PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM Wednesday, July 31, 2019 Michigan Public Service Commission Lansing Conference Room 7109 W. Saginaw Hwy. Lansing, MI 48917 Agriculture and Rural Communities Energy Roadmap — Stakeholder Meeting
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Agriculture and Rural Communities Energy …...Energy Characteristics for Agriculture and Rural Customers •Statewide, 75 percent of customers are served by natural gas utilities
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PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COMPUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Wednesday, July 31, 2019
Michigan Public Service Commission
Lansing Conference Room
7109 W. Saginaw Hwy.
Lansing, MI 48917
Agriculture and Rural Communities Energy Roadmap—Stakeholder Meeting
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Welcome and Introductions
2
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Overview of Agenda and Meeting Process
3
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Agenda
4
Time Agenda Item Presenter
8:45–9:00 AM Meet and Greet
9:00–9:10 AM Welcome and IntroductionsRobert Jackson; Department of Environment, Great
Lakes, and Energy (EGLE)
9:10–9:15 AM Overview of Agenda and Meeting ProcessJulie Metty Bennett
Public Sector Consultants (PSC)
9:15–10:00 AM
Presentation of Findings from the Agriculture and Rural Communities Energy Roadmap—Baseline and Evaluation
AssessmentJill Steiner and Eric Pardini; PSC
10:00–10:15 AM Discussion of Research Findings Julie Metty Bennett; PSC
10:15–10:30 AM Break
10:30–11:30 AM Identify New or Changed Policies and Programs Julie Metty Bennett; PSC
11:30–11:45 AM Review Recommendations Julie Metty Bennett; PSC
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Presentation of Findings from the Agriculture and Rural Communities
Energy Roadmap—Baseline and Evaluation Assessment
5
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Overview of Rural Population—Definition
• Federal agencies have over two dozen definitions for rural communities based on land use, population density, and economic characteristics
• Definition, including list of rural counties and zip codes, comes from Federal Office of Rural Health Policy
6
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Population
7
79% 93%
14%
2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Michigan Rural
Race
Two or more races
Some other race
Native Hawaiian and Other Pacific Islander
Asian
American Indian and Alaska Native
Black or African American
White
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Population
9
6%
22%
10%
16%
5%
19%
8%
23%
0%
5%
10%
15%
20%
25%
Under 5 years Under 18 years 18 to 24 years 65 years and over
Age
Michigan Rural
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Income and Employment
10
7%
5%
11% 10%
14%
19%
12% 13%
5% 4%
7%6%
12%13%
17%
20%
12%
9%
2% 2%
0%
5%
10%
15%
20%
25%
Less than$10,000
$10,000 to$14,999
$15,000 to$24,999
$25,000 to$34,999
$35,000 to$49,999
$50,000 to$74,999
$75,000 to$99,999
$100,000 to$149,999
$150,000 to$199,999
$200,000 ormore
Income Distribution
Michigan Rural
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Income and Employment
11
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Michigan Rural
Household Income
0%
5%
10%
15%
20%
Michigan Rural
Poverty Rate
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Income and Employment
12
61%57%
7%
53%49%
8%
0%
10%
20%
30%
40%
50%
60%
70%
Labor Force Participation Rate Employment/Population Ratio Unemployment rate
Employment
Michigan Rural
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Housing
14
71%
29%
83%
17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Owner-occupied housing units Renter-occupied housing units
Housing
Michigan Rural
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Rural Demographics—Educational Attainment
15
3%7%
29%
24%
9%
17%
11%
3%
7%
37%
24%
10%13%
7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Less than 9thgrade
9th to 12th grade,no diploma
High-schoolgraduate (includes
equivalency)
Some college, nodegree
Associate'sdegree
Bachelor's degree Graduate orprofessional
degree
Educational Attainment
Michigan Rural
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Overview of Agriculture Sector
• Michigan has over 50,000 farm operations producing 300 different commodities
• Michigan is the second-most agriculturally diverse state in the U.S.
