Coal Plant Closures

The Michigan Public Service Commission has approved an electric utility's selection of a North Carolina firm to purchase and dismantle two of the utility's coal-fired generating facilities, both of which have already ceased commercial operation.

The utility, Consumers Energy Company, reported that it had shut down the two stations in April of 2016 and thereafter sought to divest itself of the assets. The two plants are the B.C. Cobb and J.R. Whiting facilities. Consumers Energy said that Cobb, built in 1948, has two generating units, while Whiting, constructed in 1952, has three generating units.

The utility informed the commission that it had been able to negotiate an agreement with the Forsite development group, under which two Forsite subsidiaries will demolish the power plants and then remediate the sites. Once the environmental abatement is complete, Forsite will be entitled to redevelop the sites.

The utility pegged the cost of the plan at a little more than $62.5 million, which, pursuant to settlement, it may recover via its depreciation rates. More specifically, Consumers Energy will charge its divestment costs to the depreciation reserve for the company's remaining steam plants, with the divestment costs taken into account when calculating its depreciation rates in the company's next depreciation case.

The commission concurred with the utility that divestiture of the facilities will not affect the company's ability to provide safe, reliable, and adequate energy services in Michigan. (Case No. U-18252)