Consumers Energy seeks rate hike for grid modernisation

Investor-owned utility, Consumers Energy has proposed a $272 million investment in Michigan’s electric grid in what it said is a bid to increase reliability and prepare the grid for more renewable energy.

If approved by the Michigan Public Service Commission (MPSC), the utility said rates would go up, impacting the average customer bill by about $7.50 per month.

In the second half of 2021, Consumers Energy filed a five-year, $5.4 billion Electric Distribution Infrastructure Investment Plan (EDIIP). It said the plan offered a blueprint for how it aims to strengthen and modernise the grid to accept more intermittent renewable energy and withstand the more severe weather events it is expected to experience as a consequence of climate change.

Replacing poles and wires and upgrading substations and key equipment would be top priorities, said the utility, with plans to invest roughly $1 billion annually through 2025.

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Consumers Energy is also planning to deploy smart meters, sensors and automation devices that could provide enhanced reliability and efficiency.

“Like any tool that people use to power their lives – whether that’s a car, cell phone, an appliance, or a house – the energy grid needs care and investment to work properly without interruption,” said Guy Packard, vice president of electric operations.

The impact on customer bills will not be determined until regulators reach a decision, likely in early 2023.

If the investment and upgrades are approved, Consumers Energy said it plans to reduce the average length of time that customers are without power by nearly 15% between 2020 and 2025.

Other major components in the rate increase request include:

• Making it easier for residential customers to purchase and install an electric vehicle (EV) charger and provide other EV incentives
• Expanding a proposed economic development rate which would help attract new business and encourage existing businesses to expand and grow jobs in the state
• Increasing clean energy investments, including doubling the size of its distributed generation programme, which would bring more solar energy to Michigan
• Expanding demand response programmes that help customers save money and reduce energy waste by using electricity at optimal times
• Support the purchase of the Covert Generating Station, a 1,176MW natural gas-fired power plant in Van Buren County

“To protect Michigan’s environment for future generations, we have proposed to eliminate coal as a fuel source for electricity by 2025 – but this plan will take every ounce of effort to ensure we can reach this goal while making sure electricity is more reliable and affordable for all,” added Packard.

To address customers who may be struggling to pay their bills, Consumers Energy in January contributed $3.5 million to establish a new percent-o- income payment programme pilot to help 1,500 low-income customers beginning this October.

This article was originally published on Power Grid.