Michigan, Illinois, New York consider school alternative energy incentives

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Laker Elementary School in Michigan borrowed money for a windmill project.

Laker Elementary School in Michigan received a state grant for a windmill project. Photo: Jeff Kart

By Theresa Gasinski, gasinsk1@msu.edu
Great Lakes Echo
May 21, 2009

The Michigan Legislature may soon create a fund to loan schools money to build windmills, solar panels or other sources of alternative energy.

Elsewhere in the Great Lakes region, lawmakers in Illinois and New York have introduced similar legislation.

Some ideas within the Michigan bills to integrate wind energy into schools were written by Cory Connolly, an international relations junior at Michigan State University. Connolly is senior fellow for energy and the environment at the MSU Roosevelt Institution, a public policy research group that is part of a larger nonprofit with student chapters nationwide.

State Rep. Paul Opsommer, R-Dewitt, used parts of Connolly’s policy memo in a bill introduced in the House, which was duplicated and sent to the Senate. Both bills are in committee.

Participating schools would produce their own alternative energy. And the bills allow them to connect to the electric grid, a complex of distribution and transmission lines within an electric utility company’s region. “The transmission lines send it [electricity] in really big amounts, and distribution lines are meant for cities and things like that,” Connolly said.

Generally, only a larger power generator created by a utility company, such as a coal plant, can distribute energy throughout a region.

The legislation also requires utility companies to credit schools’ utility bills for energy the school produced but did not use. Schools would receive the credits at the end of the month, and use them to offset parts of their energy bills. Using an alternative source of renewable energy would also lower monthly energy costs.

Initially, the monthly savings would repay the government loan for a period determined by the scope of the program. “The pay back period is anywhere from four to 13 years, that I’ve seen,” said Connolly, who studied wind energy programs that schools in Iowa had implemented.

In New York, pending legislation would allow school districts to issue bonds to fund alternative and renewable energy sources for school facilities. The Illinois bill would create a School Wind and Solar Generation Program. This program would provide low-interest loans to both school and community college districts, to fund wind and solar projects.

As the Michigan bills stand now, the fund must have a minimum of $10 million before schools can begin borrowing. The Michigan Public Service Commission, the agency which regulates energy, will issue the loans. The schools would have between 20 and 30 years to pay back the loan, with no interest.

The Public Service Commission would decide the amount of money each school receives. “The school would have to put together a proposal that MPSC believes would make sense,” said Greg Ostrander, a policy adviser for Opsommer. “There’d have to be some due diligence up front.”

For now, there are no limits on the amount of money a school can receive. “It’s hard for us to know, for example, how much money the school is going to be able to save in energy dollars and how much the system is going to cost,” Ostrander said.

A similar fund already exists within Michigan. The low income energy efficiency fund, or LIEEF, provides energy efficiency assistance to reduce the bills of low-income customers, and promotes energy efficiency among all customer classes.

The Public Service Commission could loan LIEEF funds, stimulus dollars or create other avenues for the school program, Ostrander said. “It’s not restricted in any way. The current intent is not to raise taxes in any way to fund this. It’s to take program money that’s already there.”

In 2007, the Laker School District, which covers Elkton, Pigeon and Bay Port, received a $265,000 grant from LIEEF to create its own alternative energy program. They are one of the only school districts in Michigan to experiment with such a program.

The district uses three refurbished 65-kilowatt wind turbines, and a larger 100-kilowatt turbine. It also has a biodiesel processor and a seed oil press, all used to generate energy to power the school.

Building wind turbines on school property integrates hands-on science learning into the curriculum and has economic and environmental benefits, said Kathy Dickens, the junior high school student services director who started the program. “Our primary focus was educational, but with the hope of saving money.”

Unfortunately, “interconnecting obstacles are not making [the program] a money maker,” Dickens said. Such obstacles include cumbersome amounts of paperwork, costly fees and unequal energy exchange rates.

Connolly hopes the legislation will ease such obstacles and encourage other school districts to experiment with alternative energy.

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