MPSC sets guidelines for distributed generation, green pricing, electric choice programs under state energy law implementation

July 12, 2017 

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today established guidelines for a distributed generation program, provided expectations for utilities as they set up their volunteer green pricing programs, and set electric choice caps for nearly a dozen electric providers. The rulings implement aspects of the state’s new energy laws.

The new energy laws, which went into effect in April, are a significant update of laws passed in 2008. The new statutes are structured to ensure that rates are affordable, electricity supplies are reliable, and that the environment is protected.

The Commission was to establish within 90 days of Public Act 342 going into effect a distributed generation program, which was formerly known as net metering, where customers can generate their own power using renewable energy methods. Customers are compensated for any excess energy produced that goes back onto the electric grid.

The Commission ruled (Case No. U-18383) that the current net metering program should remain in place until new distributed generation tariffs are approved after June 1, 2018. Customers who enroll in the program before any new tariffs are approved, can lock into place the current service rules for 10 years. Anyone who signs up after the new tariffs are in place will be subject to new rules that are approved in any electric rate case filed after June 1, 2018.

Voluntary green pricing program

Also under Public Act 342, electric utilities must offer customers the option to participate in a voluntary green pricing program where customers can specify the amount of electricity provided to the customer that will be generated from renewable energy.

In its guidance to utilities Wednesday (Case No. U-18349 et al) regarding voluntary green pricing programs, the Commission set an Oct. 18, 2017, deadline for utilities to submit their programs for review. In evaluating the programs, the Commission will look at whether different customer preferences or objectives are met, how program costs are calculated, how much of fees go to marketing and administration and whether the program is based on cost-of-service principles. The Commission also said the programs should be reevaluated at least every two years, beginning in October 2019.

DTE Electric certificate of necessity

DTE Electric Co. is the first utility to file a Certificate of Necessity, as required under Public Act 341, informing the Public Service Commission of its intent to seek approval of new electric generating resources. A utility must submit a filing announcement at least 30 days in advance of filing an application. DTE filed their announcement (Case No. U-18419) on June 30, 2017, and under the new law the Commission must rule within 270 days of DTE filing their application. The Commission opened a contested case docket allowing competitive electric suppliers producing at least 200 MW of capacity in Midcontinent Independent System Operator, Inc. (MISO) Zone 7 and other intervenors to propose alternatives to the Commission.

In DTE’s filing, the utility plans to either build an approximately 1,100 MW natural gas combined cycle generating facility or to buy that capacity from another power provider. The utility said it would decide on whether to build a facility or buy capacity by the end of July.

Electric choice caps set

The Public Service Commission adjusted the electric choice cap for 11 utilities that each serve fewer than 200,000 customers in Michigan. Public Act 341 directs the Commission to adjust the cap for no more than two consecutive calendar years if the utility has not had any load served by an alternate electric supplier (AES) in the preceding four years. The cap will be automatically reset at 10 percent with a utility’s Feb. 1, 2019, choice cap filing. The cap sets the percentage of customers who can be served by alternative electric suppliers (AESs) in a utility’s service area.

The Commission set the cap at zero percent for Alger Delta Cooperative Electric Assn. (Case No. U-18372), Alpena Power Co. (Case No. U-16086), Bayfield Electric Cooperative (Case No. U-18373), Cherryland Electric Cooperative (Case No. U-18374), Great Lakes Energy Cooperative (Case No. U-18376), HomeWorks Tri-County Electric Cooperative (Case No. U-18377), Indiana Michigan Power Co. (Case No. U-16090), Midwest Energy Cooperative (Case No. U-18378), Northern State Power Co.-Wisconsin (Case No. U-16091), Ontonagon County Rural Electrification Assn. (Case No. U-18389), Presque Isle Electric & Gas Co-op (Case No. U-18388), and Thumb Electric Cooperative (Case No. U-18379).

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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