STATE OF MICHIGAN
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
*****
In the matter, on the Commission’s own motion,
to open a docket to implement the provisions of
Section 6w of 2016 PA 341 for
CONSUMERS ENERGY COMPANY’S
service territory.
In the matter, on the Commission’s own motion,
to open a docket to implement the provisions of
Section 6w of 2016 PA 341 for
DTE ELECTRIC COMPANY’S service territory.
In the matter, on the Commission’s own motion,
to open a docket to implement the provisions of
Section 6w of 2016 PA 341 for
UPPER MICHIGAN ENERGY RESOURCES
CORPORATION’S service territory.
In the matter, on the Commission’s own motion,
to open a docket to implement the provisions of
Section 6w of 2016 PA 341 for
UPPER PENINSULA POWER COMPANY’S
service territory.
In the matter, on the Commission’s own motion,
to open a docket to implement the provisions of
Section 6w of 2016 PA 341 for
CLOVERLAND ELECTRIC COOPERATIVE’S
service territory.
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Case No. U-18239
Case No. U-18248
Case No. U-18253
Case No. U-18254
Case No. U-18258
At the February 28, 2017 meeting of the Michigan Public Service Commission in Lansing,
Michigan.
PRESENT: Hon. Sally A. Talberg, Chairman
Hon. Norman J. Saari, Commissioner
Hon. Rachael A. Eubanks, Commissioner
ORDER CONCERNING IMPLEMENTATION OF SECTION 6W OF ACT 341 OF 2016
In separate orders issued on January 20, 2017, in Case Nos. U-18239 and U-18248 for
Consumers Energy Company (Consumers) and DTE Electric Company (DTE Electric),
respectively, (the January 20 orders) the Commission commenced proceedings for those utilities to
implement a solution to the issue of a potential future electric resource adequacy shortfall in their
service territories. 1 As a result of a regulatory proceeding then pending before the Federal Energy
Regulatory Commission (FERC) and recent legislative changes approved by Michigan’s
Legislature, 2 three alternative solutions to long-term resource adequacy concerns facing the state
of Michigan and the customers of Consumers and DTE Electric, including those served by
alternative electric suppliers (AESs), appeared to be possible. 3 The three alternative solutions are
set forth in Section 6w(1) and 6w(2) of Act 341, and are as follows: (1) a three-year Forward
Resource Auction (FRA) embodied within the Competitive Retail Solution (CRS) application filed
1
See, the discussions regarding this state’s long-term resource adequacy concerns
contained in the January 20 orders and in the July 22, 2016 order in Case No. U-17992.
2
3
See, Section 6w of 2016 PA 341 (Act 341).
The Commission noted that unanticipated resource adequacy shortfalls experienced by
investor-owned utilities were not the sole source for concern. Indeed, the Commission has
previously expressed a need to ensure that all load serving entities (LSEs), including AESs, would
contribute to solving the long-term capacity needs of this state. See, the December 4, 2014 order
in Case No. U-17523 and the July 23, 2015 order in Case No. U-17751.
on November 1, 2016 by the Midcontinent Independent System Operator, Inc. (MISO), that was
contingent upon approval by the FERC; (2) a Prevailing State Compensation Mechanism (PSCM)
that also required FERC approval; and (3) a State Reliability Mechanism (SRM).
On February 2, 2017, the FERC issued an order (the February 2 order) rejecting MISO’s
CRS tariff filing in Docket No. ER17-284-000. The FERC determined that the FRA proposed by
MISO, which would apply to a small amount of load within MISO and would occur more than
three years prior to MISO’s existing Planning Resource Auction (PRA), would bifurcate the MISO
capacity market. According to the FERC, “this bifurcated approach could have uncertain, and
potentially adverse, impacts on price formation in both the [FRA] and the [PRA].” February 2,
2017 order, Docket No. ER17-284-000, p. 2. The FERC opined that such a bifurcated market
could have a high potential for volatility and might not efficiently clear prices. The FERC stressed
that no other FERC-jurisdictional wholesale capacity market clears capacity through use of two
distinct market clearing mechanisms held at different points in time, adding that “[m]arket-wide
clearing processes are typically more efficient than bifurcated clearing processes.” February 2,
2017 order, Docket No. ER17-284-000, p. 3. The FERC also found that MISO had failed to
completely explain how transmission constraints would be handled between the FRA and the
PRA. February 2, 2017 order, Docket No. ER17-284-000, p. 4. The FERC did not expressly
comment on the PSCM proposal that was set forth in MISO’S CRS filing. Notwithstanding, the
Commission understands that the PSCM was also rejected in the February 2 order.
