaluating the Cost- of the most unique arrangements to payments designed to induce lower Effectiveness of Demand Response increase renewable energy is the Solar electricity use when prices are high Prepared for the National Forum on Up North (SUN) Alliance program. or system reliability is in jeopardy. the National Action Plan on Demand Cherryland Electric Cooperative and Response: Cost-effectiveness Traverse City Light and Power has Most demand response programs in Working Group, February 2013. joined forces to offer their customers effect today are event driven. As a an opportunity to “own” their own result, customers tend to assume that A Review of Demand Response solar system through the purchase demand response events occur for Potential in the United SUN shares and receive a monthly limited periods that are called by the States, Prepared for the U.S. bill credit for their shares output. grid operator; but critical peak pricing Environmental Protection (CPP) and real-time pricing (RTP) are Agency, November 21, 2011. The initial project included a growing in prevalence and impact. 48 solar panel offering, but the Many demand response programs Community Programs demand was so high that 80 panels are designed primarily to curtail or were quickly sold and planning shift load for short periods of time; Michigan Saves/TC Saves is underway for two additional however, those programs that educate 72-panel arrays on Cherryland’s customers about energy use with time The TC Saves residential program headquarters just off U.S. 31 in of use (TOU) rates, dynamic rates, provided direct support—including Grawn, just east of Chums Corners. and energy use feedback can also home energy assessments, produce measurable reductions in incentives and access to affordable Demand Response Programs customers’ total energy use and cost. loan options— to Traverse City Energy efficiency refers to using homeowners looking to make their less energy to provide the same or Demand response programs are homes more energy efficient. improved level of service to the energy typically provided to industrial consumer in an economically efficient and high energy load commercial TC Saves is a partnership between way at any time, including during customers by each of the electric the City of Traverse City, Traverse peak periods. In contrast, demand utility service providers in the Region. City Light and Power, and two local 16 non-profits, SEEDS and the Michigan understanding of Solar Energy. chamber. Applications are reviewed Land Use Institute. The original Partnering with the Midwest by a Loan Review Task Force with program was part of Better Buildings Renewable Energy Association, the a primary goal of reducing electric for Michigan’s statewide effort Midwest Solar Training Network, use during peak demand periods for to save homeowners in Michigan the Great Lakes Renewable Energy Light & Power. Loan conditions vary money on their energy bills while Association, local utilities, and the based on the proposed projects. increasing the comfort of people’s Michigan Energy Office, the college’s Terms are up to five years at an homes. Furthermore, it’s designed center offers the opportunity for interest rate of 3 to 5 percent. to help create and sustain jobs in Michigan citizens and workers the field of energy efficiency. to build essential understanding, Light & Power funds will help sustain knowledge, and skills to build capacity a revolving loan program that’s The program gave homeowners for local solar energy production. already launched several local energy in Traverse City a chance efficiency projects that helped for discounted home energy The NMC Solar Energy Demonstration companies save on energy costs. The assessments. Homeowners who Center provides training for work also helps the utility by reducing choose to participate in the program the emerging solar workforce; its peak load demand during high paid $100, $50 of which could be facilitates discussion, education energy use periods. The fund has rebated through DTE, and in return and outreach opportunities for the distributed eight loans so far totaling receive a home energy assessment, general public; and demonstrates more than $150,000. The Chamber immediate installation of energy saving working systems and the variety of has been able to assist several local measures and devices, and become ways solar energy can be utilized companies in reducing their power eligible for low interest financing The Energy Demonstration Center also consumption and lowering their utility for greater energy improvements. hosts conferences, tours, exhibits, bills and Light and Power can offer and facilitates partnership programs. our business customers the ability to Homeowners who commit to receive funding for energy efficiency more extensive energy system The Energy Demonstration Center at projects, especially, according to improvements as part of the TC Saves NMC is one of eight demonstration Light and Power Executive Director program could qualify for 2.99% centers in the state of Michigan. Tim Arends, as those projects percent APR loans up to $20,000.00 Established and funded in part by become more involved and costly. on those changes through the the Michigan Energy Office and state’s Michigan SAVES program. Michigan Public Service Commission, Northwest Michigan Council of the energy centers provide Michigan Governments Local Energy Grants Local contractors, home energy residents the opportunity to be at the experts, and weatherization forefront of using energy effectively. The Energy Efficiency for Local specialists completed the work Governments, a project made possible on homes, which was guaranteed Traverse City Chamber of Commerce by the Michigan Public Service through a quality assurance Energy Efficiency Loan Program Commission and Northwest Michigan inspection by a third party, another Council of Governments, is beginning benefit of this program assuring The Light and Power board recently to see energy and cost savings homeowners receive the benefits approved an additional $50,000 for results after one year in operation. of the energy savings projected. the Chamber’s Energy Efficiency The participants in the project Revolving Loan Fund that promotes included nine counties and thirteen TC Saves recently announced a energy savings among businesses in cities, villages and townships. The continued program partnership with the utility’s service district. It offers local governments