FERC okays life-support deals for four Consumers Energy gas units

The Federal Energy Regulatory Commission on Dec. 12 signed off on a System Support Resource (SSR) agreement between the Midcontinent ISO and Consumers Energy that keeps three gas-fired units operating until September 2014.

On Oct. 16, MISO submitted for filing an executed SSR agreement regarding Consumers’ Gaylord Units 1-3, located in northern Michigan. The SSR agreement provides compensation for the continued availability of the Gaylord units until such time as they are no longer needed for reliability purposes.

Also on Oct. 16, MISO submitted for filing proposed Rate Schedule 43D under the MISO Tariff which allocates the costs associated with implementing the Gaylord SSR agreement to load serving entities in the Consumers local balancing area.

Gaylord Units 1-3 provide about 40 MW of capacity. These units are natural gas-fired combustion turbines that were installed in 1968.

Consumers originally submitted to MISO an August 2011 notice in which Consumers stated its intention to suspend Gaylord Units 1-4 for thirty-six months. The date for the beginning of the suspension was not stated.

MISO completed its reliability analysis and notified Consumers in February 2012 that the Gaylord units would be SSR-designated until such time as appropriate alternatives could be implemented to mitigate reliability issues. Consumers later informed MISO that Unit 4 was inoperable and had been in an outage status since April 2010. In later correspondence, Consumers stated its desire to suspend the Gaylord units at a later date, and Oct. 1, 2013, was agreed upon by the parties to the SSR agreement.

MISO began working with Consumers and the MISO Independent Market Monitor to negotiate and develop an appropriate SSR agreement. Consumers submitted a draft SSR agreement for MISO’s consideration on Aug. 23 and Consumers proposed a 12-month SSR agreement for the period between Oct. 1, 2013 and Sept. 30, 2014. Consumers has voluntarily continued operating Gaylord through the present time, MISO noted in the Oct. 16 application.

Straits SSR also approved by FERC

Also on Dec. 12, FERC approved for Consumers a separate SSR on a gas unit at the Straits power plant. The Straits SSR agreement provides compensation for the continued availability of the Straits unit until such time as it is no longer needed for reliability purposes.

Straits, with 10 MW of capacity, is located near Mackinaw City in northern Michigan. Straits is a natural gas-fired combustion turbine installed in 1968.

Consumers originally submitted to MISO an August 2011 notice in which Consumers stated its intention to suspend Straits for thirty-six months. The date for the beginning of the suspension was not stated. MISO completed its reliability analysis and notified Consumers in February 2012 that Straits would need to be SSR-designated. MISO determined that three transmission reinforcements, due for completion by mid-2014, would be needed to resolve reliability problems. In later correspondence, Consumers agreed to suspend Straits and begin SSR status for Straits as of Oct. 1, 2013.

MISO began working with Consumers and its IMM to negotiate an appropriate SSR agreement. Consumers submitted a draft SSR agreement for MISO’s consideration on Aug. 23 and Consumers proposed a 12-month SSR agreement for the period between Oct. 1, 2013, and Sept. 30, 2014. Consumers has voluntarily continued operating Straits.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.