In early 2025, Upper Peninsula Power Company (UPPCO) submitted two plans to the Michigan Public Service Commission (MPSC): one for how it will meet future energy needs (called an Integrated Resource Plan or IRP), and another for how it will meet renewable energy goals (called an Amended Renewable Energy Plan or AREP). These plans were reviewed together in a consolidated case (dockets U-21809/U-21811).
After months of review and negotiation, UPPCO, state regulators, and several consumer and business advocacy groups including CUB of Michigan reached a settlement agreement earlier this fall.
What’s in the Plan?
UPPCO’s approved plan includes:
- Increasing energy efficiency goals to reduce electricity use by 2.17% annually.
- Keeping existing hydroelectric and solar facilities in operation.
- Adding new solar projects through power purchase agreements (PPAs).
- Renewing a contract with a small hydroelectric facility.
- Using demand response programs to reduce peak energy use.
- Buying renewable energy credits (RECs) from a large industrial customer to help meet clean energy targets.
- Procuring future renewable energy through competitive bidding, with a goal of 50% PPAs and 50% company-owned projects.
The Commission directed UPPCO to file a new IRP within five years, a new REP within two years, and a new tariff sheet within 30 days.
How This Impacts Customers
- No New Surcharges for Renewable Energy
UPPCO confirmed it does not plan to implement a renewable energy surcharge at this time, meaning customers won’t see an added fee on their bills for renewable energy compliance. - Energy Waste Reduction (EWR) Targets Increased
UPPCO will aim to reduce energy use by 2.17% annually. This could lead to expanded energy efficiency programs for customers, helping them lower their energy bills through rebates, upgrades, or conservation incentives. - Balanced Investment in Renewable Energy
Future renewable energy projects will be split between company-owned and third-party contracts (PPAs), which can help manage costs and reduce financial risk—benefiting ratepayers. - Use of Competitive Bidding
All new energy resources must be acquired through competitive bidding, which promotes cost-effectiveness and transparency, helping keep customer rates fair. - No Immediate Inclusion of Escanaba Hydro in Rates
The removal of the Escanaba hydroelectric facilities from the rate base means customers won’t pay for those assets at this time. - Protection from Market Volatility
By maintaining existing generation and demand response programs, UPPCO can reduce reliance on volatile energy markets, helping stabilize customer costs. - Stable and Predictable Energy Planning
The approved IRP outlines how UPPCO will meet future energy needs using a mix of renewable energy, energy efficiency, and demand response. This long-term strategy helps ensure reliable service and avoids sudden changes in energy sourcing or pricing. - Future Cost Recovery Deferred
UPPCO is allowed to defer costs related to preparing this plan for future consideration in a rate case, which means any impact on rates will be reviewed and justified before implementation.
CUB’s Impact
CUB represented residential customers in settlement negotiations. Customers can expect more energy-saving programs, cleaner electricity, and no new renewable energy charges for now. The settlement aims to keep electricity reliable and affordable, with protections in place to ensure fair pricing.