Michigan Institute Calls for Feed-in Tariffs at Municipal Utility

By Paul Gipe


The Michigan Land Institute has proposed that Traverse City Light & Power implement a system of feed-in tariffs to wean the municipal utility from its dependence on coal.

Traverse City Light & Power is a municipal utility serving the small town of 15,000 in the “little finger” of Michigan’s Lower Peninsula. Traverse City is the largest town in a 14-country region. The utility is better known for installing one of the first, if not the first, municipally-owned, commercial-scale wind turbines in 1996. The utility has done little with renewable energy since that pioneering project.

The Institute, a Traverse City non-profit, urged the utility’s board of directors to both implement an aggressive program of energy efficiency and launch a program to develop clean sources of energy, including wind, solar, and biomass.

The Land Institute’s recommendations are contained in a report titled 20-20 by 2020: a Clear Vision for Clean Energy Prosperity. The report, among other recommendations, urges the utility’s board to adopt feed-in tariffs to encourage locally-owned wind and solar energy. The Institute argues that feed-in tariffs, in contrast to tax subsidies, allows both non-profits and profit-making enterprises to participate. Through feed-in tariffs, says the Land Institute, the utility need not raise its own capital to build solar and wind projects in the community, the utility’s ratepayers make the investment themselves and revenues they earn return directly to the community where they live.

If Traverse City Light & Power moves on the recommendations, the utility would be following in the footsteps of Gainesville Regional Utilities, a Florida municipal utility that launched a highly regarded solar feed-in tariff in 2009.

The Land Institute’s proposal suggests that the utility use feed-in tariffs to install half of the planned renewable capacity additions, the equivalent of 3.3 MW of 50 kW commercial-scale of rooftop solar PV, and 15 MW from ten commercial-scale wind turbines. The wind and solar targets would provide 16% of the utility’s supply in 2020. Landfill gas would complete the remainder of the Land Institute’s 20% target for renewables by 2020.