State Orders Retail Suppliers to Report Ability to Adequately Meet Customers' Electric Requirements Three-Years Out

The Michigan PSC has ordered electric utilities and alternative electric suppliers to submit a self-assessment of their ability to meet their customers' expected electric requirements during the three-year period of 2014 through 2016.

The three-year timeframe is a departure from the PSC's prior orders, which have required a one-year assessment of a supplier's ability to adequately meet its customers' electric requirements.

The PSC said that the three-year horizon was chosen, "due to the expected retirement of older generating units in the state, as a result of new air quality requirements."

However, Matters notes that the order was issued on the same day that Michigan Gov. Rick Snyder made reliability and resource adequacy a top energy goal, going so far as to make note of the stability provided to utilities and investors in the absence of full retail choice (click here for related story today).

"Each assessment should consider the load-serving entity's expected peak demand, the resources available to meet peak demand, and the amount of expected reserves. Each assessment should justify its expected reserve margin in light of its circumstances, including the reliability characteristics of its resource base and the characteristics and diversities of the customer load. Each assessment should also distinguish between in-state and out-of-state generation resources and analyze how its generation is expected to affect service to its customers," the PSC said.

"Further, each assessment should identify all resources designated to meet reserve requirements – including generation units that are owned by the load-serving entity or otherwise committed to serve the load, firm contract capacity supported by commitments of designated unit or system resources, and demand response or load curtailment measures – in sufficient detail to verify that no resource is being credited more than once toward the planning requirements of one or more load-serving entities," the PSC said.

Case No. U-17523