electric reliability

Paul Proudfoot, Director

In December of 2016, Governor Snyder signed into law Public Acts 341 and 342 which amended the 2008 energy laws, Public Acts 286 and 295.  The law is called the Clean and Renewable Energy and Energy Waste Reduction Act and is intended to promote the development of clean, renewable energy and conservation through energy waste reduction efforts. The law has set a 35% target for meeting the state’s electric needs by 2025, through energy waste reduction and renewable energy. The Electric Reliability Division is made up of three sections: Energy Waste Reduction, Generation Certificate of Need and Renewable Energy.

  • Energy Waste Reduction Section: The Energy Waste Reduction Section is responsible for the Commission’s Energy Waste Reduction regulatory tasks. Energy Waste Reduction is defined in Act 342 as energy efficiency, load management (which reduces provider costs) and energy conservation (attributable to energy waste reduction).  Case No, U-18260 etal issued March 28, 2017, clarifies the program changes from PA 295 to PA 342 and makes clear that energy optimization plans under PA 295 will continue as energy waste reduction plans under PA 342.
    • The energy waste reduction standard requires Michigan energy providers to save energy each year until December 2021.
    • Electric and gas savings targets are based on prior years sales and are set at 1%/year for electric and .75%/year for gas, for all load serving entities including investor owned, cooperatives and municipals
  • Generation Certificate of Need Section: conducts review and analysis of Certificate of Necessity applications filed by an electric utility in a contested case proceeding to:
    • Construct a new generation facility (fossil, nuclear or renewables),
    • Purchase or make a significant investment in an existing facility, or,
    • Enter into a power purchase agreement (PPA); all projects or PPA’s costing $100.0 million or more with costs allocated to Michigan retail customers.

Need is demonstrated by the utility through development of an Integrated Resource Plan (IRP) included in their application. A Commission Order granting or denying a Certificate of Necessity is issued within 270 days of the application’s filing date. The utility is then allowed to recover its capital expenditures through the regulatory rate recovery process. The utility must file an annual status report, (or more frequent reports at the discretion of the MPSC), including cost and schedule information for the approved project.

  • Renewable Energy Section: The Renewable Energy Section carries out the Commission’s administrative activities related to the renewable energy standard, net metering & distributed generation programs and voluntary green pricing programs. 
    • The renewable energy standard requires Michigan electric providers to achieve a retail supply portfolio that increases from 10% in 2015 to 15% in 2021. There is an interim compliance requirement of 12.5% in 2019 and 2020.  The Commission issued an order on March 28, 2017 in Case No. U-18525 et al, providing filing dates for each electric provider to file a renewable energy plan describing how the new renewable energy standard will be achieved. 
    • 2016 PA 342 includes a new distributed generation program and directs the Commission to establish the program.  The distributed generation program is for customers who install certain on-site grid-connected, renewable generation.  Qualifying renewable generation projects must be no larger than 150 kW.  Larger methane digesters may also participate.  The project may generate up to 100% of a customer’s annual electricity consumption.  See the Commission’s distributed generation program webpage for more information. 
    • 2016 PA 342, Sec. 61 directs electric providers to offer customers the opportunity to participate in a voluntary green pricing program. Electric providers whose rates are regulated by the Commission must have their programs approved by the Commission. MPSC staff expects the programs to be approved by April 20, 2018.  The Commission issued an order with filing dates for these electric providers on March 28, 2017 in Case No. U-18349 et al.  See the Commission’s voluntary green pricing programs webpage for more information.  

Contact the Electric Reliability Division @ 517-284-8240
Fax: @ 517-284-8299