Michigan Directs Electric Cooperative to Allow Customer to Take Competitive Supply

The Michigan PSC has directed Cloverland Electric Cooperative to allow MPI Acquisition, LLC to purchase electric supply from a competitive supplier in an amount which does not exceed the 10% statutory cap, but which also does not fully serve MPI Acquisition's load.

MPI, which owns and operates a paper mill, was seeking to take competitive supply for a 9 MW block of power, to be delivered to Cloverland 24 hours per day, 7 days per week, at a 100% load factor that would provide MPI, net of losses at the meter, with 78,840,000 kilowatt-hours (kWh) per year. MPI was to be Cloverland's first choice customer.

The parties agree that Cloverland's net jurisdictional sales for 2012 were 803,962,859 kWh, and that 10% of that amount is 80,396,286 kWh. The parties further agree that MPI's actual purchases from Cloverland in 2012 were 122,865,319 kWh. Thus, MPI proposed to take only a portion of its service from an alternative supplier in order to avoid violating the statutory mandate that no more than 10% of Cloverland's annual weather-adjusted retail sales may be taken as choice service.

Cloverland said that the tariff, and a special contract with MPI, did not allow a customer to take choice service for only part of its requirements

The PSC disagreed, finding the agreement to be silent on whether choice service could be taken in blocks.

"The Commission is persuaded that the Legislature did not intend to cut off such a customer from the option to use an AES simply because it is a large customer," the PSC said, and therefore, a large customer such as MPI can take choice service for that portion of load which would fit under the cap.

MPI's purchase of the 9 MW block was approved.

Case No. U-17432