MPSC approves contract for Consumers Energy to purchase 166-megawatt wind farm in Hillsdale County

FOR IMMEDIATE RELEASE   October 7, 2019

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LANSING, Mich. – The Michigan Public Service Commission today approved an application by Consumers Energy Co. to purchase a 166-megawatt wind farm in Hillsdale County.

Under the agreement, Crescent Wind, LLC would design, engineer, build, start-up and test the project, and upon completion, Consumers Energy would purchase the wind farm located in Adams, Moscow and Wheatland townships (Case No. U-15805). The farm is expected to be in commercial operation on or before Dec. 31, 2020.

Consumers, in its request for approval of the agreement, said the Crescent Wind project would have a 31-year levelized cost of energy of approximately $48 per megawatt hour, provided Consumers qualifies for the full value of the federal production tax credit. That projected cost is lower than the levelized cost of energy of $57.75 per megawatt hour projected in Consumers’ Renewable Energy Plan approved by the Commission in February (Case No. U-18231).

Consumers said the installed cost for the Crescent Wind project is $1,506 per kilowatt, lower than the assumed cost of $1,560 per kilowatt projected in the company’s Renewable Energy Plan.

MPSC Staff conducted a review of Consumers Energy’s request for proposals that resulted in the proposed agreement with Crescent Wind. Staff concluded that the RFP processes complied with earlier Commission orders, are reasonable and prudent and comply with Public Act 295 of 2008, known as the Clean and Renewable Energy and Waste Reduction Act.

The Commission’s order also provided assurance, sought by Consumers Energy, that the full cost of the Crescent Wind Project will be recoverable under the Company’s power supply cost recovery process.

MPSC GRANTS REHEARING ON CONSUMERS ENERGY DEMAND RESPONSE COSTS

The MPSC today granted a rehearing and revised a previous order dealing with Consumers Energy Co.’s demand response costs (Case No. U-20164). On July 18, 2019, a Commission order amended Consumers’ 2018 demand response reconciliation filing (Case No. U-20563) to include capital expense and operations and maintenance amounts dating back to November 2015, to ensure an accurate accounting of costs associated with the program, which helps customers shift demand during peak times when energy prices are high. Today’s order agrees with Consumers that the Commission’s order on Sept. 15, 2017, in Case No. U-18369 was not clear on the applicable time period. The Commission ordered that Consumers reflect a 2017 demand response regulatory liability of $489,633 in its next electric rate case.

MPSC SEEKS COMMENT ON PROPOSED INCREASES IN REGULATORY FEES FOR NATURAL GAS, PETROLEUM PIPELINES

Due to a shift in regulatory workload, the MPSC’s fees for pipeline regulation haven’t kept pace with actual costs. The Commission today announced it is proposing a new fee schedule and is seeking input from affected companies (Case No. U-20634). The proposed base application fee would be $2,000 for an ex parte case and $10,000 for a contested case. Direct costs that exceed this base amount, as applicable, would be tracked and billed separately under the Commission’s proposal. Among additional costs, the Commission proposes billing companies for the actual cost of staff time and expert testimony, onsite inspection, external public meetings, court reporter fees and environmental reporting and testing. The Commission said the need for the updated fee structure arises out of concern that the MPSC’s actual costs exceed current pipeline fees, leading to the potential of other regulated utilities subsidizing the Commission’s regulatory activities surrounding natural gas producers, natural gas pipelines and common carrier petroleum pipelines. Parties affected by the fee changes were given 21 days to file comments.

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

To watch a livestream of the MPSC’s meetings, click here.

For information about the MPSC, visit www.Michigan.gov/MPSC, sign up for one of its 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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