What the MPSC’s Recent Decision on Energy Generation Really Means

After Lansing passed pivotal energy legislation last year, the non-partisan Michigan Public Service Commission (MPSC) was tasked with implementing various policy changes established by the new law. This new energy law authorizes the MPSC to fairly, transparently, and reasonably implement the law with the input of the public and all stakeholders involved.

The MPSC announced last month their decision to require all energy providers (in-state and out-of-state providers) to demonstrate enough generation capacity to meet the needs of their Michigan customers for a minimum of four years beyond each year they are contracted to provide service.

Let’s Break it Down

The MPSC’s decision on capacity requirements is two-fold, providing flexibility for energy providers while protecting reliability for consumers:

Misguided Opposition from Lansing

While the MSPC’s establishment of these clearly defined capacity requirements is a logical step in implementing last year’s energy law, some in Lansing are protesting, making misleading claims that it does not follow the letter of the law and that the regulatory body is overstepping its authority in imposing such a requirement.

The MPSC’s decision to include what’s known as a “local clearing requirement” is not only authorized by last year’s energy law, but it is true to the spirit of Michigan’s new plan for reliable, affordable, and sustainable energy development.

Part of a Michigan-First Energy Policy

As MPSC Chair Sally Talberg explains, the “law explicitly defines the local clearing requirement and the Commission’s role in setting [it] with technical assistance from MISO [the regional operator overseeing the Midwest’s entire energy grid]. The Commission considered each and every provision in the law and how these provisions work together as a cohesive framework. For these and other reasons stated in today’s order, the Commission believes its decision is expressly authorized by the law.”

Holding all energy providers responsible for meeting the capacity needs of their customers promotes in-state energy generation — an approach that is both more reliable and more efficient than transporting energy into Michigan from out of state — both of which are fundamental goals of last year’s energy law. If alternative energy suppliers cannot meet the new capacity and energy generation requirements, they can always purchase capacity from local energy providers at rates determined by the MPSC.

While debate over how to best enact our new energy law is a normal part of the legislative and regulatory process, this latest attempt to undermine the MPSC’s authority is simply misguided. Some may try to derail the progress the MPSC is making, but AMP applauds their decision to require the energy we use to be produced by Michiganders for Michiganders. It will help keep energy reliable for all Michigan homes and businesses — regardless of where they purchase their electricity — and it will help strengthen Michigan’s economy in the process.