Michigan PSC wants input on future power capacity issues

The Michigan Public Service Commission on Dec. 4 both closed its annual look for 2014 at capacity issues in the state, and opened up its 2015 inquiry into the same issues.

“This order calls upon electric utilities regulated by the Commission, alternative electric suppliers, utility affiliates, and certain power supply cooperatives and associations to submit a self assessment of their ability to meet their customers’ expected electric requirements and associated reserves during the five-year period of 2015 through 2019,” said the order opening up the 2015 case.

Beginning in 1998, the Commission commenced annual investigations into the adequacy and reliability of the electric generation capacity for meeting customer requirements in the Consumers Energy, DTE Electric and Indiana Michigan Power service territories.

As in prior years, Michigan electric utilities and other load-serving entities (LSEs) should file assessments of their plans for meeting customer loads during the 2015 to 2019 timeframe. Midcontinent Independent System Operator (MISO), PJM Interconnection (PJM), and providers of transmission services in Michigan are invited to file comments regarding issues that affect the role of transmission in ensuring reliability and capacity availability; and other interested persons are also invited to file comments.

On Oct. 24, 2014, MISO reported that its Zone 7, which comprises the majority of Michigan’s Lower Peninsula, is expected to be 3,000 MW short of its reserve margin in 2016. This projection is based on information obtained by MISO from load serving entities in its footprint in response to the MISO survey on capacity additions and retirements that was conducted this past year in collaboration with the Organization of MISO States (OMS).

“Given that MISO will be collecting and analyzing similar information from LSEs in its footprint during 2015 through the MISO-OMS Resource Adequacy Survey and given that discrepancies may arise between MISO’s results and what is reported to the Commission, the Commission also finds it appropriate for LSEs to provide the Commission their MISO-OMS survey submittals, including the balance sheet produced by MISO that summarizes each LSE’s submittal, “ the Michigan PSC added. “The Commission recognizes that the timing of these submittals may occur after the initial filing deadline described below, and directs LSEs to supplement their filings in this docket with the survey-related information as that information is submitted or updated during 2015.”

The PSC said: ‘[T]he Commission is very concerned that Michigan faces capacity shortfalls (i.e., resources not adequate to cover expected demand plus an adequate reserve margin) as early as 2016 when numerous coal fired power plants are retired due to federal environmental regulations. Expected capacity shortfalls increase the probability of electric outages resulting from potential shortages during peak load periods, extreme weather, equipment failures, or other system disruptions. Therefore, the provision of adequate resources requires prompt attention by the Commission and Michigan’s LSEs to ensure that capacity supplies are adequately planned and available to reliably meet customer demand, including customers served by alternative electric suppliers. The assessments will not solve this capacity shortfall or serve as a forum to identify and evaluate capacity solutions but the assessments are intended to provide a meaningful and transparent picture of the supply outlook and associated risks for the state as a whole and for individual providers. Toward that end, the Commission stresses the need for complete, accurate, and detailed reporting by LSEs.”

By Feb. 17, 2015, all Michigan-regulated electric utilities, including member-regulated cooperatives, need to file an assessment of the utility’s ability to meet its customers’ expected electric requirements in the 2015-2019 timeframe.

Said the Dec. 4 order closing the 2014 inquiry about the coal-fired Presque Isle plant: “A combination of factors, including a single aging coal plant that is needed for reliability and the movement of customers away from the incumbent utility [Wisconsin Electric Power] through customer choice has contributed to retirement plans for the plant in question. This reliability issue is evident in contentious proceedings before the Federal Energy Regulatory Commission (FERC) over the allocation of costs between Michigan and Wisconsin for the continued operation of the plant. While options to build new generation and other options to meet long-term needs are being explored among market participants, the Commission reiterates its finding in its June 19, 2014 order in this proceeding that the need to ensure reliable, affordable electric power to Upper Peninsula customers over the long run remains an outstanding issue.”

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.