LANSING – While Michigan must
continue working to ensure adequate electric resources beyond 2016, the Public
Service Commission officially declared Thursday that the projected shortfall in
2016 is likely not as big as previously implied by a regional survey.
“Michigan’s focus on making
sure there is an adequate reserve of capacity revealed that efforts have been
taken to shore up supplies,” PSC Chair John Quackenbush said in a
statement. “However, as more plants are closed and new resources are not
available to replace them, Michigan may have to rely more heavily on
out-of-state resources, if available, and Michigan customers may be confronted
with higher rates or potential outages due to a lack of adequate supply.”
The finding by the PSC (Case U-17751) came after it directed all regulated electric utilities,
alternative electric suppliers and certain power supply cooperatives and
associations to file assessments of their abilities to meet customers’ expected
requirements for 2015 through 2019.
The filings from those companies
indicated they have commitments in place through contracts or ownership of
capacity to meet all or nearly all of their customers’ needs plus reserve
margin requirements in Zone 7 of the Lower Peninsula for the 2016 planning
year, the PSC said. Some of the alternative electric suppliers indicated that
they intend to acquire the necessary capacity in the future through the
Midcontinent Independent System Operator’s annual capacity auction or other
means.
The finding also marks the second
energy authority in about one month to determine that Michigan will be okay for
electric capacity in 2016. MISO – the entity that oversees electric usage in
Michigan and other Midwestern states – determined the same in mid-June and,
like the PSC on Thursday, expressed uncertainty about when exactly there could
be a shortfall (See Gongwer
Michigan Report, June 19, 2015).
In fact, MISO projected a surplus of
1.7 gigawatts regionally. But there is some question about that since, as Quackenbush
alluded to, the reason Michigan is not expected to have a shortfall next year
is because there are adequate supplies it can piggyback off of regionally,
leaving questions about at what cost Michigan is safe.
While some may say that the
conclusion from both authorities may take the wind out of the sails of
regulated utility companies, which have blamed electric competition for the
initial warnings of a shortage, Sen.
Mike Nofs (R-Battle Creek), chair of the Senate Energy and Technology
Committee, said he disagreed. He said it may postpone those concerns for a year
or two, but generally the finding “confirmed my suspicions,” he said.
“I think … they were believing
the (federal) Clean Power Plan was going to be implemented a lot quicker and
then they decided to take time their time after they put the proposed rules out
and got so much negative feedback,” he said of the changes from the PSC
and MISO.
“We knew that no plants are
shutting down yet, so the adequacy for the next year is going to be fine, but
as we start closing down the plants around region, capacity is going to be
iffy,” Mr. Nofs said. “That’s why we need an integrated resource plan
… so we can react as much as possible when we need to.”
Quackenbush said it is encouraging
there appears to be adequate capacity in the region as a whole and that
efficiencies could be gained through other actions in 2016. But the PSC
acknowledged the significance of a projected shortfall in the Lower Peninsula.
“Michigan needs to remain
focused on its efforts to ensure there are adequate resources to cover its
anticipated load and that electric resources are reliable, affordable and
environmentally protective,” he said.
DTE REFUND, CONSUMERS INCREASE: In other business before the PSC on Thursday, it approved a
refund during the September billing month after approving a request by the
utility to set in place a securitization bond principal and interest credit and
a securitization bond tax credit.
Securitization is the process by
which a utility, following issuance of a financing order by the PSC, replaces
relatively high-cost debt and equity with lower-cost debt in the form of
securitization bonds.
Residential customers using
500-kilowatt hours of electricity a month will see a decrease of $4.10
accordingly (case U-12478).
Similarly, in a case involving
securitization charges for Consumers Energy, the PSC authorized the company to
implement its revised electric securitization charges effective with the August
billing month, continuing an action that will reduce customers’ bills over time
(Case U-17473).
As a result, residential customers
using 500 kilowatt-hours of electricity a month will see an increase of 4 cents
on their monthly bills.
NORTHERN STATES POWER COMPANY: The PSC approved a settlement reconciling Northern States
Power Company’s 2014 electric and natural gas energy optimization costs and
revenues, and revised a surcharge, resulting in an increase of 65 cents a month
for residential customers using 500 kilowatt-hours of electricity a month,
effective August 1.
Natural gas customers using 100 ccf
of gas a month will see a decrease of 25 cents on their monthly bills (Case U-17834).
ALPENA POWER COMPANY: The PSC also approved a similar settlement for Alpena Power
Company’s 2014 optimization plan revenues and costs that will result in a
decrease of 6 cents per month on the monthly bills of residential customers
using 500 kilowatt-hours of electricity. The change is effective January 1,
2016 (Case U-17830).
This story was published by Gongwer
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