NEW REPORT: Clean Energy Legislation Will Lower Energy Costs and Bring Billions in Federal Investment to Michigan

New Modeling Shows How Michigan Can Secure Billions of Federal Dollars, Lower Household Energy Costs, and Create Jobs

Detroit, MI — Today, 5 Lakes Energy released “The Michigan Clean Energy Framework,” a new independent modeling report. For the first time, new modeling details the potential impact of enacting significant new climate policies in Michigan this year: lowering household energy costs, creating jobs, and bringing in billions in federal investment to Michigan communities. The report was unveiled at an event in Detroit Thursday by Evergreen Action and the Energy Innovation Business Council alongside Lt. Governor Garlin Gilchrist, state legislators, and a wide range of business and environmental stakeholders. The event took place at Walker-Miller, one of the largest African American and woman-owned energy efficiency companies in the United States.  

The report analyzes policies closely resembling legislation introduced earlier this year, including a 100 percent clean energy standard, an increased energy waste reduction target, and electricity rate modifications enabled by a bill that would allow the Michigan Public Service Commission (MPSC) to regulate utilities based on energy affordability, reliability, and climate considerations. These policies are crucial to achieving the carbon neutrality and emission reductions goals in Gov. Gretchen Whitmer’s MI Healthy Climate Plan

The modeling projects that The Michigan Clean Energy Framework would contribute to an economic boom in the state, resulting in:

  • The creation of nearly 160,000 jobs 
  • Lowering household energy costs by at least $145 a year 
  • $5.3 billion more in federal funding from the Inflation Reduction Act this decade, and $7.8 billion more in investment by 2050, more than double what Michigan would receive without enacting these policies. 

But the urgent passage of these policies is crucial to locking in these benefits. By delaying action even a year, the state would forfeit $1 billion that could otherwise be directly invested in Michigan’s businesses and communities. 

The policies modeled, which also align with the goals of the MI Healthy Climate Plan, include:

  • Clean energy: Transitioning Michigan’s electricity generation energy mix to 100 percent carbon-free sources by 2035
  • Energy waste reduction: Increasing Michigan’s energy waste reduction targets to 2 percent electric efficiency and 1.5 percent gas efficiency annually
  • Transportation electrification: Increasing vehicle electrification across Michigan in line with federal clean car rules and by using state and federal incentives like electric vehicle (EV) tax credits, charging infrastructure funding, and EV manufacturing tax credits
  • Building electrification: Steadily increasing building electrification—achieving full electrification of new sales of appliances, heating and cooling systems, and other building systems by 2040
  • Industrial decarbonization: Companies decarbonizing major industries in Michigan using IRA tax credits and Gov. Whitmer’s proposed Onshoring Clean Energy Supply Chain Tax Credit

On top of significant economic benefits, transforming Michigan’s energy sector will prevent nearly 1,000 premature deaths and save the state $8.3 billion in public health costs. Detroit and its surrounding areas are home to some of the worst air quality in the country due to neighboring polluting power plants and industrial processes. Transitioning Michigan’s energy sector to clean energy will result in safer homes, cleaner air, and longer lives for Michiganders. Additionally, the movement away from natural gas will stabilize the state’s long-unreliable power grid and reap a net savings of $5.5 billion in energy costs for Michiganders by 2035. 

The report also includes case studies detailing how clean energy businesses in Michigan are responding to state and federal policy. These case studies, prepared by the Michigan Energy Innovation Business Council, demonstrate that the pending clean energy legislation could catalyze robust operations expansions and local job growth if passed. 

“When we bring people together to address the climate crisis, we can make bold bets on our communities, our economy, our talent, and our people,” said Lt. Governor Garlin Gilchrist II. “This report demonstrates that passing climate legislation pursuing the goals of our MI Healthy Climate Plan will lower costs, create over 150,000 new jobs, protect our air, land, and water, and draw down billions in federal funding. Governor Whitmer and I are committed to building on our work to make Michigan a national climate leader and giving future generations a better, stronger, more sustainable world.” 

“This report shows the strong synergy between the federal Inflation Reduction Act and Bipartisan Infrastructure Law and Governor Whitmer’s MI Healthy Climate Plan,” said Douglas Jester, 5 Lakes Energy managing partner. “With this combination, it is easier for Michigan to advance clean energy and do our part to address climate. By doing so with the assistance of federal tax credits and grants, we can significantly grow Michigan’s economy.”

“Every single Michigander deserves reliable, affordable energy. Full stop. And historic levels of  federal funding can make that possible. But we need to act now to ensure that Michigan businesses, workers, and families reap the full benefits of this once-in-a-generation opportunity,” said Rep. Donavan McKinney (14th House District). “In addition to improving Michigan’s energy grid, funding from the Inflation Reduction Act and Governor Whitmer’s MI Healthy Climate plan can make clean energy such as solar more affordable for low-income households across our state and ensure that everyone’s included in the clean energy transition—no matter their income or zip code.”

“The passage of clean energy legislation must be a top priority when the legislature reconvenes this fall. From power outages to extreme heat, Michiganders’ public health and quality of life depends on addressing climate change,” said Sen. Stephanie Chang (3rd Senate District). “The report released today shows the incredible opportunity we have to utilize federal investments to have a direct impact on public health and put money back into families’ pockets, including those in environmental justice communities who are disproportionately impacted by pollution and outdated infrastructure. These bills will begin to set our state on a path to a cleaner, healthier future."

“Businesses across Michigan are hiring and expanding their operations in direct response to federal opportunities,” said Dr. Laura Sherman, Michigan Energy Innovation Business Council president. “It is clear that passing clean energy legislation at the state level will further unlock opportunities to create jobs, grow our state GDP, and attract more companies to Michigan.” 

“State action on clean energy will help businesses like Walker-Miller expand our operations and hire more team members for well-paying jobs that will contribute to a more equitable, healthier, and more prosperous Michigan future,” said Carla Walker-Miller, founder and CEO of Walker-Miller Energy Services. “We’re proud that Walker-Miller is investing in our communities and helping people save money on their electric bills every day. Local businesses across the state are waiting at the ready for the opportunity to expand and boost the economies of their communities. We look forward to working with Michigan leaders to make that robust clean energy future a reality. ” 

“Diversifying Michigan’s energy grid will boost local economies and empower Michiganders by giving households and communities the freedom to take their power into their own hands,” said Angana Shah, Michigan United policy manager. “Michiganders deserve clean air to breathe, clean water to drink, quality jobs, affordable power, and an affordable, safe place to live. An equitable clean energy economy is possible—and right at our fingertips. Let’s secure that future for Michigan families and our beautiful, uniquely situated state.”

“Michiganders want and deserve a clean energy future. And that future is possible—but only if the legislature seizes the moment and passes these meaningful climate and clean energy policies,” said Courtney Bourgoin, Evergreen Action Midwest senior policy and advocacy manager. “At this moment, the state has the opportunity to leverage federal investment into the economy, develop a clean energy workforce, and upgrade its energy system. We look forward to the swift passage of these policies and the state’s continued dedication to bold climate action.” 

"We're now seeing a race to the top in this new energy economy. Michigan has already brought in billions of dollars for clean energy work in the past year, but will have to be a bold leader to keep moving up in that race,” said Jacob Corvidae, principal at RMI. "This report shows the large value the state can capture with a set of proven strategies."

Read the full report here.