Licensing and Regulatory Affairs
FOR IMMEDIATE RELEASE August 8, 2019
LANSING, Mich. – All electric providers in the state have demonstrated to the Michigan Public Service Commission that they have adequate electricity supplies to meet the needs of their customers for the 2022-23 planning year.
The annual review by the MPSC ensures long-term reliability by verifying electric providers’ energy supply arrangements. Each investor-owned utility, alternative electric supplier, cooperative, and municipally-owned utility is required to demonstrate to the MPSC under Public Act 341 of 2016 that they own or have contracted for sufficient capacity. The capacity must meet obligations set by the Commission or the two regional transmission organizations -- Midcontinent Independent System Operator Inc. and PJM Interconnection LLC -- in which Michigan participates. Companies in 2018 filed their four-year capacity demonstrations and the latest reports look at the fourth year ahead.
After reviewing all company filings, Commission Staff reported MISO Local Resource Zone 7, which encompasses most of the Lower Peninsula, will have enough local resources and exceed its local clearing requirement in 2022-23 by 1,300 megawatts (Case No. U-20154). Staff also concluded MISO LRZs 1 and 2, which cover the Upper Peninsula, will have sufficient capacity in the same timeframe, as will the southwest corner of the state, which is in PJM territory.
The Commission today accepted the Staff’s capacity demonstration report, which also noted increased levels of demand response resources for the 2022-23 planning year. Demand response programs enable customers to better control their energy use during times of peak demand, such as on hot summer days, or when market prices are high.
In a related ruling, the Commission rescinded its ban on aggregators being able to bid demand response into wholesale electric markets for retail choice customers (Case No. U-20348). However, it kept in place a ban on the direct participation in wholesale markets by retail customers (individually or through aggregators) of Commission-regulated electric utilities. Aggregators can sign up customers of AESs to participate in demand response programs, which can be used to meet required electric capacity requirements of AESs in lieu of more expensive power supply options. Customers of regulated utilities can participate in a variety of demand response programs available through their utility.
The decision followed a Staff-led stakeholder process and technical conferences, the results of which were included in a Demand Response Aggregation Staff Report and Recommendations. The Commission accepted all of the staff’s recommendations with several clarifications. Under Federal Energy Regulatory Commission rules, states have the authority to regulate retail electricity sales and to decide whether to authorize demand response aggregation.
(For a consumer tip sheet about demand response, click here.)
CONSUMERS ENERGY TO REFUND OVERCOLLECTION IN RATE CASE
Consumers Energy Co. will refund $33.6 million to ratepayers from its self-implementation of an electric rate increase in 2017 (Case No. U-20275). The MPSC ultimately approved $65.8 million of the company’s $130 million requested increase. Consumers had collected the higher rates from October 2017 to March 2018, when the Commission made its ruling. The company is required to refund the excess amount collected. Residential customers using 500 kilowatt hours a month can expect a one-time refund of approximately $3.20. Under previous law, utility companies were allowed to begin charging new rates as they awaited a final decision from the Commission. The 2016 energy laws abolished self-implementation.
ZFS ITHACA FACES QUESTIONS ABOUT GRATIOT COUNTY PIPELINE PROJECT
A company building a natural gas pipeline in Gratiot County must explain changes it made to plans approved by the Commission in February (Case No. U-20198). ZFS Ithaca LLC is constructing the approximately 17.6-mile West Yankee Pipeline through four townships, but MPSC Staff said about eight miles of the line deviated significantly from the route detailed in a settlement agreement approved by the Commission. The MPSC approval allowed for “minor deviations” from the proposed pipeline’s route. ZFS has until 5 p.m. Aug. 22 to explain why the Commission shouldn’t revoke its approval of the pipeline, why ZFS shouldn’t be found in violation of its agreement with the Commission, and why a penalty shouldn’t be assessed.
NATURAL GAS GROUP TRANSPORTATION PILOT PROGRAM DEVELOPED
Consumers Energy Co. was approved to develop and launch a five-year test program to consolidate the transportation and delivery of natural gas for suppliers (Case No. U-20439). The pilot was recommended as part of a settlement agreement in Consumers’ Aug. 28, 2018, gas rate case. The voluntary program will not increase the cost of service to customers.
ABATE’S CHALLENGE TO I&M TAX REFUND CALCULATION REJECTED
The Commission turned down two requests by the Association of Businesses Advocating Tariff Equity to have the MPSC order Indiana Michigan Power Co. to adjust the way it allocated customer refunds based on changes under the federal Tax Cuts and Jobs Act (Case No. U-20585). ABATE argued that eight companies that switched service plans after the Commission’s approval of refunds should get $314,000 more than they’ve received. The MPSC said I&M has properly calculated refunds for all customers.
ACTION DISMISSED AGAINST NEGAUNEE CABLE CO.
A show cause action against Negaunee Cable Co. was dismissed since the company is no longer in business (Case No. U-20505). The Commission had ordered the company to explain why it had failed to file with the MPSC required documents under the Uniform Video Services Local Franchise Act. Negaunee Cable ceased operating in October 2018.
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.
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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