MPSC OKs Consumers Energy's sale of coal plants in Muskegon, Luna Pier for redevelopment

September 15, 2017

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today approved a $62.5 million plan by Consumers Energy to have a North Carolina firm purchase and tear down the closed B.C. Cobb and J.R. Whiting coal-fired electric plants and redevelop the sites.

Forsite Development Inc. will undertake abatement, demolition and dismantling of Cobb in Muskegon and Whiting in Luna Pier. Forsite, through its subsidiaries Muskegon Investments I LLC and Monroe Investments I LLC, will remove the coal-fired generation equipment and structures, perform environmental remediation and find other uses for the industrial property.

The plants were closed in April 2016. Cobb, which has two generating units, was built in 1948. Whiting and its three generating units was built in 1952.

Under the settlement agreement (Case No. U-18252), Consumers will be able to recover the costs in depreciation rates. The agreement also states that the divestiture of the two plants will not affect Consumers’ ability to provide safe, reliable and adequate energy services in Michigan. Consumers is required to submit quarterly and annual reports to the Commission on the progress of the demolitions and site remediation.

Demand response framework

The Commission today adopted a three-phase framework for utilities to follow when accounting for costs associated with demand response (DR) programs offered to customers. Demand response allows consumers to have more control over their energy bills by taking advantage of financial incentives offered by utilities and adjusting their energy use during peak periods.

A workgroup consisting of stakeholders and the MPSC staff discussed options for the DR program cost recovery framework requested in Case No. U-18369. Under a three-phase plan, a utility will use its integrated resource plans (IRP) for DR planning, rate cases to recover plan costs and a reconciliation mechanism to make any adjustments. The framework was required under the state’s new energy laws and the adopted framework makes it easier for utilities and alternative energy suppliers to react quickly to evolving technologies. 

 

Other MPSC decisions

DTE ELECTRIC SELF-IMPLEMENTATION REFUND: Approved a settlement agreement allowing DTE Electric Co. to implement surcharges and bill credits to reconcile rate self-implementation (Case No. U-18344). DTE Electric will credit customer bills in October, November and December for an approximate total of $38.5 million, which is an over collection of about $36.2 million and interest of about $2.2 million. A residential customer using 500 kilowatt hours per month of electricity will see a decrease of $3.32 in their October, November, and December bills. Utilities can legally self-implement rate increases as they await PSC action on their request. The rate is adjusted when the Commission rules on the final case. Under the newly enacted energy laws, utilities will not be able to self-implement in future rate cases.

SEMCO GAS COST RECOVERY PLAN: Agreed to a settlement agreement between SEMCO Energy Gas Co., the MPSC staff and the state Attorney General’s Office for a gas cost recovery (GCR) plan and factor for the 12-month period ending March 31, 2018 (Case No. U-18157). The Commission approved a base GCR factor of $4.194 per Dekatherm, which equals a balancing and demand charge of about 80 cents and gas commodity cost of about $3.390. Customers will see no immediate impact on their bills.

ALPENA EWR PLAN COSTS OK’D: Alpena Power Co.’s energy waste reduction (EWR) plan was approved following a settlement agreement in Case No. U-18330 between the utility and the Commission staff. Alpena Power will pay $508,683 for 2018 for its EWR plan and residential customers customer who use 500 kilowatt hours of electricity per month will see a decrease of 5 cents in their monthly bill beginning in January 2018.

GAS SERVICE IN CHEBOYGAN COUNTY: DTE Gas Co. is authorized to extend pipelines to begin providing natural gas service to customers in Munro Township, Cheboygan County under approval of an Act 69 Certificate (Case No. U-18396). DTE Gas service will be extended to 131 residential homes and four businesses at Burt Lake as well as the University of Michigan Biological camp, and 175 residential homes and one business at Douglas Lake. Presque Isle Electric and Gas Co-Op didn’t object to the request by DTE Gas.

BASIC LOCAL PHONE SERVICE OK’D: Level 3 Communications was granted a temporary and permanent license expansion to provide basic local service (Case No. U-18442). Level 3 will offer service in the territories of Frontier Midstates Inc. and CenturyLink.

COURT ORDERED FILING: Sprint Spectrum L.P. and AT&T Michigan were ordered to resubmit proposed internet interconnection agreement language (Cases No. U-17349 and U-17569), after a ruling by the U.S. District Court, Western District of Michigan, Southern Division. The court said in July, after a three-year deliberation, that both companies must submit appropriate agreement language for internet protocol interconnections. Sprint and AT&T have 30 days to do so.

DTE CONTINUES DETROIT CONVERSION: Settlement agreements were approved for energy waste reduction (EWR) plans for DTE Electric Co. (Case No. U-17762) and DTE Gas Co. (Case No. U-17763). The Commission OK’d the continuation of both EWR programs that were approved initially by the PSC on June 3, 2015. A residential customer who uses 500 kWh of electricity will see a decrease of 23 cents in their monthly bill beginning in January. Residential customers who use 10 MCF of natural gas will see a decrease of 2 cents in their monthly bill starting in the same month.

UMERC RECONCILES EWR COSTS: Upper Michigan Energy Resources Corp. (UMERC) received approval to reconcile its 2016 energy waste reduction costs and revenues through a settlement agreement (Case No. U-18336). UMERC will pay $112,999 for WPSC Rate Zone gas service and $389,509 for electric service EWR programs through Dec. 31, 2016. Overages will be applied to UMERC’s 2017 EWR programs. A residential customer using 100 therms of natural gas per month will see a decrease of 89 cents in their monthly bill beginning Oct. 1, while residential electric customers will see no change in their bills starting in the same month.

For more information about the MPSC, please visit www.michigan.gov/mpsc or sign up for one of its listservs to keep up to date on MPSC matters.

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