Michigan Agency for Energy
November 17, 2016
Upper Peninsula residents can give thanks for lower electric bills
U.P. residents will not pay extra charges for reliability for first time since 2012
LANSING, Mich. – For the first time since 2012, electric customers in the Upper Peninsula will not be paying federally-set system support resources (SSR) payments, which keep uneconomic electric plants that owners wish to retire running to maintain electric reliability. Today, the federal government approved ending these charges on November 26.
Overall, U.P. residents have paid more than $25 million in SSR payments since 2012, and if Michigan is unsuccessful in pending legal challenges, may be required to pay up to an additional $48 million for past charges. The Federal Energy Regulatory Commission (FERC) approved ending the final SSR in place for White Pine Unit 1, stopping ongoing SSR payments and saving U.P. residents roughly $28 million through the end of 2019, or more than $7 million a year.
“As we celebrate the Thanksgiving Day holiday, electric customers in the U.P. can be truly thankful that they have reliability at a much lower cost than they did in previous years, when they were paying federally-set charges that were not put to the smell test,” said Valerie Brader, executive director of the Michigan Agency for Energy. “Thanks to Michigan’s vigorous legal intervention on behalf of U.P. residents and a cooperative, creative approach from the entities charged with ensuring reliability, there will be a little extra money in consumers’ pockets this winter.”
“This is a big win for utility customers in the U.P.,” said Sally Talberg, chairman of the Michigan Public Service Commission (MPSC). “The MPSC has been strongly advocating with other agencies and stakeholders to put an end to these charges while ensuring our power system in the U.P. is reliable.”
“Michigan residents can be confident we will continue to fight against unreasonable charges at every opportunity,” said Michigan Attorney General Bill Schuette. “We will also continue to press the federal government to approve new rules that will stop putting these charges on people’s bills before consumer advocates have a chance to make sure they are fair.”
The first SSR payment in the U.P. began on June 15, 2012, to keep the Escanaba plant running after owners sought to retire the plant. That SSR ended on June 14, 2015.
The second SSR payment in the U.P. was for the Presque Isle Power Plant, but it ended in 2014 as part of a deal negotiated by Gov. Rick Snyder, Attorney General Bill Schuette, the MPSC staff, Cliffs Natural Resources, and Wisconsin Energy Corporation. The historical SSR charges for this plant are the subject of intense litigation, and an administrative law judge at FERC agreed earlier this year with Michigan that electric customers had been massively overcharged.
To keep the White Pine generator running, SSR payments began on April 15, 2014, after owners sought to retire the plant. A recently approved proposal by American Transmission Company (ATC) and the Midcontinent Independent System Operator (MISO) identified a way to secure reliability without the White Pine generator.
In the Lower Peninsula, SSR payments related to the Harbor Beach (DTE) SSR ended September 30, 2013 and payments for the Straits and Gaylord SSRs (both Consumers Energy) ended on Sept. 30, 2014.
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