• Total value of production from Michigan’s agriculture sector is $8.1 billion
• The combined food and agriculture sectors contribute $104.7 billion annually to the state’s economy, representing 20 percent of the state’s gross domestic product and 22 percent of total employment
16
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Agriculture Sector—Farming
17
24,500
15,100
4,500
2,7004,100
Number of Farms by Economic Sales Class,
$1,000–$9,999
$10,000–$99,999
$100,000–$249,999
$250,000–$499,999
$500,000+
1,100,000
1,700,000
900,000
1,100,000
5,150,000
Amount of Farmland by Economic Sales Class
$1,000–$9,999
$10,000–$99,999
$100,000–$249,999
$250,000–$499,999
$500,000+
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Agriculture Sector—Farming
18
0 500,000 1,000,000 1,500,000 2,000,000
Sweet corn, fresh
Cucumbers, fresh
Squash
Cucumbers,…
Blueberries
Sugarbeets
Wheat
Hogs
Cattle and calves
Corn
Thousand Dollars
Top 20 Commodities in Cash Receipts
33%
34%
17%
13%
2% 1%
Acres of Michigan Farmland Harvested by Crop, 2017
Corn
Soybeans
Dry hay, haylage,and greenchop
Oher field crops
Fruit bearing acres
Vegetables
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Agriculture Sector—Agribusiness
• Agribusiness is an essential part of Michigan’s agriculture sector
• Industry includes grain handlers, feed suppliers, seed companies, fertilizer companies, food processors, and agritourism
19
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Energy Characteristics for Agriculture and Rural Customers• Statewide, 75 percent of customers are served by natural gas utilities and 8
percent rely on propane providers
• In rural communities, just over 50 percent of customers have natural gas service and 23 percent are served by propane providers
• The use of wood and fuel oil are also more prevalent in rural communities
• Energy consumption can be a significant business expense for some commodity types and certain agricultural processes, ranging from 10 to 15 percent for livestock operations to 40 to 50 percent for wheat and other commodities
• Projections show that if fuel costs were to double for farmers, it could result in a 13 percent increase in commodity prices
20
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Potential for Energy Efficiency
• Studies of the cost-effective energy-efficiency potential for the Upper and Lower Peninsulas have found that there is significant potential for savings
• Based on forecasted sales for the Upper Peninsula, the potential for energy efficiency is an additional 14.4 percent by 2026 and 20.4 percent by 2036
• Based on forecasted sales for the Lower Peninsula, the potential for energy efficiency is an additional 16.9 percent by 2026 and 24.4 percent by 2036
21
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Potential for Renewable Energy
• Michigan’s technical potential for renewable energy generation was estimated at 51,000 gigawatt hours (GWh) by 2030
• This translates to roughly 45.9 percent renewable energy production based on 2017 production levels
22
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
10,000
20,000
30,000
40,000
50,000
60,000
2015 2020 2025 2030
An
nu
al G
Wh
Year
Technical Potential for Renewable Energy Production (GWh)
Onshore windRooftop solar—residentialRooftop solar—commercialUtility PVCentral biomass powerPercent renewable energy production
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Evaluation of Energy-efficiency Program Offerings for Agriculture and Rural
Communities
23
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Evaluation Components
• Review of existing evaluations of programs targeted to agriculture or rural communities
• Interviews with 39 different stakeholders, including government agencies, nonprofits, commodity groups, state associations, energy providers, and other entities
• Analysis of utility data for program delivery
• Benchmarking and best practices review of programs nationally
• Survey of farms/agribusinesses, residents of rural communities, and local government and community leaders
24
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Analysis of Utility Data
• The project team gathered participation, incentive, and savings information for rural areas to compare proportion of program activity to the proportion of customers living in designated areas
• Reporting utilities and program administrators represent more than 90 percent of electric use in Michigan
• Cherryland Electric Cooperative, Thumb Electric Cooperative, Efficiency United, and the MECA Collaborative service areas are predominately rural
25
46%
36%
4%
4%
1%
0.10%
9.00%
DTE Energy Consumers Energy MECA Collaborative
Efficiency United Cherryland Thumb Electric
Not Reported
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Residential Program Delivery
26
15.6%
8.6%
10.6%
26.2%
31.1%
3.1%3.9%
21.9%
0%
5%
10%
15%
20%
25%
30%
35%
Low income Heating andcooling
equipment
Insulation andwindows
ENERGYSTAR
products
Appliancerecycling
ENERGYSTAR new-
homeconstruction
Homeperformancewith ENERGY
STAR
Consumers Energy Residential Rural Customers and Program Participants
Customers
2.7%
7.8% 7.9%
5.5%
19.5%
9.4%
0%
5%
10%
15%
20%
