How Election 2012 affects energy policy

Today voters across the United States cast ballots in the 2012 general election. At stake are a broad range of political offices, ranging from the presidency to local municipal roles. How will the election's outcomes affect energy policy, energy-related businesses, and consumers?

The presidential contest has drawn the greatest attention over the past year. Whether President Obama will retain his office or Governor Romney will take the White House is the largest question. Based on the candidates' past actions and current campaign platforms, voters have some sense of how each would exercise his presidential powers. On energy issues, both candidates appear to favor increased domestic production of natural gas and oil. The candidates differ in their philosophies on the role of governmental incentives and subsidies -- whether for fossil fuel production or for renewable electricity generation -- and on emissions regulations for coal-fired and other power plants. The candidates also disagree on specific energy projects and programs ranging from the Keystone XL pipeline to the Navy's Great Green Fleet biofuels initiative.

Beyond the presidency, federal elections will determine the composition of Congress. While energy policy is more sensitive to presidential changes than to individual congressional elections, the makeup of Congress drives federal energy policy in the aggregate. All seats in the House of Representatives are up for grabs, as are a third of Senate seats. Of the 33 Senate seats, Democrats need to win 21 seats to retain their majority while Republicans need to win 14 seats to take control. The senators elected in 2012 will participate in setting any national energy policy.

State elections will also shape energy policy for the coming years. Voters will select governors in 11 states, and state legislative offices are widely contested. While federal energy policy draws the most attention, the U.S. federalist system leaves significant authority to individual states to set their own policies on energy issues. For example, states may establish electric renewable portfolio standards or otherwise regulate the resource mix used to produce usable energy. The outcomes of state elections will also affect policies on energy efficiency, smart meters and smart grid infrastructure.

Voters in some states will also cast ballots on measures directly affecting energy policy, such as the Michigan citizens' initiative seeking to increase utilities' use of electricity produced by renewable resources.

It may be some time until all the ballots are finally counted, but by tomorrow night we will have a better understanding of the results for most of the races and ballot questions. Those who can translate the election results into an understanding of future policies - and business opportunities - will have a leg up on the competition.

Will Michigan vote for renewable energy as a constitutional amendment?

Voters will decide a broad slate of issues in the upcoming U.S. elections on November 6, including many that address energy policy.  Questions range from who will serve as president to the role of government in managing the mix of energy resources used to power society.  In several states, voters will decide whether to increase renewable energy mandates.  One example of such a question is Michigan Proposal 3, a citizen-initiated ballot measure that would mandate that 25% of the state's electricity must come from renewable resources by 2025.
Under current law, Michigan's renewable portfolio standard requires electric suppliers to procure at least 10 percent of electricity from renewable sources such as wind, solar, hydro and biomass by 2015.  If enacted, Proposal 3 would increase this RPS requirement to 25% by 2025, and limit the impact of the requirement on electric rates to no more than a 1% annual increase.

The official text of Proposal 3 reads:

PROPOSAL 12-3
A PROPOSAL TO AMEND THE STATE CONSTITUTION TO ESTABLISH A STANDARD FOR RENEWABLE ENERGY
This proposal would:

• Require electric utilities to provide at least 25% of their annual retail sales of electricity from renewable energy sources, which are wind, solar, biomass, and hydropower, by 2025.
• Limit to not more than 1% per year electric utility rate increases charged to consumers only to achieve compliance with the renewable energy standard.
• Allow annual extensions of the deadline to meet the 25% standard in order to prevent rate increases over the 1% limit.
• Require the legislature to enact additional laws to encourage the use of Michigan made equipment and employment of Michigan residents.

Should this proposal be approved?
YES __
NO ____

The effort to place this question on the ballot has been led by a group called Michigan Energy, Michigan Jobs.  Supporters project that the amendment would help the local economy by creating over 40,000 jobs and attract $10 billion in new investments, as well as promoting public and environmental health.  Opponents, including a group called the Clean Affordable Renewable Energy for Michigan Coalition or (CARE) argue both that the increased renewable mandate would cost too much and that such a measure does not belong in the state constitution.

How will Michigan voters respond to this issue?  We will find out within the next week.