Michigan Ag Connection - MPSC: Power Providers Able to Meet Future Customer Needs

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MPSC: Power Providers Able to Meet Future Customer Needs
Michigan Ag Connection - 08/14/2019

All electric providers in the state have demonstrated to the Michigan Public Service Commission that they have adequate electricity supplies to meet the needs of their customers for the 2022-23 planning year.

The annual review by the MPSC ensures long-term reliability by verifying electric providers' energy supply arrangements. Each investor-owned utility, alternative electric supplier, cooperative, and municipally-owned utility is required to demonstrate to the MPSC under Public Act 341 of 2016 that they own or have contracted for sufficient capacity. The capacity must meet obligations set by the Commission or the two regional transmission organizations -- Midcontinent Independent System Operator Inc. and PJM Interconnection LLC -- in which Michigan participates. Companies in 2018 filed their four-year capacity demonstrations and the latest reports look at the fourth year ahead.

After reviewing all company filings, Commission Staff reported MISO Local Resource Zone 7, which encompasses most of the Lower Peninsula, will have enough local resources and exceed its local clearing requirement in 2022-23 by 1,300 megawatts. Staff also concluded MISO LRZs 1 and 2, which cover the Upper Peninsula, will have sufficient capacity in the same timeframe, as will the southwest corner of the state, which is in PJM territory.

The Commission accepted the Staff's capacity demonstration report, which also noted increased levels of demand response resources for the 2022-23 planning year. Demand response programs enable customers to better control their energy use during times of peak demand, such as on hot summer days, or when market prices are high.

In a related ruling, the Commission rescinded its ban on aggregators being able to bid demand response into wholesale electric markets for retail choice customers (Case No. U-20348). However, it kept in place a ban on the direct participation in wholesale markets by retail customers (individually or through aggregators) of Commission-regulated electric utilities. Aggregators can sign up customers of AESs to participate in demand response programs, which can be used to meet required electric capacity requirements of AESs in lieu of more expensive power supply options. Customers of regulated utilities can participate in a variety of demand response programs available through their utility.

The decision followed a Staff-led stakeholder process and technical conferences, the results of which were included in a Demand Response Aggregation Staff Report and Recommendations. The Commission accepted all of the staff's recommendations with several clarifications. Under Federal Energy Regulatory Commission rules, states have the authority to regulate retail electricity sales and to decide whether to authorize demand response aggregation.

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