Deregulation Effort Heats Up (again)

by Bruce Goodman, Energy Lawyer

Two different groups are now actively advocating for electric-rate reform in Michigan. The Customer Choice Coalition and Energy Choice Now are working to change the 2008 state law that guarantees that 90 percent of the customers doing business with Consumers Energy and DTE Energy are prohibited from buying electricity from anyone else. Former state senator Wayne Kuipers is serving as the executive director of Energy Choice Now, which was formed last year by a group of businesses and school districts. Michigan deregulated the electric industry in 2000, allowing residents and businesses to choose electricity suppliers. But in 2008, at the insistence of the utilities, this option was capped at 10 percent of total customer load.

VA Facility Signs Contract for Biomass Gasification

by Bruce Goodman, Energy Lawyer    

The U.S. Department of Veterans Affairs Medical Center in Battle Creek has signed a contract with Nexterra Systems Corp. of Vancouver, British Columbia, to design and construct a biomass gasification system to provide heat and power. The 28 MMBtu/hour project will supply 14,000 pounds of steam per hour and 2 MW of electricity, with greenhouse gas emissions being reduced by 80 percent. The electrical production will furnish about 85 percent of the medical center’s demand. The combined heat and power unit will use locally-sourced residual biomass.

GVSU Launches Offshore Wind Data Buoy

by Bruce Goodman, Energy Lawyer   

Yesterday, on a glorious fall day, Grand Valley State University held an outdoor dedication ceremony and launched its offshore wind data buoy in Muskegon.  With the sun energizing its solar panels and the wind spinning it wind tubine the banana yellow craft was honored in speech after speeach.  The promise of the research to be done by the Catch the Wind LIDAR unit and other scientific instruments were cited.  Many in the crowd recognized that this in fact is going to validate the potential of offshore wind as a major energy source for the Great Lakes region.  Hats off to Arn Boezaart of the MAREC center and the group from West Michigan Energy that helped make this dream a reality.  It is apt to be a watershed step in wind data lore.

DTE RFP Leads to NextEra

by Bruce Goodman, Energy Lawyer   

In 2010, Detroit Edison issued a request for proposal seeking up to 245 MW of renewable resources for a commercial operation date no later than December 31, 2014. The company received 146 proposals (from 46 prospective suppliers) that included wind, hydro, solar, landfill gas and biomass resources.  Negotiations with three would-be suppliers ultimately led to a 120 MW power purchase agreement (PPA) with NextEra Renewable Resources LLC for its Tuscola Bay Wind LLC project in Tuscola and Bay Counties with deliveries to begin by December 31, 2012. Pricing is reported to be “up to $60.90 per megawatt-hour net energy delivered,” including RECs. The Michigan Public Service Commission staff found that the RFP process and the scoring procedures satisfied the Michigan Renewable Portfolio Standard guidelines, and the Michigan Public Service Commission (MPSC) has now approved the PPA.

GVSU Wind Data Buoy to Launch

 by Bruce Goodman, Energy Lawyer  

Grand Valley State University is preparing to receive, validate, and then launch its off shore wind data buoy in Lake Michigan. Constructed by AXYS Technologies of British Columbia, the 17 by 17 foot data platform will test for wind patterns, wind quality, bat and bird activities, and water parameters.  With power supplied by a small wind turbine, a solar panel, and a fossil fueled generator, the research platform will collect data for GVSU, Michigan State University, and University of Michigan researchers.  U of M has recently received U.S. Department of Energy awards of more than $1 million to simulate the impact of surface water ice on off shore wind turbines and to evaluate the effects of freshwater ice on off shore turbines in the Great Lakes. The dedication of the wind data buoy will take place at the National Oceanographic and Atmospheric Administration’s field station on the Muskegon Channel at 11 AM on October 7.

NASA Comes to Michigan for Advanced Lighting System

by Bruce Goodman, Energy Lawyer

The Johnson Space Center in Houston had a parking lot that needed illumination but was without an electricity supply.  They solved their problem by selecting the EverLast PV/Wind Hybrid Area Lighting System from Jackson-based Full Spectrum Solutions Inc.  The system incorporates a wind turbine generator with photovoltaic solar panels, battery power storage, and integrated smart sensor controls to power an induction light fixture.  The combination can deliver powerful, commercial grade lighting to remote areas that are off the grid.  The U.S. Air Force has selected the induction streetlight fixtures to reduce energy costs at Eglin Air Force Base in Florida.

