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A judge last month recommended that state regulators reject Consumers Energy’s integrated resource plan.
Michigan environmental groups say Consumers Energy’s long-term clean energy transition is at a “crossroads” following a judge’s recent recommendation that the plan be rejected.
The utility’s integrated resource plan calls for adding more than 6,000 megawatts of solar, ramping up energy storage and efficiency, and eliminating coal power, all while not adding additional natural gas plants.
Clean energy advocates see shortcomings with the plan, but they hope the Michigan Public Service Commission recommends modifications rather than a wholesale rejection.
Administrative Law Judge Sharon Feldman made a series of suggestions last month but ultimately recommended that regulators reject the plan.
With the Public Service Commission expected to rule in April, the Natural Resources Defense Council says Consumers’ plan is at a “crossroads.”
“It really is a transformative plan,” said Ariana Gonzalez, senior energy policy analyst with NRDC’s climate and clean energy program. “By the fact that the judge rejected it, it puts it in a little more precarious position. We’re saying there is still a lot of good in there and we should all find a path forward versus saying all or nothing.”
The key sticking points appear to be over a “financial compensation mechanism” Consumers would be paid for contracting for power, the competitive bidding process for building new generation, and rates independent producers are paid under the Public Utility Regulatory Policies Act.
Public Service Commission staff acknowledged Feldman’s concerns with the “out years” of the plan, but said those could be addressed in future integrated resource plan filings. Those concerns “do not merit rejecting a plan that promises to transform how the Company purchases energy and capacity,” commission staff wrote on March 4.
However, Feldman’s Feb. 20 ruling is based on Consumers’ prior position that the plan should be taken as a whole. Modifications to certain aspects, such as what it should pay for power from independent producers, would alter the entirety of the plan, utility officials have said.
“We feel the judge took them at their word,” Gonzalez said. “We’re saying it shouldn’t be all or nothing.”
In a March 4 response to Feldman’s recommendation, Consumers wrote that since the plan is a “fully integrated proposal with numerous components, modification to or rejection of a proposal made in the [plan] impacts the [plan’s] viability and the Company’s willingness to execute on the remaining portions of the [plan] not modified or rejected. Thus, the Company reserves the right to abandon or amend its [plan] if the Commission rejects any of the Company’s proposal in this [integrated resource plan].”
Consumers Energy spokesperson Katie Carey said the utility stands by the plan filed in June 2018, but added it’s willing to work on an agreement with various parties.
“The Clean Energy Plan is one of the boldest plans in the nation to invest in over 6,000 MW of new solar in Michigan over the next two decades to replace retiring coal and nuclear generation,” Carey said. “Consumers Energy looks forward to working with all interested stakeholders to reach a solution that is best for Michigan.”
Consumers’ plan is the first filed under new rules adopted by the Legislature in 2016 requiring utilities to file integrated resource plans every three to five years. It’s serving as a test case for future proceedings. DTE Energy is expected to file its integrated resource plan by the end of the month.
The Public Service Commission’s ruling in April could set off a variety of pathways based on whether it’s approved, rejected, or approved with recommendations. The company’s willingness to make adjustments could span months.
Gonzalez still finds value in being able to work closely with the utility throughout the process.
“It’s a unique and important opportunity for the utility to put out a vision of what kind of utility they want to be,” Gonzalez said. “It provides an important avenue to evaluate, critique and provide guidance. It’s a nitty gritty process, but it’s important.”