25%
Low income Heating andcooling equipment
Insulation andwindows
ENERGY STARproducts
Multifamily directinstalls
DTE Energy Residential Rural Customers and Program Participants
Customers
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Commercial and Industrial Program Delivery
27
24.0%
31.2%
19.1%
14.5%
27.5%
17.5%
9.6%
24.0% 23.5%
29.7%
0%
5%
10%
15%
20%
25%
30%
35%
C&I Custom C&I Prescriptive Small and Medium Business
Consumers Energy
Participants Savings Incentives Commecial and industrial customers
3.20%
8.30% 8.10%
2.2% 3.5%1.8%
6.5%5.6%
9.5%
12.20%
12.20%
0%
5%
10%
15%
20%
25%
30%
35%
C&I Custom C&I Prescriptive Small and Medium Business
DTE Energy
Participants Savings Incentives Commercial and industrial customers
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Utility Energy-efficiency Program Deliveryin Rural Areas
• Stakeholder interviews indicate increased focus on agriculture and rural communities in program design and outreach
• Several programs show strong penetration in rural areas, but others show participation less than proportional to the number of rural customers
• Rural residents and businesses represent 55 percent of the customers impacted by elimination of energy-efficiency standards for cooperatives and municipalities
• Approximately 30 percent of rural customers overall will be impacted
28
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Benchmarking and Best Practices
• Notable programs and policies:
- Southern Minnesota Municipal Power Authority
- Entergy Arkansas Agricultural Energy Solutions
- Florida Office of Energy’s Farm Energy and Water Efficiency Realization Program and Farm Renewable and Efficiency Demonstration
- Winneshiek Energy District
- Wisconsin Focus on Energy Rural Engagement and Statute §196.374(5m)(b)
- Minnesota Conservation Improvement Program
- California Rural and Hard to Reach Working Group
29
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Opportunities for Enhancement
• A comprehensive suite of programs serving all rural customer segments (residential, C&I, and agricultural) is essential to provide wide participation options
• Leveraging federal financing (e.g., from the USDA) with state, ratepayer, and/or member dollars provides expanded resources for serving agriculture and rural customers
• State energy-efficiency requirements for municipal and cooperative utilities are important for reaching rural and agricultural customers
• Coordinated program administration supports improved energy-efficiency performance
30
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Survey Respondents
Respondent TypeNumber of
Responses Resident of a rural community 175Owner/operator of a farm 43Owner/operator of an agribusiness 15Owner/operator of a business in a rural community 15Local government or community leader 38Provider of services, equipment, or supplies to farms or rural facilities 10Provider of energy-efficiency or renewable technologies or services 6
31
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Overall Awareness of Technologies and Programs
32
18%10% 8% 10% 14%
6%
59%
45% 45% 35%
57%
43%
14%
39% 41%
39%
22%
37%
8% 6% 6%16%
6%14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Energy-efficienttechnologies
Utility energy-efficiencyprograms
Utility programs forfarm and
agriculture
Governmentenergy-efficiency
programs
Renewable energytechnologies
Renewable energyprograms
Very knowledgeable Somewhat knowledgeable Not very knowledgeable Not at all knowledgeable
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Residential Characteristics
33
Very efficient
26%
Somewhat efficient59%
Somewhat inefficient
14%
Very inefficient1%
Home Efficiency
Natural gas45%
Propane46%
Other9%
Heating Fuel Type
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Residential Program Participation
34
33%
9%
40%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Energy-efficiencyprograms
Renewable programs
Program Participation
All residents Residents with very efficient homes
24%9%
28%
46%
37%
43%
16%
33%
25%
15% 21%
4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Application process Level of incentive Performance ofenergy-efficient or
rewable technologies
Satisfaction with Program Elements
Excellent Good Fair Poor
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Farm and Agribusiness Energy Use
35
44%
4%
16%
44%
38%
16%
38%
30%
4%2%
12%
8%
16%
6%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Electric Natural gas Propane Gasoline/diesel Biomass Solar
High use Moderate use Limited use
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Farm and Agribusiness Program Participation
36
43%
22%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Energy-efficiencyprograms
Renewable programs
Program Participation
10% 10%16%
52%
29%
55%
26%
45%
26%
13% 16%
3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Application process Level of incentive Performance ofenergy-efficient
technologies
Satisfaction with Program Elements
Excellent Good Fair Poor
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Farm and Agribusiness Barriers to Program Participation
37
10%
8%
28%
32%
36%
36%
40%
42%
42%
48%
0% 10% 20% 30% 40% 50% 60%
