Michigan Large Energy User Group Files Appeal Regarding Local Capacity Requirement

Oct 27, 2017

DETROIT, MI - The Michigan-based Association of Businesses Advocating Tariff Equity (ABATE), an organization that protects the interests of Michigan's large energy consumers, has filed a Claim of Appeal with the Michigan Court of Appeals regarding the Michigan Public Service Commission’s decision to impose a four-year forward looking “locational requirement” on retail energy choice providers. This decision would drastically limit the amount of out-of-state electric capacity alternative electric suppliers (AESs) could use to satisfy the new “capacity obligations” imposed by the PSC, under Public Act 341 of 2016.

“The matter is of the utmost importance to Michigan residents, businesses, schools, and large energy users because the imposition of a locational requirement on AESs could very well end Michigan’s already-limited competitive electric market, said ABATE legal counsel Michael Pattwell. “This could force retail open access customers to return to the more expensive monopoly service offered by the incumbent regulated electric utilities who, of course, own nearly all of the capacity resources located in Michigan.”

ABATE’s appeal is narrowly focused on whether the Michigan Legislature empowered the PSC to impose such a locational requirement where Act 341 contains no such express grant of authority and where the Legislature actually struck out a previous version of the legislation that did direct the imposition of such a requirement.  

 “It is more important now than ever before that large energy users step up and be involved in the regulatory and policy process in order to ensure Michigan is a cost-competitive state to operate their businesses,” said Rod Williamson, Executive Director of ABATE.  “There are cases, proceedings, and workgroups taking place this year at the Michigan Public Service Commission to implement the energy legislation that passed last year and was signed into law by Governor Snyder.  The decisions being made by the Commission to implement the energy law will have significant implications for many years to come, for both full service customers of the utilities as well as retail choice customers.  Businesses across Michigan are recognizing the importance of this process and that the ABATE group offers them access to expertise to ensure the concerns and interests of large energy users are addressed.” 

In addition to the energy legislation implementation, three of the largest investor-owned utilities in Michigan (Consumers Energy, DTE Electric, and AEP Indiana Michigan Power) have filed major electricity rate cases seeking revenue increases. Consumers Energy has also provided notice that it will be filing a new natural gas rate case seeking a revenue increase. ABATE is active in all of these cases in order to protect large energy customers.

The ABATE organization has experienced record annual growth in the past year, providing large energy customers with a voice in front of regulatory and policymaking bodies. ABATE is active in a variety of forums, including the Michigan Public Service Commission, the Michigan Legislature, Michigan courts, regional transmission organizations, the Federal Energy Regulatory Commission, and the U.S. Congress.

Some of the new member companies from across Michigan include Hemlock Semiconductor Operations LLC, Pfizer – Kalamazoo Operations, White Pigeon Paper, Graphic Packaging International, and Zoetis LLC.

Tom Fletcher, Senior Manager, Utilities for Pfizer said, “Pfizer Kalamazoo has chosen to join ABATE to keep Michigan manufacturing competitive in a challenging global environment and to ensure that our interests are represented for Michigan’s energy legislation and policy issues.”

More information on ABATE is available at www.abate-energy.org.