Given that the FERC has denied MISO’s November 1, 2016 application, the scope of the
proceedings and the schedules established by the January 20 orders applicable to Consumers and
DTE Electric need to be revised. Specifically, because of the FERC’s February 2 order, any
further efforts by the Commission to implement Section 6w(1) of Act 341 may no longer be
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U-18239 et al.
required. Because the FERC rejected MISO’s proposed CRS tariff, the Commission seeks input
on whether Consumers and DTE Electric should be relieved of the requirement that the
applications to be filed by these utilities in Case Nos. U-18239 and U-18248 include testimony and
exhibits regarding “[w]hether the capacity mechanisms described in Sections 6w(1) and (2) of Act
341 are more cost-effective, reasonable, and prudent than MISO’s FRA.” January 20 orders, p. 6.
If the scope of these proceedings were limited in this manner, the focus of these proceedings
would be solely on the requirements of Section 6w(2) of Act 341, which provides:
If the appropriate independent system operator receives approval from the Federal Energy
Regulatory Commission to implement a resource adequacy tariff that provides for a capacity
forward auction, and does not include the option for a state to implement a prevailing state
compensation mechanism for capacity, then the commission shall examine whether a state
reliability mechanism established under subsection (8) would be more cost-effective,
reasonable, and prudent than the capacity forward auction for this state before the commission
may order the state reliability mechanism to be implemented in any utility service territory.
Before the commission orders the implementation of the state reliability mechanism in 1 or
more utility service territories, the commission shall hold a contested case hearing pursuant to
chapter 4 of the administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.287.
The commission shall allow intervention by interested persons, alternative electric suppliers,
and customers of alternative electric suppliers and the utility under consideration. At the
conclusion of the proceeding, the commission shall make a finding for each utility service
territory under consideration, based on clear and convincing evidence, as to whether or not the
state reliability mechanism would be more cost-effective, reasonable, and prudent than the use
of the capacity forward auction for this state in meeting the local clearing requirement and the
planning reserve margin requirement. The contested case must be scheduled for completion
by December 1 before the independent system operator’s capacity forward auction for this
state, and the commission’s decision shall identify which utility service territories will be
subject to the state reliability mechanism. If, by September 30, 2017, the Federal Energy
Regulatory Commission does not put into effect a resource adequacy tariff that includes a
capacity forward auction or a prevailing state compensation mechanism, then the commission
shall establish a state reliability mechanism under subsection (8). The commission may
commence a proceeding before October 1 if the commission believes orderly administration
would be enabled by doing so. If the commission implements a state reliability mechanism, it
shall be for a minimum of 4 consecutive planning years beginning in the upcoming planning
year. A state reliability charge must be established in the same manner as a capacity charge
under subsection (3) and be determined consistent with subsection (8). (Emphasis added).
Additionally, until the Commission is able to assess the implications of the FERC’s February
2 order and whether the auction and/or the PSCM are still viable, the Commission finds that the
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U-18239 et al.
schedules set in the January 20 orders for Consumers and DTE Electric should be temporarily
suspended. Originally, the January 20 orders required Consumers and DTE Electric to file
applications in their respective dockets on March 3, 2017. Today’s order relieves Consumers and
DTE Electric of having to file applications on March 3, 2017, cancels the filing deadline for
petitions to intervene that was scheduled for March 10, 2017, and also cancels the separate
prehearing conferences for Consumers and DTE Electric scheduled for March 16, 2017. Once the
Commission has had a chance to further evaluate the implications from the FERC’s February 2
order, the Commission intends to issue another scheduling order for all of the captioned
proceedings.
Unlike the January 20 orders, this order contains captions for Upper Michigan Energy
Resources Corporation (UMERC), Upper Peninsula Power Company (UPPCo), and Cloverland
Electric Cooperative (Cloverland), each of which currently serves or has choice customers
enrolled for service. Case No. U-18253 is being opened for UMERC. Case No. U-18254 is being
opened for UPPCo. And, Case No. U-18258 is being opened for Cloverland. The January 20
orders did not apply to UMERC, UPPCo, or Cloverland because the application filed in Docket
No. ER17-284-000 by MISO for approval of its CRS included provisions that would have
exempted the choice loads of the utilities serving customers in Michigan’s Upper Peninsula
because those loads did not meet MISO’s materiality threshold. However, nothing in Section
6w(2) of Act 341 excludes any AES loads in Michigan from operation of the SRM. Accordingly,
the Commission seeks comment on whether to move forward at this time to establish an SRM for
these utilities.
The Commission has opted to briefly refrain from re-scheduling the proceedings for
Consumers and DTE Electric or establishing schedules for the proceedings applicable to UMERC,
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U-18239 et al.