Other
Energy-efficient technologies are not available from local retailers or contractors
Existing equipment still works
Energy-efficient technologies cost more than alternatives
Lack of time to evaluate energy-efficiency or renewable energy technologies
Lack of knowledge of which technologies are most applicable
Lack of data needed to evaluate energy-efficiency or renewable energytechnologies
Energy-efficiency investments have long payback periods
Renewable energy technologies have long payback periods
Not aware of programs that provide technical assistance and/or financialincentives
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Local Government Leaders
38
55%
11%
29%
37%
24%
0%
10%
20%
30%
40%
50%
60%
Localgovernment
offices
Schools Recreationalfacilities
Public works Other
Types of Facilities Managed
76%
50% 50%47%
24% 24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Small grants Energy-relatedworkshops
How-to guidesfor projects
Funding forprojects
Meetings withother
communities
Number to callfor assistance
Interest in Types of Assistance
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Perceptions of Current Policies and Programs
39
7% 7% 9% 10% 7%
30% 27% 25% 19%19%
28% 35%39%
28% 30%
20%23% 16%
12%22%
14% 9% 10%
31%22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Current policies topromote energy efficiency
Current policies topromote renewable
energy
Promotion of utilityenergy-efficiency program
offerings andopportunities
Energy-related technicalassistance for farms andagricultural operations
Energy-related assistancefrom the U.S. government
Excellent Good Fair Poor No opinion
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Availability of Programs
40
More available
11%
Available at the same level
30%Less available
33%
Don’t know26%
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Barriers Identified
• Other priorities often take precedence over energy
• Program awareness remains low
• Deliverable fuels customers are left behind
• Costs and benefits must be clearly articulated
• Administrative burdens are deterrents
• Identifying and targeting agriculture customers is difficult
• Building and electric codes do not apply to agriculture customers
41
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Further Barriers
• Farm energy audits represent an additional cost
• Farm energy audits do not reflect true costs
• Implementation from farm energy audits has been limited
• The Michigan Farm Energy Program faces critical challenges
• Energy efficiency in the agriculture sector requires a unique approach
• The future of energy-efficiency programming is uncertain
• Rural population demographics are unique
• Renewable energy and agriculture integration is challenged by existing programs
• Onsite renewable energy development has limits
42
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Key Takeaways
• There is a significant amount of untapped, cost-effective energy-efficiency potential remaining
• Energy-efficiency programs should be available that have a specific emphasis on serving the needs of agriculture and rural customers
• Cost-effective energy-efficiency programming should continue to be a statewide policy priority and be made available to all Michigan residents
• Better communication of the potential benefits of energy efficiency to help customers feel confident in their decision to invest is key
43
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Key Takeaways Continued
• As Michigan’s renewable energy sector is primed for continued expansion, rural landowners need to have support to understand the impact of renewable energy siting on their business and how they can benefit
• Deliverable fuel customers should have the same opportunities to access energy-efficiency services as customers served by natural gas utilities
• Increasing customer awareness requires education and outreach about the viability of onsite renewable energy generation to control and/or reduce energy costs
44
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Key Takeaways Continued
• Michigan’s rural communities and agriculture sector need better collaboration and coordination to advance policies that reflect their needs and disseminate information about existing opportunities
• Farm energy audits need to be focused on demonstrating tangible benefits for customers in a way that drives implementation and supports customer action
• More needs to be done to directly link farm energy audits to utility energy-efficiency programs that can provide financial incentives and other assistance to help enable energy-efficiency improvements
45
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Workshop Question:What policies and programs are needed
to increase energy improvements in agriculture and rural communities?
46
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Break
47
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Workshop Question:What policies and programs are needed
to increase energy improvements in agriculture and rural communities?
48
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM
Thank you
50
PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM