Michigan Regulator Approves Consumers Energy’s Long-Term Renewable Power Contracts

The Michigan Public Service Commission on July 23 issued six orders approving utilities’ renewable energy proposals, including eight power purchase contracts between Consumers Energy Company and the members of the Independent Power Producers Coalition of Michigan. The contracts are expected to reduce costs by nearly $2.6 million over the life of the contracts.

Six of Consumers Energy’s agreements are for existing facilities to purchase power at the full avoided cost rate under the federal Public Utility Regulatory Policies Act. Additional 20-year contracts between the company and Durban Solar LLC, Esmarelda Solar LLC, and Shady Solar LLC for 30 megawatts of solar generation, projected to cost nearly $72 million without impacting customer rates. Further, contracts with two hydropower plants are expected to save customers about $950,000 over their 20-year terms.

The commission also approved the Consumers Energy’s power purchase agreement (PPA) for the output of a landfill gas-powered generating station owned by North American-Central LLC and a renewable energy purchase agreement (REPA) for another landfill gas station owned by the same company. While the PPA affects rates of customers enrolled in Consumers Energy’s voluntary renewable energy program, the REPA lowers the company’s purchase obligation to 13, 315 renewable energy credits from 14,497 credits.

Indiana Michigan Power Co received approval for its renewable energy plan, which incorporates a 20-megawatt company-owned and -operated solar facility in Indiana, with Michigan’s jurisdictional share representing 3 megawatts.

The agency granted approval for Upper Michigan Energy Resource Corp.’s voluntary green pricing programs that allows customers the option to specify the amount of electricity they use is from renewable energy sources, with additional costs borne by the customer. As the company does not own renewable energy resources, the program requirements are met through contracts for renewable energy credits with North American Natural Resources Inc. The commission called for detailed semi-annual reports to help evaluate and identify ways to improve the programs.