MPSC sets home energy assistance funding factor at 91 cents and takes action on renewable energy contracts, other matters

FOR IMMEDIATE RELEASE   July 23, 2020

Media Contact: Matt Helms 517-284-8300
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The Michigan Public Service Commission today set at 91 cents the funding factor for the annual Low-Income Energy Assistance Fund (LIEAF) that provides up to $50 million in home energy assistance for vulnerable households.

The funding factor (Case No. U-17377) represents a one-cent decrease from the previous year. Each year, the MPSC sets the rate, which may not exceed $1 per meter (and only one meter per residential customer), to raise a maximum of $50 million annually for home energy assistance through participating utilities. The charge will be effective for the September billing month.

Public Act 95 of 2013 created the LIEAF within the State Treasury and authorizes the MPSC to approve a LIEAF funding factor no later than July 31 of each year for the subsequent fiscal year.

Electric utilities that opt out of collecting the funding factor by law cannot shut off service to any residential customer Nov. 1 through April 15 for nonpayment of a delinquent account. There was no change in the utilities choosing to participate or opt out.

Utilities that filed notice to participate this year are: Northern States Power Co., Consumers Energy Co., DTE Electric Co., Indiana Michigan Power Co., Upper Peninsula Power Co., Alpena Power Co., Alger Delta Cooperative Electric Association, Great Lakes Energy Cooperative, Midwest Energy Cooperative, HomeWorks Tri-County Electric Cooperative, Presque Isle Electric & Gas Co-op, Thumb Electric Cooperative, the Village of Baraga, Bay City Electric Light & Power, Croswell Light & Power Department, the City of Crystal Falls, the City of Dowagiac, the City of Gladstone, City of Hart Hydro, Hillsdale Board of Public Utilities, the City of Marshall Electric Department, Negaunee Department of Public Works, Newberry Water & Light Board, Niles Utilities Department, the City of Norway, the City of Petoskey, the City of St. Louis, and Union City Electric Department.

Bayfield Electric Cooperative, Upper Michigan Energy Resources Company, Cloverland Electric Cooperative, Ontonagon County Rural Electrification Association, Cherryland Electric Cooperative, City of Charlevoix, Chelsea Department of Electric and Water, Village of Clinton, Coldwater Board of Public Utilities, Daggett Electric Department, City of Eaton Rapids, City of Escanaba, Grand Haven Board of Light and Power, City of Harbor Springs, Holland Board of Public Works, Village of L’Anse, Lansing Board of Water & Light, Lowell Light and Power, Marquette Board of Light and Power, Village of Paw Paw, City of Portland, City of Sebewaing, City of South Haven, City of Stephenson, City of Sturgis, Traverse City Light & Power, City of Wakefield, Wyandotte Department of Municipal Service, and Zeeland Board of Public Works all filed notice of their intent to opt out. In addition to precluding utilities from disconnecting customers for non-payment during the winter heating season, state law also requires that assistance funds generated from a specific area be returned to that same area, to the extent possible.

MPSC APPROVES RENEWABLE ENERGY CONTRACTS, AMENDMENTS

The MPSC today approved six orders granting approval to utility companies for renewable energy projects, including solar, hydro-electric, landfill gas, and waste-to-energy facilities. The orders authorize:

  • Consumers Energy power purchase agreements (PPAs) with Black River Limited Partnership for the output of the Alverno Hydro Plant; the City of Beaverton for the output of the City of Beaverton Hydro Plant; Elk Rapids Hydroelectric Power LLC for the output of the Elk Rapids Hydro Plant; Kent County Board of Public Works for the output of the Mass Burn Incinerator Plant; Tower Kleber LP for the output of the Kleber and Tower hydro plants; Michiana Hydroelectric Company for the output of the Bellevue Gothic Mill Plant, and White’s Bridge Hydro Co. for the output of the White’s Bridge Hydro Plant. The PPAs (Case No. U-20838) are expected to reduce costs by nearly $2.6 million over the life of the contracts.
  • Additional PPAs between Consumers Energy and Durban Solar, LLC; Esmarelda Solar, LLC,  and Shady Solar, LLC (Case No. U-20604). The PPAs, for 20-year terms and generate 30 megawatts, are projected to cost nearly $72 million, not impacting customer rates. The PPAs result from a September 2019 settlement agreement (Case No. U-20615) that resolved disputes between Consumers Energy and qualified independent power producers over the Public Utility Regulatory Policies Act of 1978.
  • Indiana Michigan Power Co.’s (I&M) amended renewable energy plan incorporating the 20-megawatt South Bend Solar Project, a company-owned and -operated facility in South Bend, Indiana., with Michigan’s jurisdictional share accounting for 3 megawatts (Case No. U-20765). Commercial operation is expected by April 2021.
  • Amendments to Consumers Energy’s PPA contract for the output of the landfill gas-powered Venice Park Generating Station, and renewable energy purchase agreement (REPA) for the output of the landfill gas electric Lennon Generating Station, both owned by North American-Central LLC (Case No. 15805). An amended and restated Venice Park PPA applies after generation begins at a new plant site for both facilities, the Pierson Road Landfill Generator Unit Number One, after January 1, 2022, with an expected increased cost of $264,000 over the life of the Venice Park contract, affecting rates only of customers enrolled in Consumers’ voluntary Renewable Resource Program. The amended Lennon REPA reduces Consumers’ purchase obligation from 14,497 renewable energy credits to 13,315, and modifies the performance requirement for the generator from 90 percent to 80 percent, with an expected reduction in costs of $530,000 over the life of the contract.
  • Upper Michigan Energy Resource Corp.’s (UMERC) voluntary green pricing (VGP) program that allows customers to specify the amount of electricity they use is generated from renewable energy sources, with additional costs paid by the customer (Case No. 18356). The VGP program is called Energy for Tomorrow for customers in its WEPCO rate zone and Naturewise for customers in its WPSC rate zone. UMERC does not own renewable energy resources, so its VGP programs are met through securing renewable energy credits by contract from North American Natural Resources, Inc. The Commission emphasized the importance of UMERC filing sufficiently detailed semiannual reports that will help the Commission to evaluate and identify ways to improve the utility’s VGP programs.
  • Consumers Energy’s PPAs with STS Hydropower LLC for the output of the Cascade and Fallasburg hydro plants, with expected rates of $63.07 per megawatt hour at Cascade and $60.23 at Fallasburg (Case No. U-20833). The net savings to customers over the life of the 20-year contracts is about $950,000.

