Michigan PSC Cites "Concern" Over Assuring Resource Adequacy in Customer Choice Environment

In its annual report on retail open access electricity service (click here for related story today), the PSC expressed "concern" over assuring resource adequacy in a retail choice environment.

While the PSC did not have any legislative "recommendations", the PSC did highlight the following resource adequacy concerns given the nature of retail choice:

"The Commission does not have recommendations for specific legislation at this time. Notwithstanding, the Commission is compelled to highlight a concern related in part to the electric choice program. Given the Commission's mission to ensure reliable energy at reasonable rates and to grow Michigan's economy, the Commission attempts to monitor the plans of regulated electric utilities and AESs to meet their electricity capacity needs in the coming years. However, due to the information that is supplied (or lack thereof), it has been difficult to develop a holistic supply outlook for the state and ensure that resources are in place over the long term to maintain reliability in a cost-effective manner and ensure equitable distribution of associated costs. This is critical because the state will be facing a considerable number of power plant retirements beginning in 2016 due to environmental regulations and other factors. Michigan's Lower Peninsula has a projected capacity shortfall, as identified by the Midcontinent Independent System Operator (MISO)," the PSC said.

"As it relates to electric choice, the Commission found in its most recent assessment, 'there appears to be a gap in the planning and procurement of adequate resources for the long term for customers served under the customer choice program.' The Commission is not recommending specific legislation but reiterates the urgency and importance of this issue in Michigan to the overall reliability and affordability of electricity supplies," the PSC said.

"In addition, as electric choice issues are considered, the Commission recommends that the Legislature take into account the recent reliability experiences in the Upper Peninsula stemming in part from specific provisions in PA 286," the PSC said.