Press Release

Press Release: Michigan Public Service Commission Opens Door to Renewable Energy

May 31, 2017

Contact: David Jakubiak

Michigan Public Service Commission Opens Door to Renewable Energy
Electric Customers and Clean Energy Developers Should Welcome Updates to Ratepayer Protections, Compensation in Consumers Energy Case

LANSING, MI – An order updating the terms available to renewable energy developers from regulated utilities should open the door to more clean and renewable energy projects in the state, while making sure utility customers are not asked to pay more for their electricity.

“The updates to the methodology for how smaller renewable energy projects will be compensated by utilities sends a strong signal to developers that Michigan is a good place to do business,” said Margrethe Kearney, senior staff attorney with the Environmental Law & Policy Center in Grand Rapids, MI.

On Wednesday the Commission approved a fair method for calculating rates Consumers Energy must pay to renewable energy facilities in Michigan for the power those facilities supply to the grid.  The order is the Commission’s first update in 25 years of the approach utilities must take under federal law to compensate the owners of qualified clean energy facilities.

Passed in 1978, the Public Utility Regulatory Policies Act was created to encourage renewable energy development, reduce reliance on fossil fuels and promote energy independence. It requires utilities to purchase energy from small qualified cogeneration and renewable energy providers and establishes what are known as “avoided costs” and “must-buy prices” that utilities pay to small renewable energy providers.

Through Wednesday’s order, the Commission established avoided cost calculations based on the costs of energy and capacity from new natural gas facilities, creating an even playing field for independent developers of qualified clean energy projects. The order also simplifies the development and financing process for small projects by establishing 20-year contracts at a standard rate for projects up to 2 megawatts in size. Previously only projects up to 100 kilowatts were eligible.

“The Commission’s order today will provide Michigan customers with more renewable energy at no higher cost, increase our energy independence, and reduce our reliance on fossil fuels,” Kearney said.