Future of Energy

Article originally appeared in Traverse City Record Eagle.
Energy, transportation, and packaging can be high costs for a business. As these costs continue to increase and uncertainty grows, it's important for businesses in our region to look at how to best utilize all available resources and options.
The Traverse City Area Chamber of Commerce works to be a convener to help identify best practices and opportunities. A recent example is DTE Energy's pursuit of a natural gas vehicle fueling station in Traverse City. To the Chamber, it made sense to see what other organizations could benefit from this opportunity, and how it could play a role in the Chamber's objective to keep more money flowing in the region versus exporting it elsewhere.
The Chamber commissioned a study with funding from DTE to look at two of the area's largest transportation providers: Traverse City Area Public Schools and Bay Area Transportation Authority. The  six-month process reviewed current costs for both TCAPS and BATA and compared those costs to best practices used by other agencies around the country. The recently released report found that 20 percent of transit fleets in the United States are using compressed natural gas (CNG) and that more than 2,800 school busses had already been converted to CNG in other districts.
The report looked out 10 years at costs of busses, fuel, infrastructure changes to maintenance facilities, and the cost for a fueling station. The report showed that after an initial capital outlay for the fueling station, both TCAPS and BATA will see savings on fuel costs. These savings will materially impact the daily expenses and services provided by both agencies.
Does conversion work? The Blue Water Transit operation in Michigan's thumb converted its fleet to CNG and saw immediate savings on fuel costs. In other areas around the state DTE has installed more than 16 fueling stations. It's using in excess of 200 CNG vehicles in its own fleet and working to provide fuel for fleets of other businesses.
What's next for developing a CNG station in northern Michigan? Both TCAPS and BATA need to work on a timetable and commitment to phasing in the purchase of CNG vehicles. The report showed that for best cost savings these purchases should be part of the regularly budgeted replacement of current vehicles.
The Chamber believes that there is opportunity in times of economic uncertainty. That means looking at all of the resources available. The Chamber and several of its community partners see the potential conversion of fleets to CNG as one step in the right direction. However, each organization realizes more needs to be done to ensure a reliable energy future. To that extent, the Chamber's collaborative energy policy continues to be relevant and — working with its partners — the Chamber will continue to seek ways to best utilize available resources and develop the region's energy future.

Off-Shore Wind Farms in Michigan's Future?

Story first appeared in the Detroit News.

The Michigan Governor has the right perspective on off-shore wind energy. It's important to keep in mind there are significant technical and cost barriers that make it impractical as an energy source right now.

As Michigan enters into a multi-jurisdictional compact to investigate what's involved in building giant wind turbines on the lakes, it must avoid the temptation to risk a lot of state money on what could turn out to be an albatross. The market, free of undue government influence, should decide if off-shore wind farms are a worthwhile investment.  They should also consider the legalities of the movement, say Orlando Environmental Lawyers.

The potential is there, in theory. Michigan, with thousands of square miles of Great Lakes waters in its jurisdiction, could get significant power from wind turbines covering less than 100 square miles, according to a 2008 consultants' report contracted by the Michigan Economic Development Corporation.

But the best-known such project in the U.S, to date -- a billion-dollar wind farm of more than 100 turbines off the coast of Massachusetts -- will produce energy that costs way more than Michiganians are accustomed to paying.

Michigan, four other Great Lakes states, the U.S. Coast Guard and other federal agencies are talking about regulations that would apply to such an industry. Their agreement doesn't call for the creation of any regulations, but requires the various agencies to discuss rules they already have that would affect wind projects.  Environmental Lawyers in Charleston are intrigued by the proceedings.

It's timely and appropriate, considering that a few companies are weighing the pros and cons of this kind of an investment. Should one or more of them decide to take the leap, governing agencies here and in Washington, D.C., can best help by having one clear-cut set of rules. Costs balloon when a business has to negotiate a conglomeration of regulations involving multiple levels of government.

Michigan's public universities and other organizations are doing cutting-edge research that could solve technology and cost issues that make off-shore wind generation a prohibitive challenge. As he notes, it makes little sense to develop a new regulatory framework for the prospective industry unless those drawbacks can be overcome.

The state, meanwhile, has to steer clear of subsidies or mandates that would spur the development of off-shore energy while increasing utility rates for homeowners, industries and commercial businesses.  St. Louis Environmental Lawyers agree with this assessment.

Projected power rates from off-shore wind projects in the U.S. and Canada are double those for energy from on-shore wind generation, says the Michigan Chamber of Commerce, which is supportive of investigating its potential. And on-shore wind energy costs considerably more than power from such traditional sources such as coal and natural gas.

Michigan has a law requiring that 10 percent of its energy come from renewable sources by 2015, the added cost of which is capped at $3 a month per residential customers, $16.58 a month for commercial customers and $187.50 a month for industrial users. Petitions are being circulated for a ballot issue that would drive up those surcharges by ramping up the requirement to 25 percent.

The state needs to avoid additional mandates, but clearly can benefit from a discussion of off-shore wind generation with other states and Uncle Sam. It's always a good idea to be prepared.

For more local and Michigan business related news, visit the Michigan Business News blog.