Citizens Utility Board of Michigan

A settlement between Upper Peninsula Power Co. (UPPCO) – the largest energy provider in the UP – and Michigan Attorney General Dana Nessel and other groups could clear the way for an impressive increase in the amount of renewable energy in the peninsula, as well as in the state as a whole.

Source: Michigan Public Service Commission

Amid mass power outages this past summer in the DTE and Consumers Energy service territories, tens of thousands of Michigan residents learned the hard way that the state badly needs to update its basic standards for electric service. Also, after more recent power outages, DTE COO and President Trevor Lauer recognized in a Dec. 31 interview that “we need to do a better job keeping lights on for our customers.”

Gov. Whitmer’s task force has just over three months left to issue its initial report on propane – the fuel source that 25% of Upper Peninsula customers rely on as their primary source of heating to get through some of the most brutal winter conditions in the lower 48. Nationwide, somewhere around just 6% of households use propane to stay warm at home (based on the National Propane Gas Association’s recent estimate that 7.8 million households use propane for in-home heating).

SEMCO service territory highlighted in yellow above. Source: Michigan Public Service Commission.

The Citizens Utility Board (CUB) of Michigan has good news for the over 275,000 residential customers of SEMCO Energy Gas Co, the third-largest natural gas utility in Michigan. SEMCO has reached a settlement with the state Attorney General, the staff of the Michigan Public Service Commission (MPSC), the Retail Energy Supply Association and CUB that would resolve some of the biggest criticisms we made against SEMCO’s pending request with the MPSC to raise its rates. (You can read those criticisms in this previous blog post and an op-ed published in several newspapers.)

The MPSC approved the settlement on Dec. 6.

This summer the Lansing Board of Water and Light (LBWL) filed with state regulators its Energy Waste Reduction plan for 2020 and 2021. This plan lays out what the municipal utility will spend on its whole suite of programs to help customers cut their energy use. Specifically, LBWL projects a total annual budget for energy waste reduction of $4,596,728 in each of 2020 and 2021. That is over $700,000 more than the utility had proposed for its 2018 program.

SEMCO service territory highlighted in yellow above. Source: Michigan Public Service Commission.

SEMCO Energy Gas Co. is not nearly as big of a name as DTE or Consumers Energy, but all Michigan residential ratepayers should take note of the latest rate increase request from SEMCO – the third-largest natural gas utility in Michigan. This case demonstrates a few of the common issues with utility rate cases that can be bad news for residential ratepayers.

(Image from Plains Midstream Canada presentation to the U.P. Task Force on Sept. 20, 2019)

The Upper Peninsula (UP) Energy Task Force, formed in June by an order from Gov. Gretchen Whitmer, has spent its first few meetings studying the lay of the land of the Upper Peninsula. Now, the Task Force is in its very early stages of determining the potential paths forward for the UP’s energy problems.

Consumers Energy Co. plans to retire its Karn coal-fired power plant in Bay County by 2023.

Last year, a survey found that 71% of utility company leaders believe that a “utility death spiral” is a real possibility without regulatory or other changes. The idea of a “death spiral” has been around for several years and broadly lays out a scenario in which customer adoption of distributed energy technologies that allow customers to use electricity that doesn’t come from the utility (such as rooftop solar and battery storage) combines with higher efficiency to cause electric utilities to continually bleed customers and revenue. Calling it a “death spiral” may be a bit hyperbolic, but that survey indicates that at the least, many utilities recognize that they need to make dramatic changes to adapt to the new energy world, and that if they don’t, they face real problems.

For decades, many states have required their energy utilities to regularly submit long-term plans laying out what the utilities believe is the best way to provide reliable and cost-effective service to their customers. Known as “integrated resource plans” or IRPs, this planning process forces the utility to show what investments and strategies it will make – what type of power plants to build, what older plants to retire, what kind of energy efficiency to pursue – depending on a variety of scenarios, from commodity price fluctuations to different types of government regulation that may or may not be implemented.

Today, the Citizens Utility Board of Michigan filed the following comments on the Michigan Public Service Commission's Statewide Energy Assessment (SEA). 

For background, here is what the MPSC's website says about the SEA:

MPSC Statewide Energy Assessment (SEA)

Michigan experienced historically extreme cold weather from January 29, 2019 to February 1, 2019 due to a polar vortex. During this time, Consumers Energy asked natural gas customers to reduce usage and lower thermostats after a fire at its largest natural gas storage facility. In addition, both Consumers Energy and DTE Electric were called upon to ask their electric customers to curtail electricity usage to respond to regional constraints in electricity production across the Midwest. These events prompted the Governor to send a letter requesting the Michigan Public Service Commission to undertake a statewide review of the supply, engineering, and deliverability of natural gas, electricity, and propane systems, as well as contingency planning related to those systems.

On February 7, 2019, the MPSC issued an order in case number U-20464 to implement the Governor’s request. The initial report will be filed in the docket on July 1, 2019. Thereafter, and following examination of that initial report, the Commission will issue a final report by September 13, 2019. Interested parties will be given an opportunity to comment before the final report is issued.