Dive Brief:
- The Michigan Public Service Commission last week established a capacity demonstration process that requires all electric providers in the state to demonstrate they have adequate resources secured to be able to reliably serve customers four years into the future.
- Beginning in 2022, retail choice providers would also need to show that some portion of their energy sales were coming from generation based in Michigan, called a "local clearing requirement" (LCR).
- Opponents of the LCR fear it could cripple the state's choice market. Last year, the state legislature passed a bill maintaining Michigan's 10% cap on retail choice customers, but opponents of the PSC's current proposal say it is directly contrary to what lawmakers intended.
Dive Insight:
Final rules out of the Michigan PSC include a local clearing requirement that opponents fear could roll back the state's choice market. But regulators have set that requirement aside for the time being, at least until 2022.
The new requirements seek to fulfill a 2016 law requiring all electric providers to annually demonstrate they have owned or contracted resources adequate to serve customer needs four years out.
“The Commission's implementation of the new 'resource adequacy' requirements in the 2016 energy law provides flexibility for energy providers while ensuring Michigan homes and businesses have adequate electricity supplies over the long term,” MPSC Chairman Sally Talberg said in a statement. "The new law is clear that all electric providers must contribute to and support the reliability of our electric system."
RTO Insider notes that regulators issued another order last week opening a docket for choice providers to demonstrate capacity reliability. Michigan Public Radio reports the final rules show lawmakers took the side of utilities DTE Energy and Consumers Energy, who argued lax customer choice rules were a threat to grid stability.
BridgeMI.com and Crain's Detroit Business report regulators have yet to decide what portion of a retail choice provider's supplies would need to come from within Michigan.
