Dive Brief:
- CMS Energy, parent to Consumers Energy in Michigan, plans to buy an existing 540-MW natural gas-fired power plant instead of building a 700-MW plant, company officials said during a conference call with analysts.
- Buying the plant in Jackson, Michigan, will save about $535 million, which will leave cash available for other investment opportunities.
- CMS expects to invest about $15 billion over the next ten years, partly to replace 2,000 MW in expiring power purchase agreements with utility-owned power plants.
- CMS opposes efforts to increase retail choice in the state. "Around the country, the trend for deregulation is not getting any traction," John Russell, CMS president and CEO, said.
Dive Insight:
The decision to buy an existing plant seems like a win-win for the utility and ratepayers. Buying or building its own power plants will boost the company's return on equity, something that PPAs cannot do.
