Michigan PSC kicks off review of updated avoided costs under PURPA

May 3, 2016

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today initiated proceedings (Case No. U-18089 et al) to establish updated avoided costs for rateregulated electric utilities under the Public Utility Regulatory Policies Act (PURPA) of 1978.

PURPA is the federal law that allows certain small power producers to sell their electricity to utilities.

The MPSC on Oct. 27, 2015 noted the current method used to determine a utility’s avoided cost rate under PURPA has been in place since the early 1980s, and ordered the director of the MPSC’s Energy Reliability Division to form a technical advisory committee to assess whether the MPSC’s current regulatory PURPA implementation is still appropriate and to report its findings and recommendations by April 8.

The MPSC agrees with the Commission’s staff recommendations in that report to commence proceedings and today directed Consumers Energy, DTE Electric Company, Alpena Power Company, Upper Peninsula Power Company and Thumb Electric Cooperative to file proposed avoided cost calculations and proposed standard rate tariffs by June 17 in their respective dockets. These in-state utilities will provide avoided cost calculations using two specific methodologies and another method, if any, at the option of the utility. Indiana Michigan Power Company, Northern States Power Company, Wisconsin Public Service Corporation and Wisconsin Electric Power Company shall file their avoided cost methods and calculations by June 30.

Three prehearing conferences on these cases will be held at 9 a.m. on July 21 before an administrative law judge at the MPSC offices in Lansing.