MPSC approves renewable energy pilot program for large businesses served by Consumers Energy

August 23, 2017

LANSING, Mich. - The Michigan Public Service Commission (MPSC) today conditionally approved a pilot renewable energy program Consumers Energy Co. will offer to its large business customers.

The Voluntary Large Customer Renewable Energy Pilot Program (Case No. U-18393) allows businesses to support the development of renewable energy resources and have a greater part of their electric usage attributed to renewable resources. The program was initiated by a survey Consumers conducted of its large business customers, who said they thought it was important to have access to new renewable energy projects and wanted a longer-term fixed price.

Business customers who use at least 1 MW of power annually qualify for the pilot green pricing program. Participants can designate how much of their energy use – from 20 percent to 100 percent – to match with energy produced from a Consumers-owned wind turbine facility. Participating customers pay a fee of 4.5 cents per kilowatt hour above their regular rates and receive a market-based credit for the wind energy.

The state’s new energy laws require utilities to develop voluntary green pricing programs. The Commission has set an Oct. 18 deadline for utilities to submit programs for review and a workgroup is evaluating aspects of the programs and what the law requires.

Other MPSC decisions

U.P. gas transmission: A settlement agreement was approved allowing SEMCO Energy Gas Co. to build a nearly 43-mile natural gas pipeline (Case No. U-18202). The Marquette Connector Pipeline consists of a 36.2-mile 20-inch segment and a 6.4-mile 10-inch segment between Wells Township and Marquette in Marquette County. The pipeline will increase natural gas service reliability for customers in the Upper Peninsula and allow for the expansion of natural gas use.

Consumers natural gas pipeline: Consumers will be allowed to build an approximately 1-mile, 12-inch natural gas pipeline in Comstock, Mich. The Kalamazoo River Lateral will transport natural gas to the Michigan Power electric generating plant and cost approximately $3 million. Under a settlement agreement (Case No. U-18422) the pipeline will be in operation in December and will not affect customer rates.

Renewable energy plans: Requirements were finalized (Case No. U-18409) and approved to give utilities guidance on changes to make in their renewable energy plans (REPs) in compliance with the passage of the state’s new energy laws. The Commission said plans are based on 20-year forecasts which began in 2009 and look ahead to 2029. They will describe how a utility will meet the new 15 percent renewable energy mandate in 2021.The renewable energy plans eventually will need to be coordinated with a utility’s Integrated Resource Plan.

Energy waste reduction incentives: A legal issue was resolved in Consumers Energy Co.’s 2016/17 Energy Waste Reduction Plan (Case No. U-17771). The Commission initially approved Consumers’ plan amendment on July 31, but today provided clarity on the effective date of higher financial incentive awards. The MPSC ruled that the higher incentives were applicable after April 20, when the state’s new energy laws went into effect. Under the new laws, providers must demonstrate that they are able to cost-effectively reach required energy waste reduction (EWR) targets, and they are eligible to earn financial incentives if they can attain higher EWR savings levels. The laws link tiered financial incentives to the percentage of annual incremental savings a provider achieves. The MPSC has previously found that for every dollar spent on EWR activities, customers can expect to see an average of $4 in savings.

Gas supplier application: Starion Energy NY, Inc. has been granted a license as an alternative gas supplier in Michigan (Case No. U-18366). The Middlebury, Conn., company serves mainly East Coast states, but began supplying customers in Ohio in 2014 and will offer service in Indiana later this year. Its Michigan office is in Ann Arbor.

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