LANSING – Consumers Energy has asked the Public Service Commission for an addition $160 million a year in part to cover the costs of shuttering coal plants and purchasing natural gas plants, the utility said in a filing on the rate case.
The utility said the rate increase is needed to comply both with federal air quality regulations and with Governor Rick Snyder’s energy policy vision.
Consumers plans to close seven of its current coal-fired plants by spring 2016, and replace them with one natural-gas fired plant in Jackson. The request also includes quicker adoption of smart meters across its territory.
“A year ago, Governor Rick Snyder laid out his vision for Michigan’s energy future, one in which our state is powered by cleaner energy sources, dependably, without waste and at a price that’s fair to all,” Patricia Poppe, vice president of customer experience, rates and regulation for the utility, said in testimony filed to support the request. “We at Consumers Energy listened to the governor and have been taking steps that support his vision. We are filing this request with the commission to ensure the 6.5 million Michigan residents we serve have the energy they need, whenever they need it.”
Consumers is planning $2 billion total in investments. In addition to the new gas plant, five remaining coal plants are planned for upgrades, she said.
Poppe said the requested increase would still hold Consumers’ rates below the national average, and she said the proposal would mean further rate decreases for the largest power users. Current law requires the utility to cut certain business rates by as much as 15 percent.
And she said the utility, through energy efficiency programs, had offset the proposed increase with $575 million in energy use reductions.
Consumers estimates the annual cost of the planned investment is $211 million and other costs, such as uncollectible accounts and employee compensation, will run $84 million. Those increases are offset by $132 million by loss of the operating costs of the seven closed plants accelerated amortization of income tax benefits being paid to customers and some reductions in employee benefit costs.
“In this filing we support a Michigan-first energy policy that promotes adaptability, reliability, affordability, and protecting the environment. This filing will help to fulfill our promise to the people of Michigan and continue building for our State’s energy future,” Poppe said.
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