UPPCo, and Cloverland in order to allow a limited opportunity for the Commission Staff (Staff),
the affected utilities, and other interested persons to comment on the scope of these proceedings
and the associated schedules in light of the FERC’s decision and the potential shift in the focus
away from Section 6w(1) towards Section 6w(2) of Act 341. Toward this end, the Commission
will entertain comments filed in these dockets by the Staff, the affected utilities, and other
interested persons on the future course of these proceedings until 5:00 p.m. on March 7, 2017.
Finally, because each of these cases is required by Act 341 to be processed as a contested case
proceeding, the Commission encourages potential intervenors to begin filing their petitions to
intervene in these dockets.
THEREFORE, IT IS ORDERED that:
A. The Commission’s Executive Secretary shall electronically serve copies of this order on
Consumers Energy Company, DTE Electric Company, Upper Michigan Energy Resources
Corporation, Upper Peninsula Power Company, Cloverland Electric Cooperative, Energy
Michigan, the Association of Businesses Advocating Tariff Equity, the Retail Energy Supply
Association, and on every licensed alternative electric supplier in Michigan.
B. The schedules for the proceedings established for Consumers Energy Company and DTE
Electric Company in the January 20, 2017 orders in Case Nos. U-18239 and U-18248,
respectively, are suspended as more fully set forth in the order.
C. The Commission Staff, Consumers Energy Company, DTE Electric Company, Upper
Michigan Energy Resources Corporation, Upper Peninsula Power Company, Cloverland Electric
Cooperative, and other interested persons shall have until 5:00 p.m. on March 7, 2017, to file
recommendations in the captioned dockets regarding the scope and the associated schedules for
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U-18239 et al.
these proceedings in light of the Federal Energy Regulatory Commission’s decision and the
potential shift in the focus away from Section 6w(1) towards Section 6w(2) of Act 341 of 2016.
The Commission reserves jurisdiction and may issue further orders as necessary.
MICHIGAN PUBLIC SERVICE COMMISSION
________________________________________
Sally A. Talberg, Chairman
________________________________________
Norman J. Saari, Commissioner
________________________________________
Rachael A. Eubanks, Commissioner
By its action of February 28, 2017.
________________________________
Kavita Kale, Executive Secretary
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U-18239 et al.
PROOF OF SERVICE
STATE OF MICHIGAN )
Case No. U-18239 et al.
County of Ingham
)
Gloria Pearl Jones being duly sworn, deposes and says that on February 28, 2017 A.D. she
electronically notified the attached list of this Commission Order via e-mail transmission,
to the persons as shown on the attached service list (Listserv Distribution List).
_______________________________________
Gloria Pearl Jones
Subscribed and sworn to before me
this 28th day of February 2017
_____________________________________
Lisa Felice
Notary Public, Eaton County
My Commission Expires April 15, 2020
CONSUMERS ENERGY COMPANY, ALTERNATIVE ELECTRIC
SUPPLIER’S, ASSOCIATION OF BUSINESSES ADVOCATING TARIFF
EQUITY, CLOVERLAND ELECTRIC COOPERATIVE, DTE ENERGY
COMPANY, ENERGY MICHIGAN, RETAIL ENERGY SUPPLY
ASSOCIATION, UPPER MICHIGAN ENERGY RESOURCES
CORPORATION, AND UPPER PENINSULA POWER COMPANY’S
ELECTRONIC DISTRIBUTION LIST
FEBRUARY 28, 2017
CASE NO. U-18239
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Page 1 of 2
CONSUMERS ENERGY COMPANY, ALTERNATIVE ELECTRIC
SUPPLIER’S, ASSOCIATION OF BUSINESSES ADVOCATING TARIFF
EQUITY, CLOVERLAND ELECTRIC COOPERATIVE, DTE ENERGY
COMPANY, ENERGY MICHIGAN, RETAIL ENERGY SUPPLY
ASSOCIATION, UPPER MICHIGAN ENERGY RESOURCES
CORPORATION, AND UPPER PENINSULA POWER COMPANY’S
ELECTRONIC DISTRIBUTION LIST
FEBRUARY 28, 2017
CASE NO. U-18239
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Page 2 of 2
Service List -- Case No. U-18239
Name
Mark Eyster
Kelly Hall
Email Address
[email protected]
[email protected]
Serive List -- Case No. U-18248
Name
Jon Christinidis
Mark Eyster
Email Address
[email protected]
[email protected]
Service List -- Case No. U-18258
Name
Cloverland Electric Cooperative
Email Address
[email protected]
PROOF OF SERVICE
STATE OF MICHIGAN )
Case No. U-18239 ET AL.