Order Amends Renewable Energy Plan for Consumers Energy

by Bruce Goodman, Energy Lawyer

In its Case No. U-16543 Order dated May 10, the Michigan Public Service Commission (MPSC) responded to the request of Consumers Energy Company to amend its Act 295 Renewable Energy Plan (REP).  The MPSC’s rejected the company’s “lowest cost resource” strategy in favor of a “diversity of energy generation sources” plan.  Highlights from the testimony and Order:

• The company’s 100.8 MW Lake Winds™ Energy Park will be in service in the fourth quarter of 2012, will cost $2,300 per kW and will have a 20-year levelized cost of $95 MWh; 
• The company’s 150 MW Cross Winds™ Energy Park will be in service in 2014;
• In response to the MPSC staff’s position that the company should implement a 25 MW methane digester power purchase program at $83/MWh with 20-year contracts, the Order directs the company to conduct research and consider including a methane digester program in a future amended REP; 
• The Company was ordered to extend its Experimental Advanced Renewable Program (EARP) (pilot solar photovoltaic program) by adding: 
• Add at least 2 MW to the EARP program, divided between small (20 kW or less) and large systems (up to 150 kW); 
• Set the EARP firm offer price at a minimum of $0.20 and a maximum of $0.26 per kWh under contract terms between 12 and 20 years;

 No comment was made on the company’s reduction from the estimated 900 MW of renewable capacity in the original REP to a proposed 650 MW, a reduction justified on the basis of actual experience with higher capacity factors for wind energy resources than originally assumed.

GVSU Selects Vendor to Support Offshore Wind Assessment

by Bruce Goodman, Energy Lawyer

Grand Valley State University (GVSU) has selected AXYS Technologies from Vancouver, Canada to provide the equipment for its three-year offshore wind data collection project in Lake Michigan. The floating-buoy research platform will be equipped with Catch the Wind LIDAR technology to measure wind characteristics, with deployment anticipated in September 2011. The wind data and related research project will be managed by the Michigan Alternative and Renewable Energy Center (MEREC) of GVSU in Muskegon, in collaboration with the Phoenix Energy Institute of the University of Michigan. The project will evaluate the impact of wind, wave and ice climatology on the research platform at multiple locations, as well as characteristics of aquatic habitat and water quality. Michigan State University will support the project with bird and bat studies and related avian research. The City of Muskegon has agreed to be a co-applicant on environmental permit applications. Funding is supplied by the U.S. Department of Energy, the MPSC, We Energies, and the Sierra Club.

Detroit Edison Makes Changes to Ownership and PPA

by Bruce Goodman, Energy Lawyer

 In its April 22 filing with the Michigan Public Service Commission (MPSC), The Detroit Edison Company revealed the size of the Gratiot County Wind LLC project has increased from 200 MW to 212.6 MW, and Detroit Edison has:

•           Increased its purchase of capacity and energy from the project from 100.4 MW to 110.4 MW; and

•           Increased its ownership interest at the site from 89.6 MW to 102.4 MW.

The pricing of the amended power purchase agreement (PPA) is not available for public inspection. The approval of these changes is being sought without a hearing under the ex parte approval request by the company.

Renewable Energy Annual Report has Surprises

by Bruce Goodman, Energy Lawyer

The first annual report to the Michigan legislature from the Michigan Public Service Commission (MPSC) on the impact of the 2008 Michigan Clean, Renewable, and Efficient Energy Act was filed on February 15. It found that progress toward the 10 percent renewable energy requirement is “going smoothly.” It listed all the power purchase agreements approved to date, and computed a weighted average price of $98.68/MWh, which is substantially less than originally forecasted in utility renewable energy plans. This market price is also well below the MPSC’s calculated levelized cost of $133/MWh for a new conventional coal-fired power facility. As predicted by the report, Consumers Energy has now filed an updated renewable energy plan in which it proposes lowering its renewable energy surcharge by $55 million, or approximately 72 percent, from $2.50 to $.70 per month.