Anderson Economic Group Work

Net Costs of Michigan's 25 by 25 Ballot Proposal (Prop 3)

 The “25 by 25” proposal (Proposal 12-3) on the November 2012 Michigan ballot is a proposed constitutional amendment. If approved by the voters, it would mandate that, by 2025, all Michigan electricity suppliers generate 25% of all electricity they sell from renewable sources, located either in Michigan or within the area in which the supplier sells electricity. If compliance with 25×25 would require suppliers to increase prices by more than one percent in any year over and above increases for reasons not related to the mandate, the deadline would be extended beyond 2025.

The Small Business Association of Michigan (“SBAM”) retained Anderson Economic Group to complete an independent analysis of the proposal. The purpose of this report is to analyze the proposed amendment, including its cost and its effect on employment in Michigan. We discuss the implications of the proposal being in the form of a constitutional amendment and include a comparison of our findings with other studies. This report finds that the proposal would increase costs to Michigan electricity ratepayers, and that it would lower employment in the state on average over the life of the renewable generation equipment built to comply with the mandate.

The full report is available here.