MPSC: State's and region's electric capacity supplies tightening

July 22, 2016

Contact: Judy Palnau, 517-284-8300
Agency: Michigan Public Service Commission

LANSING, Mich. - While Michigan's near-term electric supply outlook for the summer of 2017 in the Lower Peninsula has improved slightly, the Michigan Public Service Commission’s (MPSC) five-year outlook through 2020 illustrates yet again the tightening of capacity supplies overall, in both the state and the Midwest, the MPSC said today.

"The Commission remains concerned that load serving entities in the Lower Peninsula do not have adequate capacity within the state to meet reliability requirements," said MPSC Chairman Sally Talberg. "There also is uncertainty whether capacity supplies at the regional level will be available fill this gap. This potential shortfall could create reliability challenges during periods of peak demand in the 2017-2018 timeframe. The regional supply outlook is important in examining the balance of demand and supply because we rely on imports from out of state to meet the minimum reliability requirements.

"Given the overall electric energy outlook in Michigan and the broader region, long lead times for planning and developing new supply options, and the reliability risks inherent with tightening power supplies, the MPSC will increase its focus in the next couple of years on solutions to ensure customers can be served in a reliable, cost-effective manner over the long term."

The MPSC's order today in Case No. U-17992 summarizes the findings of the investigation into the adequacy and reliability of the electric generation capacity for meeting customer requirements from 2016 through 2020. It shows that the near-term supply outlook for the summer of 2017 in the Lower Peninsula's Zone 7 is forecasted to improve, despite the unexpected closure of a unit at DTE Electric's River Rouge plant in November 2015 due to turbine failure. The MPSC staff's analysis last year for 2017 showed a capacity shortfall of 520 MW, while its analysis this year for 2017 shows a capacity shortfall of only 270 MW. In its analysis, the MPSC staff notes that resources outside the zone are expected to be available to import power into Michigan.

Both the areas served by Indiana Michigan Power Company in southwest Michigan and the Upper Peninsula are projected to have adequate supplies.

At the regional level, the supplies are forecasted to be adequate overall for 2017 but by 2018 the Midwest region as a whole will not meet the reserve margin requirements, if the announced retirements of electric generating plants in Illinois actually materialize.

"Resource adequacy continues to be a key priority for the MPSC, especially in light of the changing generation mix throughout the nation and the closing of many coal plants, including those in Michigan," added Talberg. "From the Commission’s perspective, this can best be achieved through clear guidelines for load serving entities and a transparent process to identify, vet and approve various supply- and demand-side options."

Additional MPSC actions today include:

Case No. U-17377: The MPSC approved a funding factor of 96 cents per meter per month for the Low Income Energy Assistance Fund for the September 2016 through August 2017 billing months. Utilities that have opted out of the surcharge shall not shut off service to any residential customer from Nov. 1 through April 15, 2017, for non-payment of a delinquent account.

Case No. U-17473: The MPSC approved a request by Consumers Energy Company to implement a true-up adjustment to its securitization surcharges. Residential electric customers using 500 kilowatt-hours of electricity a month will see a 1-cent decrease on their monthly bills, for the period August 2016 through July 2017.

Case No. U-18016: The MPSC approved a settlement agreement authorizing SEMCO to reconcile its 2015 energy optimization plan costs and revenues. Residential customers using 100 ccf of natural gas a month will see an increase of $1.10 on their monthly bills, beginning with the next full billing cycle.

Case No. U-18077: The MPSC approved a settlement agreement authorizing Consumers Energy Company to apply a one-month per customer surcharge to collect or refund revenue decoupling mechanism revenues in the amount of $325,781. Residential customers will see a decrease of 22 cents on their September natural gas bill.

Case No. U-18120: The MPSC said it will hold a public hearing in Lansing regarding the adoption of rules governing consumer standards and billing practices for residential and nonresidential electrical and gas service.

To provide the public with an opportunity to comment on the proposed rules, the MPSC will hold the public hearing at 9 a.m. on Sept. 22, at 7109 W. Saginaw Highway. Written comments regarding the proposed rules may be submitted. Comments should reference Case No. U-18120 and must be received no later than 5 p.m. on Oct. 13. Address mailed comments to: Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909. Electronic comments may be emailed to mpscedockets@michigan.gov. All information submitted to the MPSC in this matter will become public information available on the MPSC's website and subject to disclosure; and all comments will be filed in Case No. U-18120.

Case No. U-18121: The MPSC directed the Michigan Agency for Energy (MAE) staff, on behalf of the MPSC, to conduct an investigation into the alleged unauthorized switching of natural gas customers by Direct Energy Services, LLC. The Commission and MAE want to ensure that customers are not switched without proper authorization and, if unauthorized switching occurred, to determine if any fine or penalty is appropriate. The MPSC also directed the alternative gas supplier to file a report within 30 days.

Case No. U-17992, U-17377, U-17473, U-18016, U-18077 U-18120 and U-18121

For more information about the MPSC, please visit www.michigan.gov/mpsc or sign up for one of its listservs to keep up to date on MPSC matters.