Michigan, MISO push advance planning to fix looming state generation shortfall
Michigan has struggled with its partially-deregulated utility market for years—its 10% cap on choice customers has made it difficult for DTE and Consumers to assess their capacity needs when potential price spikes could cause customers to return to the utility.
In June of this year, MISO warned of potential generation shortfalls as soon as 2018 due to retirement of older coal-fired generators in the state’s lower peninsula. Its survey of generators forecasted a 300 MW shortfall by June of next year, a number that could double by 2021.
But state lawmakers hope this solution will smooth such difficulties. Gov. Rick Snyder said the collaboration will hopefully help meet the state’s power demands while keeping prices low.
“This process will produce real solutions to a serious problem, and shows the positive outcomes that are possible when there is a spirit of partnership between the state and MISO,” Snyder said in a statement. “This will allow our state legislature to focus on improvements to existing laws.”
Using a “State Compensation Mechanism” for procuring electrical resources, the Michigan Public Service Commission would use a contested proceeding to set a capacity charge three years in advance. An alternative electric supplier would then have an opportunity to find other capacity—”presumably at a lower price,” the statement added—or pay that charge to the utility.