MPSC approves agreements between Consumers Energy and suppliers of solar, wind power

FOR IMMEDIATE RELEASE   Dec. 19, 2019

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LANSING, Mich. — The MPSC today approved two agreements involving Consumers Energy Co. that support the utility’s expanding use of renewable sources of electricity.

The MPSC approved solar power purchase agreements (PPAs) between Consumers Energy Co. and affiliates of sPower Development Co. (Case No. U-20604). The sPower application resulted from a Sept. 11, 2019, settlement agreement (Case No. U-20615) that resolved rights and obligations under the federal Public Utility Regulatory Policies Act of 1978 between Consumers and numerous developers of new solar facilities in the utility’s interconnection queue.

The four PPAs in this application, each of which have 20-year terms and cover 75 megawatts of the 170 MW of full avoided cost PPAs identified in Case No. U-20615, consist of the following projects:

  • Cement City Solar, LLC, with a contract capacity of 20 MW;
  • Letts Creek Solar, LLC, with a contract capacity of 15 MW;
  • Thorn Lake Solar, LLC, with a contract capacity of 20 MW;
  • And Pullman Solar, LLC, with a contract capacity of 20 MW.

Separately, the MPSC approved a turbine purchase agreement between Consumers Energy Co. and General Electric Co. and a balance of plant engineering, procurement and construction agreement between the utility and contractor Barton Malow Co. for the Gratiot Farms Wind Project, a 150 MW wind farm in Gratiot County (Case No. U-15805). The agreements reflect an increase in the levelized cost of energy (LCOE) for the project, to $52 per megawatt-hour (MWh), up from $46 per MWh.

According to Consumers, the higher LCOE is attributable to the increased costs of steel because of import tariffs, and a change in the capacity factor for Gratiot Farms, nearly 2 percent lower than initially estimated. Consumers noted that while the LCOE for Gratiot Farms has increased, it remains lower than the $57.75 per MWh levelized cost for new wind projects in the utility’s renewable energy plan. Today’s order also provides assurance that the full costs of the project will be recoverable through the application of the transfer price schedule approved in the March 29, 2018, order in Case No. U-18241.

 

MPSC APPROVES SETTLEMENT AGREEMENT WITH ZFS ITHACA, LLC, OVER UNAUTHORIZED DEVIATION OF ROUTE OF PIPELINE IN GRATIOT COUNTY

The MPSC today approved a settlement agreement with agricultural company ZFS Ithaca, LLC, rectifying the company’s failure to get a proper environmental permit and substantially altering the route of its West Yankee Pipeline for its soybean processing facility in mid-Michigan’s Gratiot County (Case No. U-20198). The Commission found that ZFS made significant deviations from the approved natural gas pipeline route and did not acquire the appropriate wetlands permitting from the state Department of Environment, Great Lakes and Energy necessary to build the pipeline. The settlement resolves all issues in the case and approves ZFS’s application for an amended route for the pipeline.

MPSC SETS NEW FEES FOR PIPELINE APPLICATIONS

The MPSC today approved new fee structures for natural gas and petroleum pipeline applications that better reflect actual costs incurred by the agency for its regulatory work. In Case No. U-20634, the MPSC established a $2,000 fee for an ex parte pipeline application and $10,000 for a pipeline application in a contested case, with direct costs that exceed these base amounts tracked and billed separately, as applicable. The additional costs would cover the actual cost of MPSC Staff time and expert testimony, external public meetings, court reporter fees, and environmental reporting and testing. The Commission said the MPSC's actual costs often exceeded previous fees, which meant other regulated utilities were potentially subsidizing the Commission's regulatory activities surrounding natural gas producers, natural gas pipelines and common carrier petroleum pipelines.

DETROIT THERMAL SETTLEMENT AGREEMENT APPROVED

The MPSC approved a settlement agreement for Detroit Thermal, LLC’s, steam supply cost recovery plan related to the shutdown in March 2019 of Detroit Renewable Power’s operation of its Detroit incinerator. The incinerator burned municipal waste to supply approximately 75% of Detroit Thermal’s steam requirements, forcing Detroit Thermal to revamp operations and meet 100 percent of its steam requirements through use of natural gas-fueled boilers. The settlement agreement (Case No. U-20237) includes a suspension of the steam supply cost recovery clause for a 24-month period beginning April 1, 2019, and other provisions.

MPSC BEGINS INQUIRY TO DETERMINE AVAILABILITY OF REPLACEMENT PHONE SERVICE AS TALK AMERICA SERVICES SEEKS TO EXIT MICHIGAN MARKET

The MPSC today directed all incumbent local telephone exchange carriers and competitive local exchange carriers operating in areas served by Talk America Services, LLC., (TAS) to provide the Commission with information about the comparable types of services with reliable 911 access they provide, as TAS seeks to exit the Michigan market. TAS filed notice in August (Case No. U-20623) that it intended to discontinue basic local exchange and toll service to its more than 4,600 Michigan customers as of Jan. 6, 2020, and that other providers offer comparable phone service in its place. The MPSC has received a dozen comments or formal complaints from TAS customers who’ve been unable to find basic local phone service that’s not required by providers to be bundled with cable or internet; some were offered no service at all. With today’s order, the Commission urges TAS to delay its discontinuance while the MPSC investigates the availability of replacement service. The Commission also directs incumbent and competitive local exchange carriers operating in TAS’ service areas to file statements listing all of the specific types of comparable voice service with reliable 911 access and emergency services they provide in the service area, by 5 p.m. Jan. 16, 2020. The Commission also requests that all VoIP and wireless service providers operating in Talk America Services’ service area to respond to this order.

MPSC APPROVES CONSUMERS ENERGY ACCOUNTING MEASURE TO ADDRESS POSSIBLE REFUND OF HIGHER THAN EXPECTED 2019 REVENUE

The MPSC today approved a request by Consumers Energy Co. for accounting authority to voluntarily refund up to $15 million to ratepayers, based on higher revenues than the company had anticipated in 2019 due to unforeseen circumstances. The utility noted in its request (Case No. U-20668) that it is not required to refund the revenue but concluded it was in its customers’ best interest to do so. The utility said the exact amount of the refund won’t be known until late December and will be based on the utility’s final year-end financial results. The manner of the refund will be determined in a later proceeding in 2020, based on a separate application from Consumers Energy. Public comments from any interested party on the methodology of the refund must be filed with the MPSC by 5 p.m. March 13, 2020.

COMMENT PERIOD EXTENDED FOR MPSC’S PROPOSED CHANGES TO GAS TECHNICAL STANDARDS

The MPSC is extending the time period for public comment on its proposal to amend rules governing the technical standards for gas service for utilities under the Commission’s jurisdiction (Case No. U-20608), including updated cybersecurity standards. In response to commenters, the MPSC is extending the public comment period to Jan. 9, 2020, to allow interested parties to review the American Petroleum Institute Standard 1164, which is available for public inspection at the Commission’s offices at 7109 W. Saginaw Highway in Lansing. Public comment need not be limited to the topic of the API standard. The state’s gas technical standards are intended to promote safe and adequate gas service to the public, provide standards for uniform and reasonable practices by utility companies, and to encourage efficiency and safety.

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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