Anti-Prop 3 group gets foul and warnings from Michigan Truth Squad

MICHIGAN TRUTH SQUAD ANALYSIS: "Counter", "Idea", "Who", "Bills" and "Claim" and "Cost" website page

Who: CARE for Michigan, anti-Proposal 3 ballot committee

What: TV/Web ads, website

Truth Squad call: Foul and Warnings

Proposal 3 would create an amendment to the Michigan Constitution a requirement that 25 percent of the state’s electrical power come from renewable sources by 2025, with certain caveats.

The primary proponent group for Prop 3 is Michigan Energy, Michigan Jobs. As of the July reporting date, it had raised $2.2 million, most of it from out of state environmental groups.

The primary opponent is CARE – Clean Affordable Renewable Energy for Michigan Coalition. As of July, it had raised nearly $6 million, almost all of it from the two major utilities – Consumers and DTE.

Ballot committees will report again to the state on their finances at the end of October.

Questionable statement: "By the time they're through, your total cost will be: $2,511.40 for the energy mandate Proposal 3. Learn more." (website)

This calculation is for a consumer who pays a residential electric bill in Michigan. The CARE website, however, does not detail how the calculation is made. The figure is repeated in the TV ad "Bills," which says it will hit everry electric customer in Michigan.

Responding to an inquiry from MTS, CARE said that the $2,500 figure is the result of taking the $12 billion cost estimate for Proposal 3 and dividing it by 4.8 million, the number of electric customers in Michigan.

It is rare for public policy math to be so simple -- and this is not one of those rare occasions.

First, the $12 billion figure originated with an estimate from Consumers Energy, which has bankrolled opposition to Prop 3. A study from Public Sector Consultants in Lansing, paid for by Prop 3 opponents, said rate increases would occur, "but it is not clear by how much."

And not all electric customers are the same, obviously. The Michigan Public Service Commission says the average monthly bill for a residential user of 500 kilowatt hours is $71.94.

The most recent customer count on the PSC website is from 2010, which lists 4.47 million total customers -- be they commercial or residential.

Questionable statement: "One Michigan renewable energy company got $47.4 million government dollars and produced only 3 new jobs." (Claim)

The source for this claim is the 21st Century Jobs Fund Program Legislative Report of Sept. 30, 2011.

It lists the Mascoma Corp. as receiving $47.4 million in "government dollars," although only $20 million of that came via the state's Centers of Energy Excellence program. Between the award date of Sept. 24, 2008, and Sept. 30, 2011, the time of the report, Mascoma reported only 3 direct jobs created.

Mascoma, a firm specializing in biofuels, did say that 70 direct jobs were projected in 2012.

Questionable statement: ""Who’s paying for Proposal 3’s massive ad campaign? A bunch of out-of-state companies and California billionaires who want to hijack Michigan’s constitution no matter how much it raises your electric bills." (Who)

The ad cites the July campaign finance statement of Michigan Energy, Michigan Jobs, the pro-Prop 3 ballot committee and an Oct. 11, 2012, article in Michigan Capitol Confidential, the online site of the conservative Mackinac Center for Public Policy.

The Capitol Confidential article plays connect the dots between a "California hedge fund billionaire" and Proposal 3.

Tom Steyer, the story says, has donated at least $1 million to The Energy Foundation. That foundation, according to the New York Times, is the "sole contributor" behind the Green Tech Action Fund.

As reported by Truth Squad back in July, the Green Tech Action Fund was the single largest contributor to the pro-Prop 3 ballot committee in the report filed in July. It gave $1.34 million of the approximately $2.25 million raised by Michigan Energy, Michigan Jobs.

Ballot committees will file new finance reports in a few days.

Of course, all of this is inference. The New York Times report is from April 2010 and refers to a California ballot fight.

A review of Green Tech Action Fund's federal 990 tax form for 2010 shows it received $17.86 million in contributions and grants in 2009 and $6.73 million in contributions and grants in 2010.

Under federal tax law, Green Tech, as a 501c4 group, is not required to list its donors. However, the large sums reported in the 990 complicate the effort to link Steyer to Proposal 3.

Also, the ad says "billionaires." The Capitol Confidential story only refers to Steyer as a billionaire. Who are the others? The ad does not say.

Also, who are the "bunch of out-of-state companies"? The ad does not explain the reference

Questionable statement: ""And send millions of Michigan dollars to California." (Who)

Again, no reference or citation is made. The provisions of Proposal 3 call for Michigan utilities to get the additional renewable power from inside Michigan or from adjacent areas served by a Michigan utility, so it's difficult to see how utility payments here mean millions sent to California.

If it passes, Prop 3 is sure to spur a surge of wind turbine construction and while there are Michigan firms that produce wind turbine parts, Prop 3 does not prohibit the use of out-of-state manufacturing companies.

Questionable statement: "An energy mandate that will add billions of dollars to the electric bills of Michigan’s families and businesses." (Counter)

This claim is cited to a Sept. 3, 2012, story by the News Herald. As previously reported by Truth Squad, the story reports "on the Michigan Electric Cooperative Association’s decision to join the opposition campaign to Proposal 3. It quotes MECA’s head on the $12 billion cost claim.

"As noted in a previous Truth Squad analysis, the original source for the $12 billion figure is from an estimate from Consumers Energy, which has donated extensively to the Prop 3 opposition campaign."

The citation provided does not give an independent source for the "billions of dollars to the electric bills" claim.

Questionable statement: "Michigan families will pay thousands of dollars in higher electric bills." (Counter)

The citation here is for Michigan Capitol Confidential, a website of the Mackinac Center, a free-market think tank that has been critical of energy mandates. It points to a July 2011 story that quoted an employee of a think tank in Washington, D.C., who also is critical of energy mandates.

Since it was published in 2011, long before Proposal 3 was approved for the ballot, it cannot address the specifics of the measure.

An analysis by the nonpartisan Citizens Research Council of Michigan said, "(I)t is expected that the cost of electricity will continue to increase in Michigan with or without adoption of this proposal."

Questionable statement: "The backers don’t even have a plan." (Idea)

The citation is for the CRC memo mentioned and linked above. It says:

"Adoption of Proposal 2012-03 supposes that PA 295 would be amended to comply with the new constitutionally enhanced requirements."

"The expectation is that the legislature will amend PA 295 of 2008 in accordance with the provisions of this proposed amendment. The details for how the higher standard would be phased in would be determined at that time."

Adoption of Proposal 3 would require a great deal of legal and regulatory work.

Overall impression: These ads focus on costs – to implement Prop 3 and to utility consumers. Unfortunately, the figures and information available to date do not give independent sourcing for the $12 billion implementation figure or the "thousands" in new costs on utility bills.

Foul or no foul: Foul on the CARE website for implying that the average residential customer would see a $2,511 utility bill increase when that calculation is not based on a detailed or reasonable cost-sharing allocation between the many different types of residential and commercial electricity customers. Warnings on the ad claims that "California billionaires" are financing the pro campaign and that "millions" will go to California. The facts, as reported to date, don't support those conclusions.

The Center for Michigan (the parent company of Bridge Magazine and the Michigan Truth Squad) has been financially supported by a wide range of corporate and foundation supporters. We are grateful to all funders for helping us create and grow a new nonprofit journalism service for Michigan citizens. Those funders have absolutely no role in the editorial decisions of the Michigan Truth Squad or Bridge Magazine.