Dive Brief:
- Consumers Energy has filed to increase rates in Michigan, citing the cost to comply with environmental regulations and maintain its generation and distribution assets.
- The utility will shutter seven small coal plants and plans to purchase a 540-MW combined cycle facility to offset a generation shortfall. The company says it needs to raise rates over $160 million a year to continue operating its five largest coal plants totalling 1,975 MW of generation, Platts reports.
- The company said it faces a $163 million revenue shortfall in 2016 and 2017, and an $78 million for 2018.
Dive Insight:
Consumers Energy filed a rate request with the Michigan Public Service Commission on Dec. 5, explaining it faces an annual jurisdictional electric revenue deficiency of approximately $166 million for the year ending May 31, 2016. That need is exclusive of the company’s purchase of a 540-MW gas plant in Jackson, and is reduced down to $163 million by the retirement of its "Classic 7" coal units.
The utility is purchasing the Jackson facility to partially offset the projected 956 MW of capacity shortfall resulting from retirement of the coal facilities.
The company also cited ongoing investments in electric utility generation and distribution assets "to comply with environmental and legal requirements," along with investments in electric utility generation and distribution assets, behind the rate increase.
