The Michigan Public Service Commission (MPSC) today approved a modified version of The Detroit Edison Company's proposed renewable energy plan (REP) and its energy optimization (EO) plan and surcharges, as required by Public Act 295 of 2008.

The REP proposed by Detroit Edison will substantially increase the amount of electricity provided to its customers from renewable sources. The EO plan will make energy optimization opportunities available to all Detroit Edison customers.  The overall result will be a significant reduction in the amount of electricity generated and used in Michigan from fossil fuel sources.

Detroit Edison plans to develop 609 megawatts (MW) of renewable electric sources, including 565 MW from wind.  In addition, it plans to purchase 686 MW of renewable resources.  Detroit Edison also expects to save 6,633 gigawatt-hours of electricity over then EO plan's lifetime.

In today's order the MPSC said that the utility's REP filing was incomplete because it failed to provide a reasonably detailed description of its Requests for Proposal (RFP) and bid evaluation process.  Therefore, the MPSC directed the utility to consult with the MPSC staff and to file testimony and exhibits to correct the REP deficiency within 14 days. 

In addition, the MPSC found:

·         uncollectibles costs are not reasonable REP program costs; and

·         tire fractionation does not qualify as a "renewable energy resource" under PA 295.

Under the approved, modified REP, the utility is authorized to implement its REP surcharge beginning Sept. 1 and thereafter.  Residential customers will see a monthly REP surcharge of $3.  The costs of the REP were found to be less than the cost of a new electric plant using fossil fuels.

Under the approved, modified EO plan, the utility is authorized to implement its EO surcharge beginning June 3 and thereafter.  Every dollar spent on the EO plan will result in an average savings of $4.60.  The company originally requested a surcharge that would result in approximately 64 cents per month for the average residential electric customer using 500 kilowatt-hours.  However, because the company has been directed to make changes to its proposed EO plan, the exact amount of the surcharge is unknown at this time, but it will be less than what the utility requested.

Today's order excludes from the EO surcharge uncollectibles that the company sought to include.  Uncollectibles associated with the EO plan will be addressed in Detroit Edison's next general rate case.

In addition, the MPSC noted that Detroit Edison's proposed financial incentive mechanism is not proportional with additional energy savings above the statutory targets.  Therefore, the Commission is giving parties to this case 30 days to file new proposed financial incentive mechanisms. 

The collaborative established in Case No. U-15805 et al. that includes the participation of all electric and natural gas providers subject to the MPSC's jurisdiction under Public Act 295 will also evaluate Detroit Edison's EO program.  Energy efficiency experts, equipment installers, and other interested stakeholders have also been encouraged to participate in the collaborative.

The MPSC is an agency within the Department of Energy, Labor & Economic Growth.

Case No. U-15806