County of Ingham
)
Gloria Pearl Jones being duly sworn, deposes and says that on January 20, 2017 A.D. she
electronically notified the attached list of this Commission Order (Commission’s Own
Motion) via e-mail transmission, to the persons as shown on the attached service list
(Listserv Distribution List).
_______________________________________
Gloria Pearl Jones
Subscribed and sworn to before me
this 20th day of January 2017
_____________________________________
Steven J. Cook
Notary Public, Ingham County, Michigan
As acting in Eaton County
My Commission Expires: April 30, 2018
GEMOTION DISTTRIBUTION SERVICE LIST
IN CASE NOS. U-18239, U-18248, U-18253, U-18254 & U-18258
[email protected] Mid American
[email protected] Noble Americas
[email protected]
Cloverland
[email protected]
Cloverland
[email protected]
Village of Baraga
[email protected]
Linda Brauker
[email protected]
Village of Clinton
[email protected]
Tri-County Electric Co-Op
[email protected]
Tri-County Electric Co-Op
[email protected]
Tri-County Electric Co-Op
[email protected]
Aurora Gas Company
[email protected]
Citizens Gas Fuel Company
[email protected]
Consumers Energy Company
[email protected]
SEMCO Energy Gas Company
[email protected]
Superior Energy Company
[email protected]
Upper Peninsula Power Company
[email protected]
Midwest Energy Coop
[email protected]
Midwest Energy Coop
[email protected]
Midwest Energy Coop
[email protected]
Alger Delta Cooperative
[email protected]
Cherryland Electric Cooperative
[email protected]
Great Lakes Energy Cooperative
[email protected]
Liberty Power Deleware (Holdings)
[email protected]
Stephson Utilities Department
[email protected]
Ontonagon Cnty Rural Elec
[email protected]
Presque Isle Electric & Gas Cooperative, INC
[email protected]
Thumb Electric
[email protected]
Bishop Energy
[email protected]
BlueStar Energy
[email protected]
CMS Energy
[email protected]
Commerce Energy
[email protected]
Constellation Energy
[email protected] Constellation Energy
[email protected]
Constellation New Energy
[email protected]
DTE Energy
[email protected]
Duke Energy
[email protected]
Duke Energy
[email protected]
First Energy
[email protected]
MidAmerican Energy
[email protected]
My Choice Energy
[email protected]
Noble American Energy
[email protected]
Santana Energy
[email protected]
Spartan Renewable Energy, Inc. (Wolverine Po
[email protected]
Xcel Energy
[email protected]
City of Escanaba
[email protected]
City of Crystal Falls
[email protected]
Lisa Felice
Page 1 of 2
GEMOTION DISTTRIBUTION SERVICE LIST
IN CASE NOS. U-18239, U-18248, U-18253, U-18254 & U-18258
[email protected]
Michigan Gas & Electric
[email protected]
City of Gladstone
[email protected]
Integrys Group
[email protected]
Lisa Gustafson
[email protected]
Tim Hoffman
[email protected]
Interstate Gas Supply Inc
[email protected]
Thomas Krichel
[email protected]
Bay City Electric Light & Power
[email protected]
Lansing Board of Water and Light
[email protected]
Marquette Board of Light & Power
[email protected] Premier Energy Marketing LLC
[email protected] City of Marshall
[email protected]
Doug Motley
[email protected]
Dan Blair
[email protected]
Nicholas Nwabueze
[email protected]
Marc Pauley
[email protected] City of Portland
[email protected]
Alpena Power
[email protected]
Liberty Power
[email protected]
Wabash Valley Power
[email protected]
Wolverine Power
[email protected]
Lowell S.
[email protected]
Integrys Energy Service, Inc WPSES
[email protected]
Realgy Energy Services
[email protected]
Volunteer Energy Services
[email protected]
First Energy Solutions
[email protected]
Noble Energy Solutions
[email protected]
Hillsdale Board of Public Utilities
[email protected]
Mich Gas Utilities/Upper Penn Power/Wisconsi
[email protected] Mich Gas Utilities/Qwest
[email protected]
Zeeland Board of Public Works
[email protected] Direct Energy
[email protected] Direct Energy
[email protected] Direct Energy
[email protected]
Direct Energy
[email protected]
ITC Holdings Corp.
[email protected]
Realgy Corp.
[email protected]
Jim Weeks
[email protected]
Indiana Michigan Power Company
[email protected] Santana Energy
[email protected] Upper Peninsula Power Company
[email protected] MEGA
[email protected]
ITC Holdings
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