CUB, the Michigan Attorney General and other parties have reached a settlement with the Upper Peninsula utility Upper Michigan Energy Resources Corp. (UMERC) that the Michigan Public Service Commission (MPSC) expects will help confront the greater UP’s problem of overreliance on natural gas (U-21081).
The settlement, approved by the MPSC at its May 12 meeting, allows UMERC to move ahead with its Integrated Resource Plan (IRP), the MPSC-required filing in which the utility shows what resources it will use to serve its customers over 5-year, 10-year, 15-year and 20-year time horizons. The IRP represents “a win for customers across the UP” because it “provides valuable resource diversity” for the region, MPSC Chair Dan Scripps said at the Commission’s meeting.
The IRP recognizes the need for 100 megawatts of solar power in UMERC’s service territory, and lays out the process by which UMERC will accept competitive bids from potential developers of the solar projects that will meet this need.
That amount of new solar is an impressive expansion, especially considering that currently, solar represents less than 0.1% of energy from UMERC-owned generation sources. Natural gas, however, makes up 99.9%, meaning UMERC is heavily exposed to rising natural gas prices. As we have written about frequently, the UP as a whole is heavily reliant on natural gas (as well as related products, like propane).
Under the settlement, UMERC will also adopt an energy efficiency goal in which it must reduce energy waste by at least 1.5% of its 3-year average historical sales in 2022 and 2023 (excluding the Tilden mine and self-direct customers). The combination of solar and energy waste reduction “provides valuable diversity to the UP’s energy mix and a hedge against increasing natural gas prices,” Scripps said.
The settlement also provides that in its next IRP, UMERC must evaluate the potential for battery storage projects, and also continue to investigate the possibility of increasing energy waste reduction savings levels.
The parties to the settlement are UMERC, the AG, the MPSC staff and Savion (a company that is in the process of developing the Superior Solar Project in the UP).