MPSC rejects Consumers Energy request to charge customers for natural gas replacement costs related to Ray compressor station fire

FOR IMMEDIATE RELEASE September 24, 2020

Media Contact: Matt Helms 517-284-8300
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The Michigan Public Service Commission today rejected a request by Consumers Energy Co. to allow the utility to recover from ratepayers some of the extraordinary costs related to supplying natural gas to customers in the aftermath of the 2019 polar vortex energy emergency sparked by a fire at the company’s Macomb County compressor station (Case No. U-20209).

Consumers had requested authority to reconcile an under-recovery of $17,473,154 in its gas cost recovery (GCR) costs for the year ending March 31, 2019. Of that amount, nearly $8 million was for additional costs to purchase natural gas to supply to customers because Consumers was unable to deliver gas it had already purchased and put into storage at the utility’s Ray Township storage field, in addition to colder than normal weather.

The Commission found that ratepayers shouldn’t be responsible for the additional supply costs associated with the loss of access to the stored gas. The Commission noted that the MPSC’s investigation found the January fire was caused by equipment problems at the Ray compressor station, and the company paid a fine to resolve alleged probable violations of federal gas safety standards (Case No. U-20463). The fire, coupled with colder than normal temperatures, led to a statewide energy emergency in which natural gas users were asked to turn down their thermostats to ensure there was enough gas to keep homes and businesses heated through a dangerous cold snap.

Given the MPSC investigation and Consumers’ own conclusions about the cause, the Commission found that Consumers, not ratepayers, should bear the costs associated with their inability to access gas from the Ray storage field.

The Commission’s order today disallowed $6,766,978, approving a total under-recovery of $10,889,058, including interest. The order does not impact rates paid by customers.

The Michigan Department of the Attorney General, Residential Customer Group and the Retail Energy Supply Association intervened in the case. MPSC Staff also participated.

MPSC OKS 3 CONSUMERS ENERGY VOLUNTARY GREEN PRICING PROGRAMS, SENDS FOURTH BACK FOR REFINEMENT TO ADDRESS CONCERNS

The MPSC today approved three voluntary green pricing (VGP) proposals by Consumers Energy Co., while rejecting a fourth. VGP programs were called for in the state’s 2016 energy laws and allow customers to designate how much of the electricity they use is to be generated from renewable sources.

The Commission’s order (Case No. U-20649) approves:

• Revisions to Consumers’ Solar Gardens program, approved by the Commission in October 2018 in Case. No. U-18351, requiring participating customers to commit to a 12-month term, adding 0.5 megawatts (MW) of solar capacity in the City of Cadillac, and adding MI Sunrise Solar, which provides income-qualified customers and nonprofit organizations access to solar energy.
• Revisions to Consumers’ Large Customer Renewable Energy Program that increase the annual maximum amount of renewable energy available through Option A to 400,000 megawatt-hours (MWh) from 155,000 MWh; expanding eligibility for participation to include smaller facilities, including multi-family housing units, and allowing for aggregation of multiple facilities owned by the same company; and adding solar to the resource options available.
• A new Consumers Renewable Energy Credit (REC) program with two subscription options offering RECs from in-state renewable generation and two options offering RECs generated from renewable sources anywhere in the United States.

The Commission rejected the company’s Bring Your Own Bright Field pilot program, which would allow full-service electric customers who use 1 MW or more to have a solar energy system installed at the customer’s facility that would be owned by Consumers. The Commission encouraged the company to work with MPSC Staff and stakeholders through the MI Power Grid workgroups to address concerns raised by intervenors and the Commission.

MPSC COMMENCES LICENSE REVOCATIONS ON 9 PHONE SERVICE PROVIDERS

The MPSC today issued notice to nine licensed providers of basic local exchange telephone service that it was commencing the process to revoke their licenses as a result of their lack of compliance with statutory and regulatory requirements. The Commission ordered Air Advantage, LLC; AirNorth Communications, Inc.; CMC Telecom, Inc.; Global Communications Network, Inc., f/k/a Castle Wire, Inc., f/k/a Business Communications Analysts, Inc.; Huron Mountain Communications Co.; IQ Telecom, Inc.; Lucre, Inc.; Michigan Access, Inc., and Rockford Telephone Company, Inc., to file an intervention in Case No. U-20892 no later than 5 p.m. Oct. 26, 2020, and appear before an administrative law judge on Nov. 17 for a hearing by videoconference or teleconference via Microsoft Teams.

INDIANA MICHIGAN POWER’S ENERGY WASTE REDUCTION PLAN RECONCILIATION APPROVED

The MPSC today approved a net over recovery of $2,052,542 in Indiana Michigan Power Co.’s (I&M) reconciliation of its 2018 energy waste reduction (EWR) plan (Case No. U-20367). Michigan’s energy laws require all natural gas and electric utility providers to implement customer programs that lower energy use to reduce the future cost of service. The Commission ordered I&M to file tariff sheets reflecting the surcharges to be refunded to the appropriate customer classes.

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

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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