MPSC report: Michigan's distributed generation program capacity grew 53% in 2019, adding nearly 3,000 new customers

FOR IMMEDIATE RELEASE   December 21, 2020

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Participation in Michigan’s distributed energy generation program continued to grow in 2019 as the program capacity increased 53%, according to the Michigan Public Service Commission’s annual report on the state’s distributed generation program.

Every year since 2006, participation has grown in the program, and 2019 was no different. The MPSC’s 2019 Distributed Generation Program Report found the program added nearly 3,000 customers, bringing the total to 8,147 customers and 8,331 installations in the calendar year, up from 5,219 customers and 5,379 installations in 2018. Some customers have multiple installations, so that number exceeds the total number of customers.

At year’s end, the total electric generation capacity of the installations was about 66,428 kilowatts (kW), an increase of 22,947 kW, or 53%, from the year before. While growing, DG projects account for a small portion of total retail electricity sales in Michigan, at around 0.07%.

Michigan’s DG program allows customers to generate their own electricity, mainly through solar and wind projects, to reduce their energy needs or electric bills. Michigan law allows utilities to limit participation in the program at 1% of their five-year average peak electricity load, with half of this amount allocated to smaller, residential-sized systems, and the other half for larger projects.

DTE Electric Co., Upper Peninsula Power Co. (UPPCO) and Indiana Michigan Power Co (I&M) have had Commission-approved DG program tariffs that replaced their net metering programs following the 2016 energy laws, and these utilities are joined now by Consumers Energy, whose DG tariff was approved last week as part of the Commission’s order in Consumers’ electric rate case (Case No. U-20697).

UPPCO reached its maximum participation level but in a 2019 settlement agreement agreed to double the size of its program.

While the report covers DG enrollment in 2019, it takes note of several developments that have happened since the end of 2019 given the pace of change:

  • Consumers Energy filed a letter on Nov. 19, 2020, providing notice to the Commission that its DG program had reached the program size limits for category 1 and category 2 projects sized less than 150 kW. In the letter, Consumers noted that it would consider doubling the size of its program after review of the DG tariff approved in its rate case order issued on Dec. 17, 2020. On Dec. 21, Consumers filed a letter confirming it would double its DG program’s capacity.
  • UPPCO reported that its program for Category 1 projects under the expanded cap provided for in its settlement agreement was more than 96% enrolled as of Dec. 1, 2020, with availably for just 53.3 kW of projects (e.g., three to four typical residential solar projects) before the company’s expanded cap is reached. For Category 2 projects, UPPCO still had 399 kW of 679 kW or just over 58% of capacity remaining.
  • DTE Electric, based on preliminary data provided by the company, had 29.5 MW participating out of a program cap of 54.7 MW for Category 1 projects, a subscribed rate of about 54%, as of early December 2020, and 5.7 MW out of 27.3 MW in Category 2, or 21%. DTE reported additions through the first 11 months of 2020 of approximately 4.9 MW in Category 1 projects and approximately 2.5 MW in Category 2 projects.

Of note, customers participating in DG programs increasingly are interested in pairing their generation with battery storage. The annual reporting form scope was expanded to include the new DG tariff and batteries for DTE Electric. For 2020, the new reporting form will be provided to all electric providers, and MPSC Staff will work toward complete information on DG program installations with batteries. At year-end 2019, DTE Electric reported 152 customers with batteries totaling 760 kW.

Other report highlights:

  • The state’s two largest utilities, DTE Electric and Consumers Energy, account for 89% of the program’s capacity.
  • At the end of 2019, DTE Electric and Consumers Energy had space remaining in their programs — 55% and 41%, respectively — for residential-sized projects up to 20 kW. UPPCO had the least amount of space available, at 17%.
  • Other utilities also had significant amounts of space available in their programs for up to 20 kW at the end of 2019: Alpena Power Co., 73%; Indiana Michigan Power Co., 74%; Upper Michigan Energy Resources Corp., 64%, and Xcel Energy, 81%.
  • Solar projects accounted for 96% of DG installations, significantly outnumbering wind turbine or hydroelectric projects.
  • Luce County in the Upper Peninsula remained the only county in Michigan without a DG project.

Michigan’s 2016 energy laws called for the MPSC to transition to a distributed generation program from a net metering program. The MPSC adopted new guidelines in 2017 under which DG programs become effective after a utility’s next rate case is approved.

Once a utility’s DG program is in effect, no new customers can join the net metering program, but current net metering customers can continue under that program’s guidelines for 10 years from the day they enrolled. The net metering program is now referred to as the legacy net metering program.

Read the 2019 Distributed Generation Program Report.

To learn more, read the read the MPSC’s issue brief on distributed generation.

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.

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