Michigan electricity providers demonstrate sufficient capacity to serve customers reliably through 2024-2025

FOR IMMEDIATE RELEASE  July 2, 2021

Media Contact: Matt Helms 517-284-8300
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The Michigan Public Service Commission today accepted the Capacity Demonstration Results Reports from Michigan's electricity providers for the 2024-25 planning year, finding that all will meet reliability requirements established under the 2016 updates to Michigan's energy laws (Case No. U-20886).

The reports cover capacity demonstrations from investor-owned electric utilities, alternative electric suppliers (AESs), rural electric cooperatives, and municipally owned electric utilities to meet obligations set by regional transmission operators (RTOs). Michigan is served by two RTOs: Midcontinent Independent System Operator (MISO), which covers most of the state, and PJM Interconnection, which covers a portion of the southwestern Lower Peninsula.

Michigan is the only state in the MISO territory to require electricity providers to demonstrate four years in advance that they will be able to meet peak customer demand through their own generation facilities or contracts with other suppliers. MISO requires that electricity providers plan only one year in advance and offers a capacity market for those who still need to procure capacity for the current year. Michigan's longer-term view allows providers more time to build or buy resources to serve customers and helps to avert widespread outages and rolling blackouts. Having sufficient supply helps keep electricity prices down by limiting price spikes caused by expensive last-minute purchases when supplies are tight - an issue that became critical in Texas this winter as a lack of capacity during severe winter storms led to blackouts and skyrocketing prices.

The Commission established a new docket (Case No. U-21099) for MPSC-regulated electric utilities to file capacity demonstrations for the 2025-26 planning year by 5 p.m. on Dec. 1, 2021, and all other providers by 5 p.m. Feb. 9, 2022, including resource data for the current planning year and the interim years.

MPSC Staff must file its report analyzing the sufficiency of the 2025-26 capacity demonstrations by March 25, 2022.

For more information about capacity demonstrations, see the MPSC's issue brief on the state's resource adequacy law.

MPSC REQUESTS COMMENT ON PROPOSED FUNDING FACTOR FOR LOW-INCOME ENERGY ASSISTANCE FUND

The MPSC today asked for comments on its proposal to set the funding factor for Michigan's Low-Income Energy Assistance Fund at 87 cents (Case No. U-17377), a decrease of 4 cents from the previous year. The MPSC sets the funding factor each year, capped at $1, and it is collected monthly from each retail billing meter from participating investor-owned utilities, municipally owned electric utilities or rural cooperative electric utilities - no more than one meter per household - to raise a maximum of $50 million per year. This money is distributed through the Michigan Energy Assistance Program, or MEAP, which provides energy assistance payments and self-sufficiency services to tens of thousands of qualifying households each year. Comments must be received by 5 p.m. July 9, 2021. Written comments may be mailed to Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909. Electronic comments may be emailed to mpscedockets@michigan.gov. All comments should reference Case No. U-17377.

MPSC SEEKS INPUT ON PROPOSED COMPETITIVE BIDDING GUIDELINES

The MPSC is seeking comments from stakeholders as the agency moves forward with updating competitive bidding guidelines as part of the Commission's MI Power Grid initiative (Case No. U-20852). MPSC Staff on June 22 filed its Competitive Procurement report with draft guidelines for rate‐regulated electric utilities, not involving compliance with the federal Public Utility Regulatory Policies Act (PURPA), and for rate‐regulated electric utilities for PURPA avoided cost and capacity determinations. The MPSC asks stakeholders to provide comments on potential adoption of the draft competitive procurement guidelines, initiation of a rulemaking proceeding and other possible next steps. Comments must be received by 5 p.m. July 30, 2021. Written comments may be mailed to Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909. Electronic comments may be emailed to mpscedockets@michigan.gov. All comments should reference Case No. U-20852.

MPSC ADOPTS PROCESS FOR REVIEWING DISPUTES INVOLVING PURPA IN WAKE OF FERC ORDER 872

The MPSC in October 2020 sought input from electric providers and stakeholders on the impact of the Federal Energy Regulatory Commission's Order 872 on the implementation of the Public Utility Regulatory Policies Act of 1978 (PURPA), the federal law enacted amid the energy crisis and aimed at encouraging competition, conservation, reliability and efficiency in generating and delivering electricity (Case No. U-20905 et al). In response to the input received, the MPSC today detailed expedited, more cost-effective review proceedings to settle disputes over legally enforceable obligations (LEOs) involving qualifying facilities (QFs). The Commission directed Consumers Energy Co., Upper Peninsula Power Co., Upper Michigan Energy Resources Corp. and Indiana Michigan Power Co. to file an application containing their LEO criteria by 5 p.m. Sept. 1, 2021. Alpena Power Co. was directed to file the same application as part of its next biennial avoided cost review. The Commission also directed MPSC Staff to develop and publish on the agency's website by Sept. 1, 2021, a standardized LEO review request form for initiating a review proceeding.

MPSC OKs ALPENA POWER HYDROELECTRIC CONTRACTS

The MPSC has approved power purchase agreements between Alpena Power Co. and Thunder Bay Power Co. for the output of four hydroelectric generating facilities on the Thunder Bay River (Case No. U-21094). The contracts are for nearly 8 megawatts (MW) of electricity from facilities known as Hillman (.25 MW), Norway Point (4 MW), Four Mile (2.4 MW) and Ninth Street (1.2 MW) from July 1, 2021, to Dec. 31, 2024, using previously approved avoided cost rates, and after Jan. 1, 2025, at new avoided cost rates. The contracts automatically renew on Dec. 31, 2024, although both companies having the right to terminate the agreement with 90 days' notice after that date. The contracts will not impact customer rates.

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

Watch recordings of the MPSC's meetings on the MPSC's 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 or LinkedIn.

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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