Passage of Proposal 3, the 25 percent renewable energy mandate, will cause electricity costs to rise an additional $187 million a year or $5.6 billion over 30 years, according to an Anderson Economic Group study commissioned by the Small Business Association of Michigan (SBAM).
“Michigan small business owners, who in 2012 are finally taking steps toward economic recovery, are dismayed by the prospect of a steep increase in the cost of electricity,” says SBAM President and CEO Rob Fowler. “Higher electricity costs will make it more difficult for entrepreneurs to remain profitable, create jobs and invest in their communities.”
The study projects that Michigan’s economy will suffer a net loss of 1,600-1,700 jobs a year due to the higher electricity costs.
The study also finds fault with the energy restrictions that Proposal 3 would enshrine in the Michigan Constitution. It would define renewable energy sources as being wind, solar, biomass and hydropower only, thus diverting investment away from other renewable energy sources and away from investment in improving efficiency. Proposal 3 also restricts electricity suppliers from buying cheaper renewable sources outside the state.
“Michigan currently has a strong law ensuring that a significant portion of our state’s energy portfolio utilizes renewable sources of energy,” says Fowler. “We shouldn’t lock into the Constitution anyone’s preconceived ideas about the proper mix of our energy sources. Given the volatile nature of energy pricing and new technologies for extracting clean-burning energy, Michigan can’t afford to be inflexible about power sources. Approval of Proposal 3 would cement that inflexibility into our Constitution.”
SBAM represents more than 17,000 small business owners in Michigan.