Michigan PSC creates workgroup to study rate design issues for distributed energy

Published on February 08, 2021 by Chris Galford

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Among a series of cases addressed last week, the Michigan Public Service Commission (MPSC) approved the creation of a new MI Power Grid workgroup to investigate rate design issues for distributed energy resources and adopted a definition of utility pilot projects.

In one case, the Commission created the Distributed Energy Resources Rate Design workgroup in response to a Michigan Senate request for the MPSC to study rate design issues linked to the growth of distributed energy resources. This investigation will be aided by the Regulatory Assistance Project (RAP) to analyze rate design options.

MPSC staff will have to file a report by Sept. 1, 2021. That report will include a comprehensive analysis of how customer-owned generation and energy storage are altering usage of the grid, cost allocation and possible customer charges, proposed rate designs, and recommendations for Commission consideration. A comment period for stakeholders and the public will follow.

This will all be handled under the umbrella of MI Power Grid, an initiative launched by Gov. Gretchen Whitmer to maximize the benefits of the clean energy transition, focusing on customer engagement, integration of new technologies, and optimizing grid investments and performance.

In a separate case, the MPSC adopted a definition of pilot projects and criteria for evaluating those projects while simultaneously extending deadlines for status reports on that effort until the third quarter of 2021, owing to challenges caused by the COVID-19 pandemic. The final MI Power Grid report will be submitted no later than Oct. 1, 2022.

Additionally, the Commission approved a Consumers Energy Co. application to share with its customers the $14 million earned from the sale of transmission assets to the Michigan Electric Transmission Co. Those funds will be used to cover storm-restoration costs that exceed amounts included in Consumers’ regulated rates, with any remaining funds distributed to customers through a bill credit in 2022.

Consumers also gained approval for several power purchase agreements: 10.7 MW between Consumers and members of the Independent Power Producers Coalition of Michigan for landfill gas-fueled facilities, and 12 MW between Consumers and Michigan Wind 1 LLC for the output of the Oceana 1 Wind Farm Plant in support of Consumers’ Green Generation voluntary green pricing program.