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HB 6124

Energy: alternative sources; bidding requirements; update. Amends sec. 28 of 2008 PA 295 (MCL 460.1028).

2025-2026 Regular Session Introduced by Mike Hoadley

The bill raises Michigan's renewable energy credit targets, requiring providers to reach 60% by 2035 and outlines how RECs are calculated, with allowances for EWR substitutions and

bill electronically reproduced 06/23/2026
#energy:alternativesources #energy:other
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Bill Summary · HB 6124

Overview

House Bill 6124 (2025-2026, Michigan) amends the state’s renewable energy credit (REC) standard under the Clean and Renewable Energy and Energy Waste Reduction Act (2008 PA 295; as amended). The bill sets updated targets for electric providers, details calculation methods for RECs, clarifies treatment for cooperative and multistate providers, and introduces optional substitutions and incentives related to energy waste reduction (EWR) credits and non-affiliate contracts. It was introduced on June 23, 2026, by Rep. Mike Hoadley and referred to the House Committee on Energy.

Purpose and intent

  • Establish and update renewable energy credit portfolio requirements for electric providers.
  • Clarify how providers calculate compliance, including adjustments for certain customer programs and market conditions.
  • Create special provisions for cooperative and multistate providers.
  • Introduce optional substitution of EWR credits for RECs and allow financial incentives for certain power purchase agreements and contracts.
  • Align implementation with program rules and ensure oversight through the Michigan Public Service Commission (the commission) for regulated providers.

Key provisions and changes

  1. Renewable energy credit portfolio targets

    • Through 2029: at least 15% REC portfolio.
    • 2030–2034: at least 50%.
    • 2035 and each year thereafter: at least 60%.

  2. Calculation of renewable energy credits (subsection 2)

    • Requires determining the number of RECs used for compliance in the year.
    • The denominator for calculating the portfolio percentage can be:
      • (a) Weather-normalized retail MWh sold in Michigan in the prior year, minus:
      • Sales to customers in voluntary green pricing, and outflow from customers in the distributed generation program.
      • (b) Average annual MWh sold in Michigan over the prior 3 years, minus the same adjustments.
    • The result is multiplied by 100 to yield a percentage.

  3. Special provision for cooperative and multistate providers (subsection 3)

    • Allows these providers to calculate a “maximum” REC portfolio requirement using the same denominator rules described above.
    • Allows post-2024 adjustments that may reduce the standard to the provider’s maximum requirement, subject to multiple state-specific conditions (e.g., generation within the state exceeds sales, all in-state generation is clean energy, credits generated in-state are used toward compliance, and in-state clean energy equals or surpasses in-state sales without others using that energy) (subsections 3 and 4).

  4. Subsection on meeting the standard (subsection 5)

    • Providers may meet the REC standard through:
      • Generating renewable electricity for sale to retail customers.
      • Purchasing renewable energy and capacity.
      • Purchasing or acquiring RECs without associated energy or capacity.
    • RECs acquired without associated energy or capacity must be produced within the provider’s regional transmission organization (RTO) territory and, with limited exceptions for municipally owned utilities, may not exceed 5% of the annual RECs used for compliance.
    • RECs acquired under this provision are not subject to section 29 and cannot be used to meet the standard after 2035.

  5. Commission review of contracts for REC purchases (subsection 6)

    • For regulated providers, contracts entered into to support RECs, storage, or clean energy systems must be submitted to the commission for review.
    • The commission may approve and deem such contracts consistent with the provider’s renewable energy plan.
    • The commission may not approve unsolicited proposals unless they offer opportunities not available or commercially practical through competitive bidding.

  6. Substitution of energy waste reduction credits (subsection 7)

    • Providers with more than 2% annual incremental energy savings under an approved EWR plan may substitute EWR credits for RECs, up to a limit of 10% of the REC standard.
    • Substitution rate: 1 REC per 1 EWR credit.

  7. Financial incentives for certain contracts (subsection 8)

    • For regulated providers, if the provider enters into a PPA for renewable resources or a third-party contract for storage/clean energy with a non-affiliate, the commission would authorize an annual financial incentive.
    • The incentive equals contract payments in that year times the provider’s pre-tax weighted average cost of permanent capital (as determined by the commission in the latest general rate case).
    • The pre-tax cost of capital is updated in subsequent rate cases and applies for the term of the contract for contracts entered after June 30, 2024.

  8. Definition clarification (subsection 9)

    • Defines “cooperative electric provider” as an entity that is a member of, or purchases energy from, a cooperative corporation organized under specified Michigan statutes or engaged in generation/transmission of electricity.

Who and what is affected

  • Electric providers serving Michigan retail customers (including cooperative and multistate providers under the new maximum-REC framework).
  • Cooperative electric providers operating within Michigan.
  • Regulated utilities subject to the Michigan Public Service Commission (MPSC) oversight, particularly for REC sales/purchases, PPA/contracts, and EWR substitutions.
  • Non-affiliate contracting entities that might enter into PPAs or storage/clean energy contracts with Michigan providers.
  • Customers, through shifts in procurement requirements and potential rate impacts tied to REC, EWR, and contract incentives.

Procedural and timeline aspects

  • Effective dates: The bill sets standards beginning upon enactment with annual and multi-year targets extending through 2035 and beyond.
  • Compliance timing follows the established calendar year for REC purchases/generation, using prior-year sales data or a three-year average as the denominator, depending on provider type.
  • Commission oversight applies to contracts and financial incentives, with approval processes for non-standard proposals and the potential for updated capital-cost calculations in rate cases.
  • Subsection 7 introduces a capped use of EWR credits (not more than 10% of the REC standard) as a substitute for RECs.

Potential implications

  • Higher REC targets (60% by 2035+) could accelerate deployment of in-state clean energy generation and renewables.
  • The 5% cap on non-energy-revenue RECs (without associated energy) and in-state-focused requirements may influence how providers structure renewable procurement.
  • Enhanced commission oversight for external contracts may affect deal timing and competitiveness, encouraging more transparent bidding processes.
  • EWR credit substitutions create flexibility but limit reliance on EWR to meet REC obligations.
  • Financial incentives tied to capital costs may influence the economics of PPAs and storage/clean energy projects.

Compiled from official sources — confirm details with the bill’s official record.

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