Michigan Committee Approves Bill Requiring Retail Suppliers To Make Forward Showing of Local Capacity Compliance, Allows Nonbypassable Capacity Charge

The Michigan Senate Energy and Technology Committee in a 6-1 vote reported favorably SB 437, which would generally impose capacity requirements on retail suppliers

Certain provisions related to retail suppliers' forward capacity showing were modified in the bill as reported out of committee.

Specifically, SB 437 would now require that by June 1, 2018, retail suppliers would be required to meet 50% of their local capacity requirement, and that by October 1, 2018, retail suppliers would be required to meet 90% of their local capacity requirement

While a potential MISO three-year forward capacity auction for retail choice states could be used to meet such requirements (provided the auction's local clearing requirements conform to the legislation), the legislation's requirements would take effect regardless of whether any such MISO auction is implemented

Capacity penalty payments (at the Cost of New Entry) could not be used by retail suppliers to meet SB 437's local requirements

If MISO determines that Michigan is not meeting its local capacity requirements, retail suppliers would be required to make a showing of 100% of their local capacity needs, for a period of three years

Other provisions of the bill include allowing a nonbypassable capacity charge on customers leaving the utility, and maintaining the 10% choice cap (see prior story for more)