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Policies to Overcome Barriers for Renewable Energy Distributed Generation: A Case Study of Utility Structure and Regulatory Regimes in Michigan

Author

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  • Emily Prehoda

    (Department of Social Sciences, Michigan Technological University, Houghton, MI 49931, USA)

  • Joshua M. Pearce

    (Department of Material Science & Engineering and Department of Electrical & Computer Engineering, Michigan Technological University, Houghton, MI 49931, USA
    Department of Electronics and Nanoengineering, School of Electrical Engineering, Aalto University, FI-00076 Espoo, Finland)

  • Chelsea Schelly

    (Department of Social Sciences, Michigan Technological University, Houghton, MI 49931, USA)

Abstract

Because of its environmental damage and now often being the most expensive source for electricity production, coal use is declining throughout the United States. Michigan has no active coal mining and seemingly supportive legislation for distributed generation (DG) and renewable energy (RE) technologies. However, Michigan still derives approximately half of its power production from large centralized coal plants, despite the availability of much lower cost RE DG technologies. To understand this conundrum, this study reviews how Michigan investor owned utilities utilize their political power to perpetuate utility structures that work toward the financial interests of the utilities rather than the best interests of the state’s electricity consumers, including other firms and residents. Background is provided covering the concept of DG, the cost savings associated with DG, and utility regulatory regimes at the national, regional, state, and local levels. Recent case studies from specific utility strategies are provided in order to illustrate how Michigan utilities manipulate regulatory regimes via policy misinterpretation to deter or hinder the proliferation of DG in favor of maintaining the existing interests in centralized, fossil fuel-based electrical energy production. The results of this study demonstrate how DG proliferation is hindered by Michigan regulated utilities via the exercise of political power within existing legal and regulatory regimes. This highlights the need to think about how utilities may interpret and implement rules when designing energy legislation and policy to maximize the benefits for consumers and society. Policy recommendations and alternate strategies are provided to help enhance the role of energy policy to improve rather than limit the utilization of RE DG.

Suggested Citation

  • Emily Prehoda & Joshua M. Pearce & Chelsea Schelly, 2019. "Policies to Overcome Barriers for Renewable Energy Distributed Generation: A Case Study of Utility Structure and Regulatory Regimes in Michigan," Energies, MDPI, vol. 12(4), pages 1-23, February.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:4:p:674-:d:207415
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    2. Joshua M. Pearce & Nelson Sommerfeldt, 2021. "Economics of Grid-Tied Solar Photovoltaic Systems Coupled to Heat Pumps: The Case of Northern Climates of the U.S. and Canada," Energies, MDPI, vol. 14(4), pages 1-17, February.
    3. Martin Libra & Milan Daneček & Jan Lešetický & Vladislav Poulek & Jan Sedláček & Václav Beránek, 2019. "Monitoring of Defects of a Photovoltaic Power Plant Using a Drone," Energies, MDPI, vol. 12(5), pages 1-9, February.
    4. Peffley, Trevor B. & Pearce, Joshua M., 2020. "The potential for grid defection of small and medium sized enterprises using solar photovoltaic, battery and generator hybrid systems," Renewable Energy, Elsevier, vol. 148(C), pages 193-204.
    5. Amrutha Raju Battula & Sandeep Vuddanti & Surender Reddy Salkuti, 2021. "Review of Energy Management System Approaches in Microgrids," Energies, MDPI, vol. 14(17), pages 1-32, September.
    6. Gorjian, Shiva & Bousi, Erion & Özdemir, Özal Emre & Trommsdorff, Max & Kumar, Nallapaneni Manoj & Anand, Abhishek & Kant, Karunesh & Chopra, Shauhrat S., 2022. "Progress and challenges of crop production and electricity generation in agrivoltaic systems using semi-transparent photovoltaic technology," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    7. Pascaris1, Alexis S. & Schelly, Chelsea & Rouleau, Mark & Pearce, Joshua M., 2021. "Do Agrivoltaics Improve Public Support for Solar Photovoltaic Development? Survey Says: Yes!," SocArXiv efasx, Center for Open Science.
    8. Chelsea Schelly & Don Lee & Elise Matz & Joshua M. Pearce, 2021. "Applying a Relationally and Socially Embedded Decision Framework to Solar Photovoltaic Adoption: A Conceptual Exploration," Sustainability, MDPI, vol. 13(2), pages 1-18, January.
    9. Rittick Maity & Kumarasamy Sudhakar & Amir Abdul Razak & Alagar Karthick & Dan Barbulescu, 2023. "Agrivoltaic: A Strategic Assessment Using SWOT and TOWS Matrix," Energies, MDPI, vol. 16(8), pages 1-18, April.
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    12. Adewale A. Adesanya, 2021. "Can Michigan’s Upper Peninsula Achieve Justice in Transitioning to 100% Renewable Electricity? Survey of Public Perceptions in Sociotechnical Change," Sustainability, MDPI, vol. 13(1), pages 1-25, January.

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    More about this item

    Keywords

    distributed generation; energy policy; renewable energy; electric utilities; utility regulation;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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