Consumers Energy seeks rate increase to shorten power outages

Breana Noble
The Detroit News

The average household purchasing electricity from Consumers Energy could see an increase of $7.50 on their monthly bill if the Jackson-based utility receives approval for a $272 million investment for improved reliability and cleaner energy.

The expenditures require approval from the Michigan Public Service Commission. Half falls under the CMS Energy Corp. subsidiary's five-year, $5.4 billion Electric Distribution Infrastructure Investment Plan focused on reducing the average time that customers are without power by nearly 15% from 2020 to 2025. They'll also help eliminate the use of coal as a power source by then, promote electric vehicle adoption and support economic development.

Consumers Energy is seeking approval for a $272 million investment for improved grid reliability and cleaner energy.

“The main priority of our plan is simple: fewer, shorter and less frequent power outages for our customers which requires a modernized grid,” Guy Packard, vice president of electric operations, said in a statement. “Like any tool that people use to power their lives — whether that’s a car, cell phone, an appliance or a house — the energy grid needs care and investment to work properly without interruption."

With more frequent and severe weather events, the company plans to invest roughly $1 billion annually through 2025 for tree trimming, replacing poles and wires, and upgrading substations. It also is adding smart meters, sensors and automation devices to its distribution system to gather information more easily and to be more responsive.

The rate increase would support the purchase of the Covert Generating Station in Van Buren County from Eastern Generation LLC, a company of Boston-based private equity firm ArcLight Capital Partners LLC. The gas-fired power plant with 1,176 megawatts of capacity is a part of the company's plan to replace coal-fired generation in addition to doubling its distributed generation program with more solar energy. Its long-term plan calls for 8,000 megawatt hours of capacity by 2040.

The rate change includes incentives for purchasing and installing EV chargers. Consumers Energy wants to power 1 million EVs by 2030 in its service territory covering 1.8 million business and residential electricity customers in the western and central parts of the Lower Peninsula.

The investment also would expand a proposed economic development rate to help attract and retain businesses such as manufacturing facilities for EVs and their batteries.

"We are focused on growing businesses here in Michigan," Packard said, "and want to get ahead of the global marketplace to attract and retain jobs which requires competitive electric rates for our largest job-creators.”

Demand response programs additionally would seek to reduce energy waste and financially incentivize ratepayers to use electricity when there is less demand on the grid. In that vein, Consumers Energy for last summer instituted a 50% increase in its rate during peak afternoon hours.

The company also has taken measures to assist customers struggling with their bills. It contributed $3.5 million in January to establish a percent-of-income payment program pilot for 1,500 low-income customers beginning this October.

Last winter, it contributed $1 million to nonprofits United Way of Jackson County and TrueNorth Community Services to assist customers with energy bills as well. A recent settlement for its long-term plan that also requires approval from the state energy commission would have the company donate up to $33 million for low-income ratepayers starting with $5 million this year and $2 million in additional annual increments over 14 years.

bnoble@detroitnews.com

Twitter: @BreanaCNoble