An IRP is a comprehensive long-range plan illustrating how a utility will provide reliable, affordable and clean electric service to its customers.
UPPCO Case U-20350
On Jan. 21, 2020, a settlement was reached between UPPCO and groups that had criticized elements of its initial IRP (see below for details) such as Michigan Attorney General Dana Nessel, Citizens Against Rate Excess and others. The settlement resolves the disagreements, all parties agreeing that the following preferred course of action is the most reasonable and prudent means of meeting the utility’s capacity and energy needs over the next 5, 10 and 15 years.
The settlement was approved by the Michigan Public Service Commission on February 6, 2020.
The major elements of this preferred course of action include:
-UPPCO must reduce energy waste across its system by an amount equal to 1.65% of its sales of electricity the previous year for 2020 and 1.75% for 2021. UPPCO had previously proposed staying at 1.5%.
-The parties agree to a financial mechanism that will give UPPCO additional compensation for entering into an agreement to purchase solar energy over a long-term period. UPPCO also agrees to a new competitive bidding process when procuring renewable energy.
-UPPCO will for now drop its proposal from the original IRP to build an 18 to 20 MW, natural gas-fired, reciprocating internal combustion engine (RICE) plant in the UP. But later this year the utility will submit an analysis to provide regulators with more information about the need for such a plant and the rate impact if it was built.
Association of Businesses Advocating Tariff Equity (ABATE), a group that represents the interests of large industrial and commercial energy users in Michigan, did not join the settlement but filed a statement before the Michigan Public Service Commission (MPSC) stating that ABATE does not object to the settlement.
UPPCO originally submitted its plan to the MPSC in February of 2019. Highlights of the plan included:
- UPPCO’s proposal states that 56% of its energy will be sourced from renewable solar and hydroelectric resources by the year 2022.
- The plan calls for the construction of 125 megawatts of new utility scale solar, 20 megawatts of new natural gas fired generation and continued reliance on the company’s existing hydrogeneration assets.
- The company also plans to retire its existing oil-fired plants.
History of the IRP
On Dec. 6, 2019, the Michigan Public Service Commission (MPSC) approved many elements of the IRP, including UPPCO’s proposal to enter into a procured, long-term purchase agreement for 125 megawatts of solar power. To give context to that number, in 2019, the entire state of Michigan had somewhere around 167 MW of solar power capacity. They also approved increasing the utility’s energy waste reduction goals from the equivalent of 1.5% of total electricity sales to 1.65% in 2020 and 1.75% in 2021.
The MPSC, however, rejected UPPCO’s proposal to build an 18 to 20 MW, natural gas-fired, reciprocating internal combustion engine (RICE) plant in the UP, finding that the utility failed to justify the benefits of the plant over the costs to ratepayers.
On Jan. 21, 2020, UPPCO reached a settlement that resolved many of the issues in the IRP, as described above.
Who is Involved in the Legal Proceedings?
After an electric utility files their IRP, there is an opportunity for interested parties, including individual customers of the company, to weigh in on the plan. The MPSC takes this all into consideration as it makes its decision to approve the plan, recommend changes, or deny the plan.
In the UPPCO IRP case, there were five different interveners that were involved and representing their interests:
- Attorney General Dana Nessel, the State of Michigan’s consumer advocate.
- Citizens Against Rate Excess (CARE), a nonprofit organization that represents residential ratepayers of investor-owned electric utilities in the U.P.
- Association of Businesses Advocating Tariff Equity (ABATE), a group that represents the interests of large industrial and commercial energy users in Michigan.
- Verso Corporation, a Delaware corporation who operates an Escanaba paper mill that gets their power from UPPCO.
- Circle Power LLC, a renewable energy development company based in Michigan.