CARE is the main opponent of Proposal 3 and cites cost as a main reason that voters should vote no. A CARE ad states that proposal 3 would be "at least $12 billion to meet that mandate and Michigan families and businesses will be footing the bill for years to come." Michigan Energy Michigan Jobs, the proponents of Proposal 3 states " Proposal 3 will increase our state's use of renewable energy, creating thousands of jobs for Michigan workers, attracting $10.3 billion in new investments to our state, reducing pollution in the air and water and significantly improving public health." Which side is right?
Studies show there are lower capital costs to start up a wind plant than a coal plant (with the same productive power). The total capital cost of building a wind farm is 1,300,000,000 whereas the cost of building a coal plant is 1,350,000,000. The cost of fuel, fuel waste and disposal, and water use with a coal plant adds up to $400,000,000 whereas none of these costs apply to wind energy. The current retail cost to customers of both wind and coal generated electricity is 14 cents a Kilowatt hour. The net cost to produce these energies is 16 cents kwh for coal and 14 cents a kwh for wind energy. The CO2 cost (at $50 a ton) is 591,300,3000 dollars in one year of coal plant operation, whereas wind turbines do not generate carbon emissions. Wind energy takes an average of 5-10 years for the cost to come down. There is a vast operational cost disparity, the yearly running cost of a wind plant is 181,000,000 compared to 1,219,300,000 to run a coal plant for a year. The life cost of a coal plant is also significantly higher at $29,832,500,000 compared to the life cost of a wind plant at 3,850,000,000 (uenergy.org).
An interesting interpretation voiced by Robert Bryce of the Manhattan Institute is that Proposal 3 is "essentially a de facto carbon-reduction tax" meaning that customers would be paying more to have cleaner energy. A CARE advertisement states that Proposal 3 "works out to thousands of dollars in higher electric bills for Michigan families and small businesses". An investigative article on the advertisement campaigns for Prop 3 by the Truth Squad calls out this ad for providing no material to support that claim and no evidence of arithmetic done to come up with that statement.
Money being spent on clean energy is relative to money being spent on energy in general. David Gard, the energy program director of the Michgian Environmental Council states"Since 2006 the delivered cost of coal to Michigan has gone up 70%. Some people have this old fashioned notion that coal is cheap and that's just not the case anymore."
There are financial benefits to diversifying a state's energy portfolio because it minimizes risk. Opponents of Proposal 3 think that switching to renewable energies would be risky. David Gard says "we're making a bigger bet, taking a bigger risk by not being very proactive and gradually increasing the amount of renewable energy in our portfolio."
Offshore wind and onshore wind would have vastly different costs. The levelized cost of energy is a measure of the cost of ownership for the plant. A coal plant's levelized cost of energy is $75-$125 per mega watt hour. On shore wind falls in the range of $60-$120, however offshore wind costs $125-$250, essentially double the cost of coal or onshore wind. When asked about offshore turbines, David Gard said "I want to dispel the notion that some people have that you need to put turbines in Lake Michigan in order to meet this proposal's requirements".