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Michigan PSC Sets Capacity Charge Applicable To Retail Suppliers Not Showing Adequate Forward Capacity

November 22, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Michigan PSC has set the amount for the state reliability mechanism (SRM) capacity charge that customers of alternative retail electric suppliers shall pay if their supplier fails to demonstrate that it has enough capacity into the future, or elects not to arrange generating capacity to meet the applicable requirements

The Commission ruled today that, starting on June 1, 2018, Consumers Energy Co. (Case No. U-18239) can implement a capacity charge of $109,714/MW-year, or $300.59/MW-day, for full service customers, and DTE Electric Co. (Case No. U-18248) can implement a capacity charge of $97,527/MW-year, or $267.20/MW-day.

These charges for full service customers will also be paid by customers of alternative electric suppliers who do not make a showing of adequate capacity, with the capacity charge applicable no earlier than June 1, 2018

The PSC ruled that the capacity charge for suppliers not showing adequate capacity shall be collected by the utility directly from the customers of such supplier, and the capacity charge will not be assessed to the retail supplier itself

The PSC also rejected a proposal that would have allowed suppliers showing that they had arranged for certain amounts of forward capacity (but not enough to cover their entire forecasted load) to designate such partial capacity to certain customers, in order for those specific customers to avoid the capacity charge. Instead, the PSC ruled that, for suppliers showing a partial demonstration of their capacity needs, the capacity charge shall be applied to all of the supplier's customers on a pro rata basis

The capacity charges must be evaluated by the Commission at least once per year.

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