February 23, 2023
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The Michigan Public Service Commission authorized a mid-year step to lower Consumers Energy Co.’s power supply cost recovery (PSCR) factor for the 2023 plan year, approving a temporary order that will lower electric bills for customers amid a period of higher costs for natural gas the utility uses to generate power.
Consumers had projected a 2022 PSCR underrecovery of $449,076,328 to be reflected in its PSCR factor for the 2023 planning year. Today’s order in Case No. U-21257 approves a request by Consumers to include only $149,692,109 of the underrecovery in the 2023 planning year, with the remaining $299,384,219 recovered in equal amounts during the company’s 2024 and 2025 PSCR plan years. That spreads out impact on customer bills as Consumers recovers costs it incurred as prices for natural gas rose amid global energy turmoil caused by Russia’s invasion of Ukraine and higher inflation.
PSCR factors reflect utilities’ projected costs for fuel used to generate electricity or buying electricity from the markets to serve customers. Utilities file plans each year with projected costs, and the actual incurred costs are reconciled at the end of the PSCR year, with any difference rolled into the PSCR plan for the next year. There is no mark-up or profit for fuel or electricity purchased by a utility.
Today’s order notes that Consumers “observed a significant power supply cost underrecovery in 2022” because of rising costs, particularly higher prices for natural gas. The Commission found that spreading the increased costs over three years will soften the impact on customers. While it is “in the public interest to match market prices to the PSCR factors as closely as possible during the PSCR plan period such that market fluctuations are generally reflected in the price charged to PSCR customers,” that scenario isn’t always possible in periods of market volatility with unexpectedly high prices.
Intervenors in the case all filed statements of non-objection to Consumers’ request. In addition to the Michigan Department of Attorney General, intervenors were the Association of Businesses Advocating Tariff Equity; Citizens Utility Board; Michigan Power Limited Partnership and Ada Cogeneration Limited Partnership, and the Residential Customer Group. MPSC Staff also participated.
COMMISSION SEEKS ADDITIONAL REPORTS FROM UTILITIES, TRANSMISSION ORGANIZATIONS ON EFFORTS TO MAXIMIZE FEDERAL ENERGY FUNDING
The MPSC today expanded its ongoing effort to help maximize Michigan’s funding opportunities for electric and natural gas utility infrastructure improvements under the federal Infrastructure Investment and Jobs Act (IIJA) of 2021 to include potential funding, tax credits and incentives for clean energy expansion under the Biden Administration’s Inflation Reduction Act (IRA) of 2022 (Case No. U-21227). Today’s order summarizes biannual reports the Commission directed the state’s rate-regulated utilities to file by Dec. 31, 2022, and requests that utilities’ next filing due June 30, 2023, include information on which federal funding programs the utilities have applied for and the status of each application. The Commission also requests that Michigan’s electric transmission organizations — American Transmission Co.; American Electric Power Co.; Wolverine Power Supply Cooperative; Excel Energy; and the two subsidiaries of ITC Holdings Corp., Michigan Electric Transmission Co. and ITC Transmission — file biannual reports on a voluntary basis. In addition, the Commission encouraged utilities to explore funding opportunities under the IRA and provide an update of efforts to obtain funding assistance on a biannual basis along with biannual IIJA reports. Biannual updates shall be filed on Dec. 31 and June 30 each year until further ordered by the Commission or until all applicable funding opportunities under the IIJA and IRA are closed to applications. Rate-regulated utilities may file requests for approval of pilot programs, accounting treatment, or other similar requests related to funding and assistance opportunities pursuant to the federal acts, and the Commission will do its best to make a determination within 90 days of each filing.
MPSC OKs EXPEDITED REVIEW PROCESS FOR UTILITY PILOT PROGRAMS
The Commission approved an expedited, 90-day process for review of utility pilot programs (Case No. U-20898), acting on recommendations from the MPSC’s MI Power Grid New Technologies and Business Models workgroup. Today’s order reviews comments from Indiana Michigan Power Co.; Consumers Energy Co.; DTE Electric Co.; Michigan Energy Innovation Business Council/Advanced Energy United; Environmental Law & Policy Center, Ecology Center, Vote Solar, and Union of Concerned Scientists. The Commission found that the voluntary expedited review process can provide for an accelerated review for utility-proposed pilots but also encourage more support from stakeholders, which could reduce implementation delays caused by contention and complexity when pilots are proposed in rate cases.
