close print view
MPSC Staff Issues Report on Michigan's Future Electric Capacity Needs, Finds Additional Electric Generation Capacity May Be Needed after 2009Contact: Judy Palnau (517) 241-3323
The Michigan Public Service Commission (MPSC) staff late yesterday issued its report on Michigan’s future electric capacity needs, indicating that Michigan’s existing generation resources are adequate to meet the state’s demand, but by 2009, growing demand will require that certain measures be undertaken to ensure that Michigan’s electric grid keeps the power flowing.
“With aging electric plants and increasing demand for electricity, Michigan needs to start planning now to ensure that the lights stay on well into the future,” said MPSC Chairman J. Peter Lark. “While problems are not imminent, more electric generation may be needed as soon as 2009. I am pleased that Capacity Need Forum participants have laid much of the groundwork needed to determine what
The MPSC on
· to determine whether Michigan’s electric generating capacity will be adequate to meet the growing demand for electricity, especially given the likely retirement of some of the state’s older generating units, and assuming additional resources are needed, what types of resources would be best for Michigan; and
· to provide guidance to the MPSC on rate-making policies and methodologies to allow recovery of utility investment in electric generation resource additions.
Over 160 individuals from 60 organizations participated in the forum. It is the first electric energy planning effort coordinated by a State of
The 60-page report contains these major findings:
To reduce the risks associated with power plant construction, the MPSC staff is recommending that the Commission modify its rate-making methodology to include a “reliability option.” Under this approach, the utility would, in a contested case, demonstrate the need for additional capacity, the type needed, and that its recommended plant is the best option for meeting that need. A competitive bidding process would be used to ensure a reasonable cost. Any MPSC-approval project using this option would include a related reliability charge assessed to all distribution customers, providing the utility with a significant measure of revenue certainty to allow a new plant to be financed. In addition, the utility could receive a construction work in progress (CWIP) amount in the rate base, without the typical offset for funds used during construction. This approach would mean that decisions on the need for, and cost of, a plant would be made in advance and provide enough revenue certainty to allow it to be financed.
The entire report is available on the MPSC’s website:
The MPSC is an agency within the Department of Labor & Economic Growth.
Case No. U-14231
PoliciesMichigan NewsMichigan.gov Survey
Copyright © 2014 State of Michigan