Because Consumers Energy is considering proposals to buy existing gas-fired power plants in place of the utility’s planned Thetford gas-fired project, the Michigan Public Service Commission agreed to a delay in the Thetford review proceeding.
Consumers Energy in a Jan. 2 motion had asked for the delay, noting that in September 2013, after it filed in July 2013 with the PSC for the approval of the 700-MW Thetford project, it issued a request for proposals (RFP) for the acquisition of existing gas-fired capacity. This capacity would be located within Midcontinent ISO Zone 7.
“The Company has diligently pursued the analysis of the proposals received pursuant to the RFP,” said the Jan. 2 motion. “Because none of the alternatives is identical to the proposed Thetford Plant, that analysis has been complex and time-consuming. Based upon its analysis, the Company has concluded that it is prudent to pursue discussions of the acquisition of an existing gas-fired generation facility. It began such discussions to determine if a suitable contract could be negotiated upon terms and conditions acceptable to the Company.”
The utility, which is a subsidiary of CMS Energy (NYSE: CMS), said it is also engaged in other aspects of “due diligence” including review of plant operation and maintenance records, site visits and environmental assessments. Although it is close to an ultimate decision, the company said it needs some additional time to finalize the potential transaction.
The Jan. 13 order from a PSC administrative law judge pushes back various deadlines in this case by one to two months. For example, a Jan. 10 deadline for Consumers Energy to file supplemental testimony has been re-set to Feb. 10. The target decision date in this case has been pushed back to July 2, from a previous date of May 1. The new hearing dates are April 14-15 and April 28-29.
Consumers Energy didn’t identify any of the parties that it is negotiating with for this existing capacity. But several power plant operators have intervened in the Thetford case to contend that Consumers improperly bypassed their offers to sell capacity from existing or planned power projects, or to sell the plants/projects themselves, to Consumers.
For example, New Covert Generating Co. LLC has told the commission that it has an 1,100-MW, gas-fired combined cycle facility that has been significantly underutilized since it was built early last decade. New Covert’s analysis shows that there are several lower-cost alternatives to the Thetford new-build project, including Consumers buying the New Covert facility.
Also, Midland Cogeneration Venture Limited Partnership (MCV) owns an existing gas-fired power plant in Michigan and wants to sell capacity from an expansion project to Consumers under a power purchase agreement (PPA). MCV is planning to construct a 640-MW natural gas combined cycle facility to be co-located with MCV’s existing 1,633 MW natural gas combined cycle facility.
Another gas-fired power plant operator with a complaint is Renaissance Power LLC, an affiliate of LS Power Development LLC which has an existing plant at Carson City, Mich. The company said it can uprate this facility and sell the plant itself, or capacity from it, to Consumers. The Renaissance plant is a natural gas-fired facility with a net average annual capacity currently of about 716 MW.