MPSC approves amended power purchase agreement, dispute settlement between Consumers Energy and major electricity supplier

FOR IMMEDIATE RELEASE  March 4, 2021

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The Michigan Public Service Commission today approved an amended and restated power purchase agreement (PPA) between Consumers Energy Co. and Midland Cogeneration Venture LP (MCV) as well as a settlement involving contracts between the utility and operators of the Midland power plant.

In Case No. U-20896, the Commission approved the PPA amendment that gives Consumers the unilateral option beginning Dec. 1, 2023, through March 15, 2024, of either purchasing the natural gas-fired combined electrical energy and steam energy generating plant in Midland or extending its PPA for five years at a reduced capacity rate. Consumers’ original PPA with MCV was first dated July 1986 and was an avoided cost contract under the federal Public Utility Regulatory Policies Act and amended and restated in 2010.

Pursuant to the option to purchase the plant or extend the PPA, Consumers and MCV executed Amendment No. 2, dated October 7, 2020, extending the amended and restated PPA from March 16, 2025, through May 31, 2030. This means that the PPA will continue through the end of the regional transmission operator Midcontinent Independent System Operator’s resource adequacy period, ensuring that MCV receives market revenue from zonal resource credits delivered to the company under the PPA through the entire contract term.

Consumers contends the Amendment No. 2 will have a number of benefits for customers, including cost savings of $61.4 million compared to the cost of allowing the amended and restated PPA to terminate on March 15, 2025, and procuring replacement energy and capacity from the wholesale market. The amendment also ensures a reliable capacity resource within MISO’s Zone 7 between 2025 and 2030.

In Case No. U-17953, the Commission also approved a settlement agreement between Consumers and MCV stemming from long-running disagreements involving the obligations in two of three natural gas transportation and storage contracts. The Commission found the settlement in the public interest and a fair and reasonable resolution to a dispute that began in 2015.

MPSC REVOKES LICENSES OF BASIC LOCAL PHONE SERVICE PROVIDERS

The MPSC today revoked licenses to provide basic local exchange service for several companies that had been grossly deficient in meeting statutory and regulatory requirements of local phone service providers under the Michigan Telecommunications Act (Case No. U-20892). The Commission revoked licenses for AirNorth Communications Inc; CMC Telecom Inc.; Global Communications Network Inc. (formerly known as Castle Wire Inc., formerly known as Business Communications Analysts Inc.); IQ Telecom Inc.; Lucre Inc.; Michigan Access Inc., and Rockford Telephone Co. Inc.

CONSUMERS ENERGY RECONCILIATION SETTLEMENT APPROVED

The MPSC today approved a settlement agreement between Consumers Energy Co. and MPSC Staff reconciling revenues from an investment recovery mechanism (IRM) approved for the utility in 2018 for the company to recover annual revenue requirements associated with some of its capital expenditures and direct expenses for specified distribution and transmission programs beyond what was approved in rates (Case No. U-20893). Consumers determined that it owes a refund of $214,000 to customers attributable to the July-September 2019 billing period. The money will appear as a per-customer credit on May 2021 customer bills.

To look up cases from today’s meeting, access the MPSC’s E-Dockets filing system.

Watch recordings of MPSC meetings on its YouTube channel.

For information about the MPSC, visit www.Michigan.gov/MPSC, sign up for its monthly newsletter or other listservs, or follow the Commission on Twitter.

DISCLAIMER: This document was prepared to aid the public’s understanding of certain matters before the Commission and is not intended to modify, supplement, or be a substitute for the Commission’s orders. The Commission’s orders are the official action of the Commission.

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