DEFERRED ACCOUNTING APPROVED FOR MICHIGAN GAS UTILITIES CORP.

The MPSC today approved deferred accounting for Michigan Gas Utilities Corp. (MGU) of $5 million in capital investments made between Jan. 1, 2016, and Dec. 31, 2019 (Case No. U-20797). The Commission approved MGU’s request for the deferred accounting at $5 million associated with capital investments that MGU has made since its last rate case was approved in 2015 to ensure safe, reliable service. The company agreed with MPSC staff to delay until 2021 filing for a general rate increase, which it had intended to seek in March 2020, because of the impact of the coronavirus pandemic. The deferred accounting will not raise customer rates and the associated capital investments will be reviewed for prudence in any future rate proceeding.

MPSC OKS EXPANDED SERVICE AREAS FOR I-WIRELESS TO PROVIDE DISCOUNTED PHONE SERVICE

i-wireless today won approval for expansion of its status as an eligible telecommunications carrier for purposes of offering Lifeline discounted phone service to eligible low-income households (Case No. U-16465). The company applied on June 4, 2020, to add additional wire centers so it could operate in territories of the Grand Traverse Band of Ottawa and Chippewa Indians; Nottawaseppi Huron Band of the Potawatomi; Little River Band of Ottawa Indians; Little Traverse Bay Bands of Odawa Indians; Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians; Saginaw Chippewa Indian Tribe of Michigan, and Sault Ste. Marie Tribe of Chippewa Indians. In its application, i-wireless will seek to meaningfully engage with the Tribes to improve the provision of Lifeline service on tribal lands.

MPSC ISSUES ENERGY WASTE REDUCTION ORDERS FOR TWO U.P. UTILITIES

The MPSC today ordered Northern States Power-Wisconsin (NSP-W), which serves parts of the western Upper Peninsula, to raise its energy waste reduction (EWR) target to 1.5% of total annual electric sales in 2021 (Case No. U-20375), and for MSPC staff to work with NSP-W’s EWR administrator, Efficiency United, in communication with NSP-W, to develop a new alternative compliance payment and corresponding customer charges within 30 days. Meanwhile, the Commission directed Upper Michigan Energy Resources Corp. (UMERC) to keep its current EWR targets but to work on ways to increase energy savings using the existing funding levels (Case No. U-20377).

MPSC APPROVES ONE-TIME CREDITS, CHARGES FOR INDIANA MICHIGAN POWER CUSTOMERS

The MPSC today approved requests by Indiana Michigan Power Co. (I&M) to provide refunds to some classes of its customer base and to collect a one-time surcharge from other customers to make up for a previous over credit (Case No. U-20316). The requests resolve residual balances resulting from I&M’s accounting of how its savings under the corporate tax cuts from the 2017 federal Tax Cuts and Job Act would be returned to ratepayers. One-time credits will be implemented with the August 2020 billing cycle, and one-time surcharges with the October 2020 billing cycle. After these credits and surcharges, I&M may use any remaining residual balance under $30,000 as a charitable donation.

CONSUMERS ENERGY’S ADJUSTED SECURITIZATION SURCHARGES APPROVED

The MPSC today approved Consumers Energy Corp.’s true-up adjustment report on customer surcharges for the period of August 2020 through July 2021 to cover payments on securitization bonds for $389.6 million of qualified costs for the early retirement and demolition of three coal-fired power plants: B.C. Cobb units 1-5, Weadock units 7-8, and J.R. Whiting units 1-3 (Case No. U-17473). Consumers Energy in June filed its sixth annual routine true-up adjustment report, proposing adjustments the Commission today found accurate and conforming to the methodology approved by the Commission. The adjusted surcharges, shown separately on customers’ bills, will be effective beginning with the August 2020 billing month.

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

To watch recordings 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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