Consumers Energy Admits More Renewables Risk Higher Rates, Pushing Ahead Anyway
Michigan will increasingly rely on electricity produced elsewhere
Michigan households currently pay some of the highest electricity rates in the Midwest, and Consumers Energy has plans that will almost certainly increase them. That was one finding brought out by individuals testifying at Michigan Public Service Commission hearings related to the company’s plans to move increasingly to intermittent power sources, including solar and wind.
Consumers Energy admits that its 20-year plan to replace fossil fuels with renewable energy will result in Michigan customers paying more due to the intermittent nature of solar and wind. This could cause utilities here to buy more and more electricity that was generated elsewhere.
Consumers Energy filed its proposal for meeting various long-term targets in June. It calls for decreasing its use of fossil fuels and relying more on renewable energy sources and increased conservation, augmented by imported power from providers outside the state.
The document, called an integrated resource plan, contains exhibits from many sources. One of those includes the testimony of Anna K. Muni, a Consumers Energy employee who said at a state hearing that if wind and solar produce more energy than expected, it would reduce costs for customers.
“If, however, solar and wind resources are not able to dispatch at their projected capacity, due to either persistent unfavorable weather conditions, unexpected outages, or maintenance, a portfolio that contains a high percentage of these resources is at a high risk for unfavorable costs,” Muni said.
Customers would have to pay more then. That’s because Consumers Energy would have closed the plants — called “baseload power” plants — that burn gas or coal. It would then have to buy electricity from other companies, which might still use fossil fuels.
A document called the Siemens Report contains information that backs up the testimony Consumers Energy provided to state regulators. The company reports that it expects to increase electricity purchases from the Midcontinent Independent System Operator, one of the regional bureaus that operate the U.S. power grid and helps utilities seeking to buy and sell electricity from each other.
Consumers Energy currently buys 18% of its energy from MISO. Company projections say this will increase to 63% by 2040.
Michigan is one of the worst states in the nation for solar energy production. Photovoltaic panels only capture 16% of solar energy falling on them over a 12-month period. In December, that number drops to 6.8% in Michigan, and some other power source must make up the shortfall.
Katie Carey, director of external relations for CMS Energy and Consumers Energy, offered the following in response to a request for comment. “The Clean Energy Plan update proposed in June — which requires regulatory approval — positions us as a national leader in the clean energy transformation. The 20-year blueprint will allow us to be cleaner faster, more reliable and lower cost, providing the electricity Michigan homes and businesses need while protecting the environment we all cherish. Our plan will reduce exposure to volatile energy markets and save customers around $600 million through 2040 compared to our current plan.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.