Dive Brief:
- Michigan regulators on Friday approved Consumers Energy's latest integrated resource plan, which will shutter its Karn coal-fired plant by 2023, setting the utility on a course to eliminate coal entirely and by 2040 reduce emissions from power plants by 90%.
- The IRP is the first long-term utility strategy the Michigan Public Service Commission (PSC) has acted on since the state's energy laws were changed in 2016 to require that the commission develop modeling parameters and assumptions for utility IRPs.
- Consumers says it will add 5 GW of solar energy through competitive bidding by 2030. The utility will conduct annual auctions, to be administered by an independent third party, for adding future power generation capacity.
Dive Insight:
Consumers' newly-approved plan represents a major shift for the utility and for how Michigan analyzes utility plans.
"This is a significant milestone in the implementation of Michigan’s 2016 energy laws," PSC Chairman Sally Talberg said in a statement.
The annual competitive bidding process will add 1,200 MW of new solar energy from 2019 to 2021. Consumers will be allowed to own up to half of all the future additional capacity that it procures through competitive bidding, but the PSC said it must acquire the remainder through power purchase agreements with unaffiliated third parties.
The resource plan calls for retirement of Units 1 and 2 at the D.E. Karn Plant in 2023, replacing them with renewable energy sources and efficiency. The commission said Consumers has committed to pursuing customer cost savings through securitization to recover the unamortized book value of the closed units.
Consumers will also conduct a retirement analysis of Units 1 and 2 at the coal-fired J.H. Campbell Plant, and possibly retire them as early as 2025.
The PSC's June 7 order approved a contested settlement, after regulators determined it was "fair and reasonable and assures reliable service to customers."
Parties to the agreement include the utility, commission staff, Michigan Environmental Council, Natural Resources Defense Council, Sierra Club, and other groups.
Several groups did not join the settlement, but offered a statement of non-objection, including the Environmental Law and Policy Center, Invenergy, the Ecology Center, the Union of Concerned Scientists and Vote Solar.
Consumers will file a new IRP in June 2021.
Last year, facing a possible ballot initiative to require more renewable energy, Consumers and DTE Energy announced they would aim for at least a 50% Clean Energy Goal by 2030, with specifics to be worked out in their respective IRPs.
"It’s important to understand the role that everyone plays in Michigan’s clean energy future," Consumers Energy CEO Patti Poppe said in a statement.
The Clean Energy Plan "is a response to customers who care deeply about how Consumers Energy handles issues such as air quality, water management and greenhouse gas emissions," according to the utility.