received at least Traverse City Light and Power. TC micro loans for companies to invest in $40,000 to $80,000 in funding for: Saves is the only program in the energy efficiency measures identified State to continue after the original through a comprehensive energy audit. • Technical assistance funding through the state’s Michigan • 1–3 energy audits Saves expired, and is testament Light and Power also authorized • Capital energy conservation to the progressive approach and $50,000 for the loan fund last fall, and efficiency upgrades commitment of TCLP. More details for a total contribution of $100,000. are available at the TC Saves website. The Traverse City Area Chamber • Education and its Chamber Foundation each • The development of a quantified Northwestern Michigan College also committed $50,000, for a energy action plan with a five Energy Demonstration Center total lending pool of $200,000. year reinvestment strategy • The establishment of a dedicated NMC’s Solar Energy Demonstration Eligible companies must be energy savings account with at Center provides important resources commercial or industrial customers least 50% of the annual savings to build the Region’s collective of Light & Power and members of the 17 guarantees for business, industry, Comparing the 2011 reports to the State / Federal Energy local governments and Tribes for 2009 baselines with an average Efficiency & Renewable eligible projects which include energy of 12% weather adjusted energy Energy Programs efficiency and renewable energy. reduction, six out of the nine counties - Antrim, Charlevoix, Grand Contracted Services State and Federal funding for Traverse, Manistee, Missaukee supporting energy efficiency and and Wexford shows $113,257 in SEEDS Energy and renewable energy investments has documented annual energy savings. Environmental Assessments been significantly curtailed in recent The projected average after five SEEDS has conducted numerous years. The focus has moved to years is 130% return on investment. energy analyses for northern utility programs at the State level Michigan municipalities in through the Energy Optimization The project funding is no longer partnership with NWMCOG and have and Renewable Portfolio Standards available; however, the actions conducted Greenhouse Gas (GHG) through Act 295 and local sources taken by the project local Assessments for each of the six of financing energy improvements. government participants show Grand Vision counties, which provide the cost effectiveness of energy comprehensive energy consumption There are two sources of funding efficiency investments, even with data including transportation fuels. that remain: The Michigan Energy outside sources of funding. Revolving Energy Fund and the USDA In the inventories, SEEDS provides Rural Development Loan Assistance. The NWMCOG will continue to a background on greenhouse gas pursue funding sources for local emissions, reduction benefits Michigan Energy government energy efficiency for the local/regional economy, Revolving Loan Fund improvements. In the meantime, environment, and communities, as there is a wealth of information from well as opportunities to reduce GHG Public Act 242 of 2009 established these participating communities emissions – ranging from the simple, the Energy Efficiency and Renewable on the investments and returns. straightforward strategies to the Energy Revolving Loan Fund (Energy more financially intensive projects. Revolving Loan Fund) Program to Low Income Energy provide low-interest loans to public or Assistance, Weatherization The benefit to the municipality private entities for energy efficiency is not only a reduction in GHG, and renewable energy projects. The Home Weatherization Program of but also savings by reducing the Northwest Michigan Community energy use and costs. The program is currently limited Action Agency provides free energy to low interest loans for passive conservation services for eligible Private Energy Efficiency Services solar system loans for family low-income households. Programs Because energy efficiency measures farms, non-profit and educational that will offer families free energy can provide a significant return institutions and implementing conservation updates to their homes, on investment, many residents energy audit recommendations such as additional insulation, weather and businesses contract directly for family farms. Loans for public stripping, furnace repairs, and more. with private firms or individuals entities are not available at this The improvements can help people that conduct energy audits and time, but additional funding is save hundreds of dollars per year on provide recommendations for the anticipated at the end of 2013. their heating and energy bills. The most effective energy efficiency Home Weatherization Program is measures. One of the incredible The State of Michigan produces funded by the Federal Department of strengths of energy efficiency is the a guide to Energy Efficiency Energy (DOE) and administered by development of local businesses Financing for Michigan Communities, the Michigan Department of Human and greater job creation per unit of with a listing of limited and Services (DHS). DHS contracts with energy saved than more traditional on-going opportunities, and Northwest Michigan Community energy generation sources. resource and best practices. Action Agency (NMCAA) to operate the program. The Agency determines One of the most successful USDA Rural Development applicant eligibility, performs commercial and industrial audit firms Loan Assistance the necessary inspections and in the country is based in Traverse contracts with qualified, licensed City. Keen Technical Solutions The USDA will provide loan guarantees and insured private contractors to not only provides energy audits to to agricultural producers or rural complete the work. There is a long businesses with recommendations small businesses for renewable waiting list for these programs, to reduce energy use and cost, energy and energy efficiency with not enough resources to meet but designs, installs, monitors improvements, as well as loan the need for weatherization. and maintains the systems they 18 recommend. Keen uses performance contracting, were businesses get a guaranteed savings with no up front cost, and the investments are financed by the energy savings. Keen was listed on Inc. magazine’s 2013 annual list of the 500 fastest growing private companies in America.

