Regulatory Certainty Could Help Stabilize Michigan’s Market

By Frank Andorka, Senior Correspondent

Stability and certainty. Those two elements are always critical to building and expanding a solar industry. And a third element is supporting the Public Utility Regulatory Policies Act (or PURPA, as it is most often known in the solar industry.

Well, late last week Michigan decided to combine all three elements in their Public Service Commission (MPSC) finalized the rates and standard contract terms for Consumers Energy, one of Michigan’s biggest investor-owned utilities. In the ruling, they set the rates the utility must pay for energy and capacity from solar energy facilities and other independent power producers under PURPA.

Now that they know what rates they’ll be receiving, the ruling is expected to promote more investment in solar energy in the state, which has fallen well behind other Midwest states like Illinois and Minnesota when it comes to solar development.

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“The MPSC’s ruling provides much-needed certainty in the Michigan solar market, which has experienced delayed project development and a lack of substantial solar industry investment,” said Sean Gallagher, vice president for state affairs for the Solar Energy Industries Association. “With these rates in place, Consumers Energy can begin investing in cost-effective solar projects to the benefit of its customers. However, there is still more work to do, and how the MPSC rules on Consumers’ Integrated Resource Plan will play a big role in determining the future of clean energy in Michigan.”

With 118 megawatts (MW) installed, enough solar energy to power 18,500 homes, Michigan ranks 33rd in the country for installed solar capacity. Today’s decision paves the way for a dramatic increase in installed solar capacity in Michigan. Michigan’s solar market is forecast to add 605 MW of solar over the next five years, a 347 percent growth rate, the 5th largest percentage growth of any state. These forecasts could grow substantially, depending on the MPSC’s ruling on Consumers Energy’s IRP.

The MPSC originally determined Consumers’ avoided cost rates in an order issued last November, but was reviewing additional feedback provided by the solar industry, Consumers Energy and other stakeholders. Under federal law, these costs must be at or below the cost the utility would pay to buy power on the market or generate from its own portfolio. The MPSC also ruled that it will revisit a range of related issues in Consumers’ pending Integrated Resource Plan (IRP) proceeding that will be concluded sometime next year.

Michigan Utility Under Fire For Alleged PURPA Violations

By Frank Andorka, Senior Correspondent

What Happened:DTE Energy is in the news again, and it is yet again not for a good reason. Greenwood Solar has filed a complaint against the utility alleging that it is not negotiating to buy their electricity in good faith as is required under the Public Utility Regulatory Policies Act of 1978.

Under PURPA, utilities are legally required to buy power from independent power producers (IPP) if it is below their cost of generation from other sources, also known as “avoided costs”.

Congress passed PURPA at the height of the 1978-1979 oil crisis, when Western nations like the United States tried to wean themselves off fossil fuels to counter a move by the Organization of the Petroleum Exporting Countries (OPEC) to raise oil prices significantly.

The Michigan utility has until May 29 to respond to last week’s complaint. The first prehearing will be held on June 5.

Is the image of the sun setting on a utility pole too heavy handed? I worry it’s a little heavy handed.

SolarWakeup’s View: As I was doing research for my story on DTE’s $1 billion natural-gas plant boondoggle, I happened across an interesting note on the Michigan Public Service Commission’s website: The Michigan utility has had a complaint filed against it by a solar company saying DTE is not negotiating in good faith under the Public Utility Regulatory Policies Act of 1978, or PURPA.

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Under PURPA, utilities are legally required to buy power from independent power producers (IPP) if it is below their cost of generation from other sources, also known as “avoided costs”. Congress passed PURPA at the height of the 1978-1979 oil crisis, when Western nations like the United States tried to wean themselves off fossil fuels to counter a move by the Organization of the Petroleum Exporting Countries (OPEC) to raise oil prices significantly.

In its complaint, Greenwood Solar alleges that:

DTE’s refusal to enter substantive negotiations of an agreement for purchase of capacity and energy violates Greenwood Solar’s rights under PURPA.

DTE can’t unilaterally refuse to purchase capacity offered by Greenwood Solar.

DTE’s failure to engage in substantive negotiations of an agreement for purchase of capacity and energy violates Greenwood Solar’s rights Under DTE’s Rider No. 6.

“DTE is aggressively blocking solar development at every scale in order to justify its proposal to build a giant gas plant in St. Clair County,” Becky Stanfield, senior director of Western States for solar advocacy group Vote Solar, told SolarWakeup. “We don’t think what they’re doing is consistent with the law, and we’re very much hoping the Commission doesn’t let the company get away with it.”

The Michigan utility has until May 29 to respond to Greenwood’s complaint, and the first hearing on the matter will take place June 5.

Read the whole complaint here:

U-20156 Complaint of Greenwood Solar Against DTE

More:

Decision On Fate Of $1 Billion DTE Natural Gas Plant Looms

Coalition Delivers 10,000 Michigander Letters Calling on DTE to Drop Its Gas Plan and Choose Clean Energy (Vote Solar)

Power Up Michigan

Michigan Public Service Commission

News Roundtable: Presidential Election 2016 and What Will Trump Do? (Podcast)

The marathon Presidential election is over and Donald Trump is the next President. Join the podcast as Yann Brandt and Frank Andorka try to make some sense of what the election means to solar and how the industry did on the State level votes. Coverage includes what Trump’s moves could be on energy and votes in Arizona, Nevada and Florida. This is part 2 of 2.