JACKSON – Small, independently owned power plants across Michigan are locked in a battle with Jackson-based Consumers Energy over what may very well decide their fate.
In a rate case before the Michigan Public Service Commission that’s expected to be settled in mid July, state regulators are setting a new course for how these independently owned facilities — most of which generate electricity using renewable hydroelectric and landfill gas power — are compensated by utilities for the power they produce.
Under the federal Public Utility Regulatory Policies Act (PURPA) of 1978, utilities are required to pay the “avoided cost” for the energy, or a rate comparable to what Consumers would pay by owning the generation.
A methodology to set the costs was approved in late May but the final prices are still undetermined. The changes are the first PURPA update in Michigan in two decades, and come as several contracts are set to expire. There are nearly 50 facilities across the state under avoided cost contracts with utilities.
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