Electric Choice Supply Fees

The Michigan Public Service Commission moved to establish a statewide reliability capacity charge that customers of alternative electric suppliers (AESs) would have to pay if those suppliers do not have enough power to serve their customers’ anticipated needs.

The commission observed that the charge was required under one of Michigan’s new energy laws and applies to AESs serving customers under the state’s electric choice program. The commission commented that institution of the socalled state reliability mechanism, in concert with a prior ruling implementing a capacity demonstration requirement, had been aimed at improving resource adequacy throughout the state. The commission observed that the combined effect of the rulings is that if an AES cannot show it has sufficient capacity into the future or declines to arrange generating capacity to meet the new requirements, a capacity charge must be assessed by the local utility that also serves the area’s customers.

The commission held that, starting June 1, 2018, Consumers Energy Company may impose a capacity charge of $109,714 per megawatt (MW)-year, or $300.59 per MW-day, for full service customers. The AES capacity charge set forth for DTE Electric Company was somewhat lower, at $97,527 per MW-year, or $267.20 a MW-day. The capacity charges are to be reviewed and evaluated by the commission at least once per year. (Case Nos. U-18239, U- 18248)