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Mich. utilities agree to 25% renewable target in deal to end ballot campaign

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Mich. utilities agree to 25% renewable target in deal to end ballot campaign

Michigan's two largest electric utilities have agreed to meet at least 25% of their energy demand through renewables in a deal that would end a push by billionaire environmentalist Tom Steyer for a state ballot initiative.

Under the agreement, Consumers Energy Co. and DTE Energy Co. said May 18 that they would commit to pursue a 50% clean energy goal, with at least 25% coming from renewables and the remainder coming from energy efficiency. The utilities are currently required to supply 15% of their energy from renewables by 2021.

In exchange, the Steyer-backed group, Clean Energy, Healthy Michigan, dropped a proposed ballot initiative to raise the state's renewable target to 30% by 2030.

"Our two companies are overwhelmingly in favor of renewable energy and are focused on bringing additional energy efficiency opportunities to our customers," DTE Energy Chairman and CEO Gerry Anderson and Consumers Energy CEO Patti Poppe said in a joint statement. "We will continue to work within the framework put forward by our legislature and regulators to build on our environmental initiatives to benefit all residents of the state.”

The agreement comes as the clean energy group faced a deadline at the end of May to gather enough signatures to put the topic on the November ballot. The group had obtained more than 350,000 signatures, it said.

John Freeman, a campaign manager at Clean Energy, Healthy Michigan, told S&P Global May 18 his group is confident that the goal will be enforced given that the utilities committed to the target in a joint statement and said they will detail how they plan to achieve the 50% target in their integrated resource plans. "The [Michigan] Public Service Commission has jurisdiction in overseeing the integrated resource plan and the goals contained within them," Freeman added.

A state law adopted in 2016 requires the state's power companies to file integrated resource plans, or IRPs, to show what supply resources the utilities will use to meet projected demand. Consumers Energy is due to file its integrated resource plan by June 15 and DTE is due to file its plan by March 29, 2019.

Clean Energy, Healthy Michigan is backed by climate action lobbying group NextGen America, which was founded by Steyer.

"With this agreement, Michigan has become a national example of how consumers, public interest advocates and energy companies can work together to find real solutions to combat climate change," Steyer said in a statement.

NextGen Climate has similar ballot initiatives to raise state renewable targets in Nevada and Arizona, Freeman said.

In Arizona, Clean Energy for a Healthy Arizona is petitioning to put a 50% renewable target by 2030 on the state ballot. The group has until July 5 to gather enough signatures in support, according the state's website. The initiative has garnered opposition from Arizona Public Service Co., a subsidiary of Pinnacle West Capital Corp., which claims the initiative could sap business from the 4,000-MW Palo Verde nuclear plant, of which it owns a 29% stake.

Another group, the Nevadans for a Clean Energy Future, is also pushing for Nevada to subscribe to a 50% by 2030 renewable target, up from its target today of 25% by 2025. The group has until June 19 to gather of enough signatures.

Michigan currently requires 35% of its overall power to come from a combination of energy efficiency and renewables by 2025. In 2017, DTE Energy set a goal to cut its carbon emissions by 80% by 2050 and committed to replace coal capacity with gas and renewables generation. In February, Consumers Energy committed to a similar 80% by 2050 carbon reduction goal.