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MI House Committee Discusses Capacity Shortfall

On Wednesday, February 25, the Michigan House of Representatives’ Energy Committee held a hearing regarding Michigan’s projected electricity capacity shortfall. This hearing is the first in a series of hearings the state legislature will hold around energy issues AMP is concerned about, and we will keep you updated on all the policy debates that could affect reliability and affordability, as well as Michigan’s ability to produce its own energy.

The Capacity Issue

Two factors are combining to create a possible electricity shortfall in Michigan:

The Midwest region is projected to have a capacity shortfall of 3 gigawatts next year—or enough energy to power 2.1 million households. In the near term, Michigan is the most stressed state in the region when it comes to energy capacity: 90 percent of the shortfall will occur in our state.

The coming capacity shortfall jeopardizes the affordable, reliable electricity Michigan families and businesses depend on and threatens Michigan’s economic future, which is why the legislature (and AMP) will spend more time looking at this issue going forward.

The February 25 Hearing

Consumers Energy’s Vice President for Energy Supply Operations Tim Sparks discussed how U.S. Environmental Protection Agency regulations will force the closure of nine Michigan coal plants, resulting in a loss of energy capacity equivalent to 1 million Michigan electric consumers. According to Sparks, more plant closures can be expected over the next ten years as plants continue to age and federal regulations on electric generation are finalized. Sparks also advocated for a “Michigan first” energy policy that:

 

 

Also testifying at the hearing was DTE Energy’s Vice President for Business Planning & Development Irene Dimitry. Dimitry stated that, to ensure Michigan has the power it needs, the state must address the problems with our current system of partial deregulation and develop a transparent generation planning process.

Looking Ahead

Michigan’s energy providers testified that they are taking steps to secure capacity and ensure reliability and affordability for their customers. However, it is not clear who is planning for customers served by out-of-state retail providers under deregulation. This places electric reliability and affordability at risk for all of Michigan.

Smart energy policies from Lansing are the answer to minimizing the negative impacts of the projected capacity shortfall. Above all, our state’s energy strategy must guarantee that Michigan controls its own energy future and has a comprehensive policy that ensures affordable, reliable electricity is available to all of Michigan’s hardworking families and businesses.

As always, we’ll keep you posted as the Michigan Legislature continues to address this issue—and we’ll let you know what you can do to help support smart energy policies that empower Michigan to meet its own energy needs.