MPSC APPROVES TARIFF REVISIONS FOR CONSUMERS ENERGY’S LARGE CUSTOMER RENEWABLE ENERGY PROGRAM
The MPSC today approved Consumers Energy Co.’s application for revisions to the utility’s large customer renewable energy program (LCREP) tariff (Case No. U-21347). Consumers’ changes include using forecasted energy and capacity prices in determining subscription credits; adding clarifying language regarding the pooled resource methodology for subscription charges and credits and the discontinuation of cost-averaging in lower cost projects into existing LCREP customers’ subscriptions; and expanding customer prepayment eligibility to all LCREP customers.
COMMISSION PARTIALLY APPROVES COST RECOVERY MODIFICATIONS FOR BIOMASS MERCHANT PLANTS THAT SUPPLY CONSUMERS ENERGY
The Commission today approved in part an application from several biomass merchant plants for modifications to cost recovery procedures (Case No. U-16048), but left unanswered several disputed matters in the case, which will be resolved through the contested case process. The biomass merchant plants — Cadillac Renewable Energy LLC; Genesee Power Station LP; Grayling Generating Station LP; T.E.S. Filer City Station LP; National Energy of Lincoln LLC and National Energy of McBain LLC — use wood wastes to generate electricity sold by contract to Consumers Energy Co.
UPPER PENINSULA POWER CO.’S ENERGY WASTE REDUCTION PLAN APPROVED
Upper Peninsula Power Co.’s energy waste reduction (EWR) plan for the 24 months ending Dec. 31, 2023, was approved today (Case No. U-20879). The Commission in December reopened the case, having found the record contained insufficient evidence on issues surrounding the Real Time Market Pricing class, of which the sole member, Verso Corp., now Billerud Americas Corp., raised concerns about costs and benefits. Today’s order found some of Verso’s earlier concerns to be moot, that Verso has benefitted substantially in previous UPPCO EWR plans, and that UPPCO’s revised EWR surcharges on the reopened record are reasonable.
COMMISSION PARTLY APPROVES, PARTLY DENIES PETITION FOR REHEARING ON LIFTING OF BAN ON DEMAND RESPONSE MARKET PARTICIPATION
The MPSC granted in part and denied in part Consumers Energy Co.’s petition for rehearing of the Commission’s Dec. 21, 2022, order in Case No. U-21099 that partly lifted the decade-long ban on demand response (DR) aggregation resources participating in regional wholesale power markets. Today’s order partially grants Consumers’ petition regarding matters of aggregation of DR programs. The order also clarifies the Dec. 21 order to address matters raised by Voltus Inc. and, jointly, Michigan Energy Innovation Business Council, Advanced Energy United, and the Advanced Energy Management Alliance.
MPSC APPROVES DATA PRIVACY TARIFF WAIVER FOR DTE ELECTRIC, DTE GAS TO ASSIST DETROIT’S EFFORTS TO IDENTIFY UNREPORTED OCCUPANCY
The MPSC today approved a request by DTE Electric Co. and DTE Gas Co. for an extension of a waiver of part of its data privacy tariffs on personally identifiable information used to assist the City of Detroit in developing an occupancy model predicting the occupancy status of buildings, allowing for a more equitable distribution of services and improved access to resources (Case No. U-21215). The data will allow the City of Detroit to determine possible U.S. Census undercounts that, if corrected, could help deliver federally funded services and benefits such as Medicaid, Medicare Part B, Supplemental Nutrition Assistance Program, and other educational, nutritional and housing programs to vulnerable and under-resourced residents. Approval of the waiver in today’s order is contingent on the City of Detroit maintaining confidentiality of the data.
COMMISSION APPROVES RENEWABLE NATURAL GAS PIPELINE
The MPSC approved De Saegher Energy LLC’s application for a certificate of public convenience and necessity to construct, own and operate a renewable natural gas pipeline in mid-Michigan’s Gratiot County (Case No. U-21289). The DSG RNG pipeline in New Haven Township — two four-inch steel pipelines about 12,600 feet long — will connect a biodigester at De Saegher Dairy Farm to an interconnection with DTE Energy’s ABC 24-inch pipelines.
To look up cases from today’s meeting, access the MPSC’s E-Dockets filing system.
Watch recordings of the MPSC’s meetings on the MPSC’s YouTube channel.
For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the Commission on Facebook, Twitter or LinkedIn.
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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