Another local business, Paradigm Energy Services, provides energy efficiency and green design services to assist residents, businesses, and institutions in selecting the most effective energy efficiency and renewable energy options.

Numerous local contractors and suppliers provide services and products to increase energy efficiency of building envelopes and heating and cooling systems.

Renewable Energy Design and Installation Services Many area companies also provide Hodenpyl Dam renewable energy design and new chiller saving 4,000 kwh per to take better advantage of the installation for businesses and year, for a total of 74,000 kwh. most efficient snowmaking period residents. While the actual numbers at below 20 degree Fahrenheit. of installations are difficult to Not only will the LED lights reduce determine, local renewable energy direct electricity usage, but the Industry ­­— Cone Drive contractors have reported expanding switch will reduce cooling costs. Cone Drive of Traverse City is business and new orders. Incandescent light bulbs emit more a supplier of mechanical drive than 500 BTUs of heat every hour, so applications, including packaging, Energy Experiences Crystal expects to save another 4,000 material handling, mining, and kw/h per year in cooling power for materials for automotive, aerospace One of the best ways to communicate a total savings of more than 80,000 and medical equipment. In recent the opportunities for energy efficiency kilowatt hours of energy every year. years, Cone Drive has made minimizing and renewable energy is to share the Not only will the project will pay for energy use as a high priority. experiences of similar organizations itself in about 9 months, it will also that have conducted the assessments, reduce CO2 production by over 50 Cone Drive replaced 676 high- analyzed the options, generated the metric tons per year. LEDs also have intensity discharge light fixtures with necessary financing, implemented the a much longer life, so the number of 486 energy saving units from Orion measures, and measured the results. hours needed to change all of those Energy Systems. According to Orion, incandescent light bulbs every time the its high-efficiency technology cuts The following are summaries of the burn out will be money saved as well. light-related energy consumption by 50 experiences of organizations and percent or more, while providing about programs in energy efficiency and Crystal Mountain has taken a careful 50 percent more light than traditional, alternative energy and additional look at all its operation for energy high-intensity discharge (HID) fixtures. resources for information; savings, including snowmaking. Crystal added a twelve inch diameter The lighting changes mean that Cone Hospitality/Recreation — 600 foot long snowmaking header Drive will indirectly decrease its carbon Crystal Mountain Resort pipe to reduce water pressure dioxide emissions by 4,945 tons over Crystal Mountain is swapping-out friction losses, especially at full the lifecycle of the fixtures. During that nearly 250 light fixtures that burned snowmaking flow which can be as same period, Cone Drive will reduce 150 watt incandescent light bulbs high as 6000 gallons per minute. 20 tons of sulfur dioxide and seven to those that will use 13 watt LEDs, The same water flow can be tons of nitrogen oxides, according to saving nearly 70,000 kilowatt hours delivered for about 200 less pumping the Environmental Protection Agency. every year, and switched out to a horsepower. It also enables Crystal 19 The greenhouse gas emission While the focus of our initiatives sustainable energy. Specifically, the reductions are the air-scrubbing is the environment, the institution 8,000 watt solar electric (photovoltaic) equivalent of a 69-acre forest or also realizes savings from the generator produces enough electricity removing 61 cars from the road, implementation of innovative business to power an average of 1.5 homes. according to the EPA. The emission models geared toward environmental Through the use of net metering, reductions also equate to saving stewardship. Recent savings NMC sells what is not used on 31,081 gallons of gasoline every year. (2012) from the reduced kWh usage campus back to Traverse City Light (replacing lighting) reached $72,993 and Power. This illustrates that solar As if the environmental savings weren’t for one year. NMC’s total utility energy production works well in enough, the company is expected savings for 2009/2010/2011/2012 Northern Michigan and also helps to slash its light-related electricity equals $282,780. (This figure NMC build stronger community costs by 57 percent, from $50,554 to includes electrical, natural gas, relations on behalf of our students less than $21,940 a year because of and water/sewer costs.) the reduced energy consumption. Local Government — Grand NMC’s energy efficiencies increase Traverse County According to Orion, its high-efficiency partnerships