electric reliability

Paul Proudfoot, Director

The Electric Reliability Division was established in October of 2008, when Governor Jennifer Granholm signed Public Acts 286 and 295 into law. The purpose of these Acts is to promote the development of clean, renewable energy and conservation through energy optimization efforts. These goals will be reached by implementing standards to diversify energy resources and encourage private investment; thus creating a more secure energy future and a cleaner environment for Michigan’s citizens.

The Electric Reliability Division is made up of three sections: Energy Efficiency, Generation Certificate of Need and Renewable Energy.

• Energy Efficiency Section : Case No. U-15800 was issued on December 4, 2008 and defines energy optimization as reducing future costs of service to customers. One way to do this is by delaying construction of new electric generation facilities by finding ways to conserve energy. Energy Optimization (EO) plans are required to be filed 90 days (March 4, 2009) after U-15800 was issued by investor-owned retail rate-regulated electric utilities, rate-regulated rural electric cooperatives and natural gas providers. Municipally-owned electric utilities and member-regulated rural electric cooperative have 120 days (April 3, 2009) to file an EO plan.

The Energy Efficiency Section is also active in implementing the Michigan Saves program.

Another program in the Energy Efficiency spotlight is Advanced Metering Infrastructure (AMI). This program is expected to reduce energy demand during peak hours by tracking and monitoring customer demand, and offering incentives for usage change. Other advantages of AMI include faster detection of outages, more accurate billing, improved energy delivery and the reduction of CO 2 emissions.

• Generation Certificate of Need Section is also involved in conservation efforts by reviewing an electric utility’s plans to:
• construct a new generation facility,
• purchase or make a significant investment in an existing facility, or,
• enter into a power purchase agreement of 7 years or more; all costing $500.0 million or more with costs allocated to Michigan retail customers.

(Separate review criteria and approval standards apply to electric utilities with less than 1 million retail customers and for projects less than $500 million.)

If need is demonstrated by the utility, an order granting a Certificate of Need is issued within 270 days of the application’s filing date. The utility is then allowed to recover its expenditures through the Power Supply Cost Recovery (PSCR) process. The utility must file an annual status report, (or more frequent reports at the discretion of the MPSC), including cost and schedule information for the approved project.

• Renewable Energy Section : 2008 PA 295 requires Commission-regulated electric utilities to generate 10% of their energy portfolio through the use of renewable energy sources by the year 2015. The Act directed the Commission issue a temporary order to be used in implementing the requirements of PA 295.

The Commission approved Case No. U-15800 on December 4, 2008, containing a schedule for electric utilities to use in filing a proposed Renewable Energy Plan (REP). Filing deadlines began 90 days (March 4, 2009) after this Order for investor-owned retail rate-regulated electric utilities, rate-regulated rural electric cooperatives and alternative electric suppliers. Municipally-owned electric utilities and member-regulated rural electric cooperative both have 120 days (April 3, 2009) to file a plan with the Commission.

Renewable Energy also houses the newly created Wind Energy Resource Board. Created 60 days after the Act’s effective date, the board must issue a report within 240 days to each governmental unit located in its report and hold a public hearing. The Commission must use this information to issue a final order, designating a primary wind energy zone and others as appropriate.

Contact the Electric Reliability Division @ 517-241-9798
Fax: @ 517-241-9784