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 September 17, 2015 - 1:41 PM EDT
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Need for a Michigan-First Energy Plan Growing More Urgent

Consumers Energy Cites State Report: 25 Coal Units Shutting Down by 2020

LANSING, Mich., Sept. 17, 2015 /PRNewswire/ -- The need for a Michigan-first energy plan to ensure reliability and protect customers is increasingly urgent in light of a new Michigan Agency for Energy report that 25 coal units in the state have or will shut down by 2020 due to age and current EPA regulations. The units include Consumers Energy's 7 oldest coal plants which are shutting down by April 15, 2016.

"With these closures, the data shows that the Lower Peninsula will see an electric capacity shortfall beginning next year," said David Mengebier, senior vice president for governmental and public affairs and chief compliance officer, in testimony today before the Michigan Senate and Technology Committee. "It's urgent that the state Legislature create policies that put Michigan – and not the federal government – in charge of our energy future."

"This shortfall is not the result of poor planning on our part. Earlier this year, Consumers Energy filed a plan with the MPSC showing we have sufficient supply and demand response programs in place to meet our customers' needs and maintain adequate reserve margins for the next five years," Mengebier said.

However, he noted that Consumers Energy is not planning for the 800 megawatts (MW) of demand that is currently taking electric service from alternative electric suppliers. To put this in perspective, 800 MW is the size of a large power plant which would take about four to five years to site, permit and build.  Under current Michigan law, some or all of these retail open access customers could return to the utility with as little as 60 days' notice.

"While Michigan's 2008 energy law has largely been a success, it has a fundamental weakness that raises significant fairness issues for many customers. Since that law was passed, a cost-shifting subsidy paid by traditional utility customers to those served by an alternate electric supplier totals more than $1 billion," Mengebier said.

Mengebier also noted that Michigan and Consumers Energy are making significant progress in improving its cost-competitiveness for business, adding that the state had the most improvement of any Midwestern state over the past year. "Our competitive rates are driving growth in Michigan," pointing to an announcement this week of a new $325 million particle board facility in Grayling by Chilean-based Arauco, creating an estimated 250 jobs.  

Meanwhile, Consumers Energy announced yesterday that it is voluntarily contracting with a new 100 megawatt Apple Blossom wind park to-be-built in Huron County. "When it makes economic sense for our customers, we will expand our renewable energy resources in Michigan," he said.

"While Consumers Energy believes the best energy policy would be to return to a fully-regulated electric market, rather than continuing with the 10 percent cap, we are supportive of the direction Senate Bill 437 takes to address the current inequities in the law today," he added.

Mengebier also testified in support of a proposed new Integrated Resource Planning process for future state energy projects, adding that an enhanced IRP process provides sufficient opportunity to advance alternative proposals.

Consumers Energy, Michigan's largest utility, is the principal subsidiary of CMS Energy (NYSE: CMS), providing natural gas and electricity to 6.6 million of the state's 10 million residents in all 68 Lower Peninsula counties.

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Source: PR Newswire (September 17, 2015 - 1:41 PM EDT)

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