both internally Grand Traverse County has made technology cuts light-related energy and externally. Through NMC’s energy efficiency part of the Capital consumption by 50 percent or more, Environmental Sustainability Improvement Program from the first while providing about 50 percent Committee (ESC), representatives County Energy Audit conducted in more light than traditional, high- from all employee and faculty groups 1995. More recently, the County intensity discharge (HID) fixtures. are represented as well as student received grant funding through the (Source: Traverse City Business groups. This committee is charged American Recovery Act Energy News, September 2010, Vol. 17, No. 2) with promoting and supporting Efficiency and Conservation Block environmental initiatives, while Grant (EECBG) and the NWMCOG Educational Institutions — NMC serving as a resource to the campus Local Government Energy Program One of Northwestern Michigan and community. By implementing to expand its energy reduction College’s values is that, “we will each projects and providing informed initiatives. In many cases, the County practice responsible stewardship for policy recommendations, the ESC worked with the City of Traverse the human, physical, financial and strives to foster a sense of social City and Traverse City Light & Power environmental resources entrusted responsibility and commitment to the (TCLP) to make the improvements. to our care.” With that in mind, in ideals of environmental sustainability. The projects included lighting the spring of 2010, NMC started Committee members and volunteers improvements, solar energy system several environmental sustainability value the spirit of collaboration installation, boiler replacement, initiatives to reduce our energy usage. and a proactive approach to and pump improvements. One of the most successful of these making a positive difference for County buildings at West Front endeavors was upgrading our internal the environment and developing Street, Civic Center, Twin Lakes, and external lighting systems on all environmentally sustainable programs the joint County-City Governmental campuses. The first phase of the that are aligned with the institution’s Center, and City Fire Stations, Public project was completed in September mission, vision and values. Services Garage, Water Treatment 2012. The environmental impact of our and Wastewater Treatment Plants lighting changes alone is the equivalent A windmill at the University Center were upgrading with high efficiency of adding 60 acres of forests, and Campus and a solar array at the building lighting. A variable removing 42 cars from the roads. Aeropark Campus are examples frequency drive was installed at of applied learning in the area of the City Water Treatment Plant and

CONE DRIVE’S GREENHOUSE GAS EMISSION REDUCTIONS ARE EQUIVALENT TO:

THE AIR-SCRUBBING REMOVING 61 CARS SAVING 31,081 GALLONS OF EFFECTS OF69 ACRES FROM THE ROAD GASOLINE PER YEAR OF FOREST 20 the Civic Center Walking Track An additional bonus from the lighting and Kid’s Kove playground lights upgrade is the lower heat discharge, The whole house received new were replaced with LED lights, as keeping the building and, importantly, insulation, from basement to well City streetlights with an LED the ice cooler. One of the variables attic crawl spaces, making the Demonstration Project through TCLP. considered is the variable occupancy house very comfortable this past The combined annual savings rate during the day and season. winter without any need for the of all these projects is furnace and the kids were able approximately $83,500. Schools — Traverse City Area to sleep upstairs without hats. While these project were funded Public School (TCAPS) through grant programs which are no Traverse City Area Public Schools Cindy Anderson and Evan Smith longer available, there is significant have developed a systematic live in a 107 year old Victorian in the opportunity to achieve cost saving by approach to addressing energy historic Oak Park neighborhood. local governments self funded energy efficiency improvements. A blower test and energy audit efficiency improvements, especially revealed inadequate insulation in high-efficiency lighting, that are worthy TCAPS participated in the Rebuild the attic and in crawlspaces, very of consideration, analysis, and action. Michigan program, School and few vents in the attic to allow hot Local Government Energy Initiative air to escape, the shingles on the The Grand Traverse County (SLGEI) in 2007 and completed old roof were worn out and needed Department of Public Works, a an initial energy evaluation and replacing and the house was drafty cooperative venture among Grand implementation funding. and needed better seals; air leaks Traverse County, the Townships of raised Cindy and Evan’s energy bills Acme, Blair, East Bay, Elmwood, TCAPS has taken advantage of and made the house uncomfortable. Garfield, and Peninsula to maintain