Law and Sustainability

Environmental organizations nix ‘zero coal’ plan

Judge says Consumers Energy’s proposal to remove coal plants by 2023 is not feasible.

March 8, 2019
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(As seen on WZZM TV 13) Consumers Energy’s “zero coal” plan has come under scrutiny as a handful of environmental organizations have recommended the Michigan Public Service Commission revise it as it stands.

The MPSC recently received a recommendation to reject Consumers Energy’s proposed long-term energy plan, which includes substantial investments in clean energy resources. Administrative Law Judge Sharon Feldman reviewed and made some constructive criticism of the plan but, ultimately, felt the need to recommend the MPSC reject the plan.

Feldman gave several reasons for her ruling. She said Consumers Energy’s modeling of the potential early retirement of two of its coal plants by 2023 relies on “certain unsupported assumptions and certain limited modeling choices.”

Feldman recommended the company provide a revised analysis and recognize other noneconomic and operational factors that indicate early retirement of one or more of those units by 2023 would not be feasible.

She also argued a financial compensation mechanism in Consumers’ IRP did not properly reflect the cost to Consumers Energy and its ratepayers of imputed debt, and if used in the competitive bidding process, would unfairly favor Consumers Energy and its affiliates.

Following Feldman’s decision, the Natural Resources Defense Council, Michigan Environmental Council and Sierra Club filed a position in support of the MPSC recommending changes to the IRP, as permitted by statute, which puts the responsibility back on Consumers Energy to return with a revised plan the commission can approve.

The Business Journal previously reported Consumers Energy filed its IRP to the MPSC in mid-June 2018. The utility’s plan was the first of a newly required cycle of IRPs outlined by the 2016 energy laws. The plan must look out 15 to 20 years, forecast what customers will need and craft a path for how to meet those needs.

Consumers Energy outlined a vision for the company that showed over 40 percent of its energy coming from renewable sources, over 20 percent coming from demand-side resources like energy efficiency and zero coal generation by 2040.

The IRP intended to reduce carbon emissions by 80 percent by replacing coal with up to 5,000 megawatts of solar energy throughout the 2020s, along with wind and battery storage.

Consumers proposed retiring two aging coal-fired units at the Karn-Weadock Generating Complex near Bay City in Hampton Township in 2023. Three remaining coal-fired units at the Campbell Generating Complex near Holland will continue to operate until the end of their design lives which, according to Consumers, would be 2031 for Campbell 1 and 2 and 2040 for Campbell 3.

The company projected the change would increase renewable energy usage from 11 percent today to 37 percent by 2037 and 43 percent by 2040.

IRPs are required under Section 6t of Public Act 341 of 2016. The section requires Michigan electric companies whose rates are regulated by the MPSC to submit an IRP to the MPSC for review and approval.

It also requires the MPSC to determine modeling parameters and assumptions for utilities to use when filing IRPs and to issue an order establishing filing requirements, including application forms and instructions, and electric utility filing deadlines for IRPs.

In response to the recent development, Roger Morgenstern, senior public information director for Consumers Energy, said the utility stands by its IRP.

“The Clean Energy Plan is one of the boldest plans in the nation to invest in over 6,000 MW of new solar in Michigan over the next two decades to replace retiring coal and nuclear generation,” he said. “Consumers Energy looks forward to working with all interested stakeholders to reach a solution that is the best for Michigan.”

The MPSC will provide an initial order that could include recommendations to the plan on April 11. If conditional approval is given, Consumers Energy will have until May 10 to submit a revised plan incorporating any commission changes, with a final commission order scheduled for June 10.

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