Clean Energy Advocates Celebrate Agreement in Consumers Energy Rate Case

UPDATE: The Michigan Public Service Commission approved the settlement on January 19, 2023.

Settlement includes an increased allowance for distributed clean energy and significant energy equity commitments

Consumers Energy, an investor-owned utility with over 6 million customers statewide, today filed a settlement agreement with the Michigan Public Service Commission (MPSC) in its 2022 rate case. As part of negotiations on the settlement, clean energy advocates Vote Solar, the Ecology Center, and the Environmental Law and Policy Center obtained greater commitments from Consumers to renewable power and to equity for all Michiganders.

A hallmark of the agreement is a commitment by Consumers Energy to double the distributed generation limit from two percent to four percent for the company’s service territory. Michigan’s cap on distributed generation — one of the most restrictive in the country — has been widely criticized by activists, the solar industry, and lawmakers on both sides of the political aisle since it became law in 2008. 

“Raising the cap on distributed resource generation has been a long time coming, and we’re thrilled to have this increase included in the agreement,” says Will Kenworthy, Midwest Regulatory Director at Vote Solar. “Legislation to permanently eliminate the cap and accelerate solar growth for all Michiganders is still the ideal outcome, and our sights remain set on making it a reality. That said, this voluntary increase is a big step forward and an indication of more progress to come.” 

In addition to the increase on distributed generation, Consumers agrees to increase the outflow credit, or the rate provided to distributed generation customers who provide energy to the grid. By including transmission costs in the outflow credit, where they were previously subtracted, rooftop solar customers will be more fairly compensated for the energy they produce but do not use. 

Another noteworthy inclusion is an agreement by Consumers to include a community solar pilot proposal when it files its Voluntary Green Pricing proposal before October of next year. While all Michigan utilities are required to offer Voluntary Green Pricing programs to their customers, eligibility is largely determined by the utility’s offerings. This often leaves renters, low-income households, and those in non-traditional housing locked out of participation. 

“Community solar can unlock the economic and environmental benefits of solar power for those who might otherwise face barriers to clean energy access,” says Charles Griffith, Climate and Energy Program Director at the Ecology Center. “It has a vital role to play in closing disparities in clean energy adoption, and we’re excited to see Consumers Energy recognize that.” 

The settlement also includes meaningful provisions on energy equity. Among them is a pledge by Consumers to incorporate equity into its distribution grid planning, including by conducting an analysis of energy reliability in underserved communities. The company further agrees to improve its stakeholder outreach processes, providing ratepayers with opportunities to engage on issues that impact them, provide input, and learn about programs designed to assist with lowering energy bills. 

“We are very pleased that Consumers has taken a significant step forward in centering frontline communities in its planning processes. The analysis Consumers pledged to conduct will shed light on current inequitable service and hosting capability,” says Daniel Abrams, an associate attorney at ELPC,  “The next step is fixing these issues with an increased focus on investment in these communities.”  

The settlement also includes approval of Consumers’ proposed new EV program offerings which will include transitioning its residential PowerMIDrive pilot to a permanent program, as well as higher rebate amounts and additional options to facilitate charging for low-income customers and residents at multi-family housing.  The settlement adds the option of providing rebates for new curbside charging installations in addition to charging hubs that would be built near multi-family housing facilities as part of a new pilot program offering.

“With more and more EVs coming on the market, we need to ensure that charging opportunities are available to everyone that wants to drive electric,” added Griffith.  This will ensure that we expand access to the benefits of EVs–such as lower fueling costs and cleaner air–for all communities.”  

The settlement is now subject to approval by the MPSC. 

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