TCLP’s Energy Optimization program, The roof was replaced using Energy- the regional wastewater collection including receiving $6,436.16 in Star-rated shingles, four new air system, has a service facility on rebates in 2011 with an annual vents opened in attic for a total of Welch Court, off South Airport Road. anticipated savings of 96,921 kWh. five, new insulation was added and In 2012, a lighting upgrade from old insulation was replaced, and air 400w HID to T8 fixtures provided Recently, the TCAPS Board of sealing improved to reduce drafts. an immediate reduction of 38% in Education approved a $342,315 Cindy and Evan experienced major kilowatt hour energy usage. This contract for the installation of new improvements in heating and air reduction was not affected by any high efficiency lighting systems in four conditioning efficiency and comfort behavioral activities or other variables elementary schools: Blair, Courtade, in both summer and winter. in the facility. This governmental Silver Lake, and Westwoods. entity had a simple payback of just Chris and Elizabeth Kushman less than two years after our rebate Residential — TC Saves have lived in their 115 year old was applied. Another added benefit The TC Saves residential program Victorian for two and a half years. noted by the staff at this facility was in provides direct support—including The house lost lots of heat during the building was brighter, allowing for home energy assessments, winter through the attic, visible as safer working conditions for the staff. incentives and access to affordable icicles on the roof and the house loan options—to Traverse City was drafty and uncomfortable. Recreation - Centre Ice homeowners looking to make their Center ICE is a major recreation facility homes more energy efficient. Air sealing was improved to reduce with two ice rinks, fitness center, drafts, and insulation was installed store, snack shop, and offices, built TC Saves shared the experiences of in attic, basement walls, and main and operated by a coalition of not- three homeowners that participated house walls from a product made for-profit groups and is home to the in the TC Saves program. from recycled newspaper and made Detroit Red Wings training camp. in Michigan. The house is much more Centre Ice had not considered energy The Schmidt family lived in 115 year comfortable and the Kushmans’ utility efficiency improvements but was one old Victorian in the historic Oak bills are down. As an experiment, of the first facilities to take advantage Park neighborhood since November the Kushmans measured units of of the Cherryland Electric Cooperative 2006. The house’s insulation had gas used per heating degree day Energy Optimization Rebate Program never been upgraded and was over the winter and compared it to (EO) in 2009. They chose to upgrade letting lots of heat escape. A free- previous measurements, a method their lighting from the 1000w HID to a standing wood stove near the living that allowed them to take into account T5 fixture in the skating rinks, resulting area, the Schmidts’ primary heating the mild weather last winter. They in an average savings of 9% each source, was close enough to the found that overall gas consumption year, from both the lower wattage on thermostat to keep the furnace off had decreased by at least a third. the lighting and reduced operating during the winter, but wasn’t sufficient time from the shorter startup period. to heat the rest of the home. 21  Summary

This Northwest Michigan Regional The Regional Energy Plan attempts commercial businesses, as well as Energy Plan hopes to provide a to outline the key factors in our citizens throughout the Region that regional roadmap for a resilient energy future, provide a framework make energy choices every day. energy future for the region. for decision makers when considering energy choices and The Northwest Michigan Regional This Plan is the first Energy Plan options, and supply information Energy Plan will be shared with prepared in Northwest Lower on initiatives to foster energy local governments and interested Michigan, and is intended to serve as efficiency and renewable energy. parties throughout the region and is a foundation for future efforts. The intended to launch new initiatives for Regional Energy Plan is not intended The primary target audience is the region’s citizens, businesses, and to be a consensus on the optimal mix local governments within the local governments to work together of energy resource and efficiency Northwest Lower Michigan region. toward a resilient energy future. investments. The diverse geography, However, there are a number of key capacity, needs, and options players and stakeholders whose of the communities throughout participation and effort is critical, the Region make such a unified including utilities, energy service consensus approach impractical. providers, institutions, industrial and

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