LANSING – In an order issued Tuesday, the Michigan Public Service Commission has required Consumers Energy to use money from its 2007 sale of the Palisades Nuclear Power Plant to off-set residential rate hikes. The rate increases take effect Thursday.

The PSC said without using $36 million from the decommissioning fund from Palisades, residential consumers could have seen rate increases up to 16 percent. Instead, residential consumers will see a 3.5 percent, or $2.99 average, hike, until November 14.

The residential rate hikes are part of the recalibration of utility rates so that all energy users pay for what they are using. Under prior law, which was changed last fall, businesses and other large energy users subsidized the cost of energy provided to residential consumers.

The PSC order also requires Consumers to use its rate design filed in November, not the one it submitted in April.

Jeff Holyfield, Consumers Energy spokesperson, said the company will comply with the PSC order.

He said Consumers had proposed implementing a per-kilowatt surcharge for all customer classes but the order instead means the utility will use a former rate design that held large energy user rates flat and raised rates for small business users.

Holyfield said the utility also already has been using the Palisades’ sale to refund consumers to the tune of $250 million. He said there is still $110 million remaining in the decommissioning fund.

RENEWABLE/EFFICIENCY SURCHARGE: The commission Tuesday also approved plans for nine electric cooperatives and four smaller utilities to begin implementing their renewable energy and energy optimization plans, and the related surcharges.

Surcharges for the co-ops will range from 65 cents to $1.21 per month for electric optimization. The co-ops did not propose renewable energy surcharges.

Alpena Power will charge $3 for renewables and 65 cents for optimization; Edison Sault will charge 58 cents for optimization; AEP will charge 41 cents for optimization; and Northern States Power will charge 65 cents to electric customers and $1.45 to natural gas customers for optimization.

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