Economic Development, Sustainability, and Technology

MPSC looks ahead to cleaner future for Michigan

Polar vortex forced commission to review Michigan’s energy supply and preparedness.

December 27, 2019
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The Michigan Public Service Commission reported an “extraordinary” 2019 as the agency dealt with immediate challenges and looked ahead to a cleaner power grid.

“I feel like we’re taking the steps necessary as the energy system continues to transition and looking at how we can benefit from that transition,” said Commissioner Dan Scripps, who joined the MPSC in February. “What we’ve seen in states where they haven’t been proactive, there’s a danger of being run over by change and locked into old models.”

The year kicked off with a jolt to the state’s energy supplies, in the form of a polar vortex, that spurred a review of Michigan’s ability to keep natural gas and electricity flowing. 2019 also included the launch of a new initiative to guide the state’s rapid transition to clean energy. Also among the year’s big achievements was ensuring that more than $4 billion in federal tax cuts for Michigan’s energy companies were returned to ratepayers.

Highlights from 2019 include:

Statewide assessment

Amid the 2019 polar vortex, a Consumers Energy compressor station fire limited the state’s natural gas supply, and customers were urged to turn down their thermostats in order to reduce demand for natural gas. Simultaneously, a regional electricity generation emergency led to demand-response customers being asked to reduce electricity use.

Gov. Gretchen Whitmer subsequently asked the MPSC to review the state’s energy supply and preparedness, and in September, the agency released a 200-page Statewide Energy Assessment outlining immediate steps the commission and its staff will take to ensure the state’s energy systems become more resilient and able to withstand extreme weather events, aging infrastructure and other challenges.

New energy supplies

The state’s shift to clean generating resources such as wind and solar continued with hundreds of megawatts of future renewable energy projects being approved through MPSC orders in several renewable energy cases and in integrated resource plans for Consumers Energy Co., Alpena Power Co., Upper Michigan Energy Resources Corp., and Upper Peninsula Power Co. The MPSC also saw overall expansion in demand response and energy waste reduction programs.

“A lot of states are having this discussion,” Scripps said. “What I think separates Michigan from others is the focus on action. This isn’t designed to be a series of reports or workshops to be put on the table. The focus on operations and the benefit to customers is what I think separates Michigan from a lot of the other states.”

Consumers was the first utility required to submit an IRP. In June 2018, the utility filed its original plan, and on March 23, the MPSC proposed a modified settlement that most parties supported. The MPSC approved the plan in June.

Consumers expects to meet 90% of customers’ electricity capacity needs through clean energy resources like renewable energy, energy waste reduction and energy storage by 2040, with the addition of 5,000 megawatts of solar energy through competitive bidding even earlier by 2030.

Ensuring affordability

The MPSC’s low-income working group continued its work with state agencies, utility providers and stakeholder groups on how energy waste reduction and energy efficiency programs can help make customers’ utility bills more affordable. MPSC staff also worked with the Department of Health and Human Services to enhance energy assistance and with utility companies on rates for low-income customers. The MPSC is lending support to the work of Gov. Whitmer’s UP Energy Task Force, which is led by the Department of Environment, Great Lakes and Energy and includes affordability as a focus.

Telecommunications

Michigan joined the National Lifeline Eligibility Verifier, allowing for streamlined eligibility screening for telecommunications carriers offering federal Lifeline phone and broadband customer discounts. The commission completed the final rebalancing of the Intrastate Switched Toll Access Restructuring Mechanism with almost $9 million disbursed.

The MPSC also completed a cost study model to review costs for next generation 911 service providers. Staff also coordinated with other state agencies to help review grants for $20 million in Connecting Michigan Communities broadband grants, which will be awarded in summer 2020.

Distributed generation pricing

Pursuant to Michigan’s 2016 energy law, the MPSC approved new distributed generation tariffs in May 2019 for customers of DTE Electric and Upper Peninsula Power Co. with on-site renewable energy systems such as solar panels. Customers will receive full energy and capacity payments for any excess generation supplied to the utility. Adoption of distributed generation in Michigan continues to grow, and the number of installations producing power increased by nearly 5% in 2018, according to the MPSC.

MI Power Grid

The MPSC in October launched MI Power Grid, a new multiyear initiative to guide Michigan residents and businesses through the energy industry’s rapid transition to clean energy.

MI Power Grid’s three areas of emphasis are customer engagement, integrating emerging technologies, and optimizing grid performance and investments. The MPSC believes a modernized electric grid will help improve reliability and encourage adoption of new technologies, like electric vehicles, electricity storage, smart sensors and controls. 

Tax cuts

The MPSC concluded its work in fall 2019 to ensure that $4.1 billion in tax cuts for the state’s utilities through the federal 2017 federal tax overhaul were returned to ratepayers through monthly bill credits or longer-term adjustments to rates.

“When the tax cuts and jobs act was passed in 2017, that had a huge impact on utilities,” Scripps said. “Ultimately, we made the decision to say those savings are customer savings, and they need to be returned to customers.”

Infrastructure and oversight

The MPSC’s Gas Operations Section launched a new database system to track inspections of gas pipeline companies, investigation of incidents and damage prevention enforcement activities. Staff investigated issues related to utility companies being late to mark thousands of excavation notifications. Gas safety staff continued to support and monitor pipeline infrastructure replacement, which resulted in the elimination of more than 275 miles of high-risk distribution mains in 2019.

Electric vehicle pilots

Consumers Energy and DTE Electric launched electric vehicle pilot programs approved by the MPSC aimed at removing barriers to EV adoption and effective planning of EV charging infrastructure. The experimental programs will test technology innovations, rate design, customer response and other factors. Pilot program data and lessons learned will help utilities and the commission to make more informed decisions over the long term.

Other changes

Scripps joined the commission in February, Commissioner Norm Saari ended his term in August and Commissioner Tremaine Phillips came aboard in September.

The Energy Security section was transferred to the MPSC. The commission hired a new public information officer and a new executive secretary. It also created a new communications section to increase transparency and public outreach and education, including a new website and expanded social media presence.

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