May 04, 2026

Why Consumer’s Proposed Dam Sale is Bad for Michigan

There are better options to protect Michigan ratepayers, rivers, and taxpayers.

By Daniel Abrams, Senior Associate Attorney

Aging dams are front and center in Michigan this spring, after the historic flooding along the Cheboygan River in Northern Michigan. In this context, Consumers Energy’s proposal to sell 13 dams to a private equity firm, locking in a costly long-term power deal only creates more uncertainty and leaves Michiganders exposed to further risk. 

ELPC is representing Michigan-based anglers and conservation organizations to scrutinize and oppose the sale. Last week, we took the next step to challenge this plan and protect Michigan communities, rivers, and ratepayers. The Michigan Public Service Commission should reject this deal and push for better solutions. Here are some of our main arguments. 

Read opening brief

Read reply brief

Dam Safety is a Top Concern 

Intense rain and flooding in recent weeks has resulted in a state of emergency for 40 counties and the cities of Ann Arbor and Kalamazoo. The floodwaters also expose dam safety risks, putting pressure on aging dams and raising community concerns. The high waters make clear the importance of responsible dam ownership.  

As a regulated public utility, Consumers Energy has public stewardship responsibilities and obligations to the people of Michigan to do such maintenance or retirement, but an out-of-state private equity firm does not. Confluence Hydro plans to create 13 separate LLCs that it can bankrupt at any time, leaving unprofitable dams to the public to clean up the mess. Consumers must step up to its responsibility, not slough it off to someone else. 

The Math Doesn’t Work Without Costing Michiganders  

Consumers Energy claimed it was too expensive to keep the dams, but there is no evidence that Confluence Hydro would be any better. They plan on keeping the same team to manage operations, and there are no plans for renovation or higher efficiency. Confluence has failed to meaningfully answer the question at the center of the case: how can it operate these dams profitably where Consumers has historically failed? The most reasonable explanation is simple — they plan to offload costs onto the public.  

The proposal is built on an unreasonably priced power purchase agreement that would require Consumers customers throughout the region to buy back the dams’ energy from Confluence at double the current market rate. On top of that, Consumers would also charge Michigan ratepayers an extra 7% to manage the agreement, despite the fact that Consumers Energy has owned and profited from these dams for over a century. Importantly, MHRC and other intervenors demonstrated that other alternatives, namely decommissioning and Consumers relicensing the dams, are more affordable than the sale. Michigan households are already struggling to pay the bills. These measures would exacerbate energy affordability problems across the state.  

Here’s where we must consider the risk of abandonment again. Michigan has sadly learned these lessons from Boyce Hydro LLC’s ownership of the Edenville and Sanford Dams and UP Hydro’s LLC ownership of the Au Train Dam. Private equity firms bought powerplants to maximize profits, turned them into individual LLCs, went bankrupt, and left the cost and liabilities to taxpayers. Confluence Hydro is a newly-created entity that has no track record of owning or operating hydroelectric dams. It’s the same pattern all over again.  

Rejecting the Dam Sale is in the Public Interest 

Consumers Energy’s proposed sale of the 13 dams creates unacceptable risks to the State of Michigan, its ratepayers, and taxpayers. Confluence Hydro has carefully designed a “house of cards” that, if and likely when it collapses, transfers the risks to the State of Michigan and its taxpayers and ratepayers, away from the out-of-state private equity firm and its investors. For all these reasons, the Michigan Public Service Commission should deny approval of these misguided proposals.