5/25/2011
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.
10/30/2010
by Bruce Goodman
Alternative energy developers in Michigan have suggested to me that Michigan would go a long ways toward boosting its alternative energy manufacturing sector if it took lessons from Ontario. Specifically, they point to the domestic content requirements in Ontario’s Clean Energy Act that will ensure at least 25% of wind project costs and 50% of large solar project costs come from Ontario goods and labour (sic), which increases to 60% for solar on January 1, 2011 and to 50% for wind on January 1, 2012. Without a doubt, the Clean Energy Act, which clearly establishes as the energy policy for the province to expand clean and renewable sources of energy, has kick-started the alternative energy manufacturing sector. But the domestic content requirements of the law would be unconstitutional in Michigan. If we tried to require Michigan content in alternative energy projects as part of the MPSC’s PPA approval process, it would not survive legal scrutiny. Any “Michigan products only” clause would violate the “Dormant” Commerce Clause of the U.S. Constitution as a direct, and prohibited, restraint on interstate commerce. Critics are correct, however, in thinking that a strong, clear state energy policy would help bring alternative energy jobs to Michigan. Oh Canada!
5/20/2010
by Bruce Goodman
Michigan’s 2008 legislation requiring utilities to purchase energy from and/or to construct renewable energy projects was a drawn out battle with many compromises and a mixed outcome. The MPSC has now proposed implementing rules, and the alternative energy industry needs to pay attention. Rules can never be perfect “right out of the box.” [I am disappointed that neither Part 2 nor Part 3 addresses standby rates, which need to be restructured to better accommodate and encourage self generation.] Do the proposed rules provide the certainty needed for alternative energy projects to get financed and built? Those with experience need to weigh in and make the rules “more perfect.” Read the rules, identify the flaws, attend the hearing, propose alternative language, submit meaningful comments. Now. The devil IS in the details.
6/24/2009
by Bruce Goodman
In a series of orders, the Michigan Public Service Commission has approved the ground rules by which public utilities in the state will be implementing the RPS mandated by statute in 2008. Except for the competitive bid process for Detroit Edison, renewable energy plans, energy optimization plans, and surcharges were approved in late May. This utility has now submitted a more detailed description of the RFP and bid evaluation process for an expedited hearing. Under the various orders, the MPSC Staff will provide oversight and consultation to ensure competitive and fair RFP processes.
