MPSC rejects early termination of two Consumers Energy contracts for output biomass plants

In Michigan, the Michigan Public Service Commission rejected applications by Consumers Energy Co. for early termination of power purchase agreements (PPAs) with biomass plant operators, finding that ending the contracts prematurely was not holistically considered in the state’s electric capacity needs, posing a potential risk, and that calculated savings may be overestimated.

Consumers Energy applied in January for a third amendment to its long-running agreement with National Energy of Lincoln in northeast Michigan. The utility proposed early termination of an earlier amendment that had extended PPA for the plant’s 18 megawatts (MW) of electricity to 2027, which would result in closure of the plant on May 31, 2024.

Meanwhile, the company had applied in June 2023 for a similar early termination of its power purchase agreement with Cogeneration Michigan Associates Limited Partnership’s Cadillac Plant, from July 2028 to May 31, 2024.

The Commission rejected Consumers application for early termination of the National Energy of Lincoln PPA and a settlement agreement regarding the utility’s application for early termination of its PPA for the Cadillac plant.

Consumers proposed to replace the National Energy of Lincoln plant with a 33.6 MW solar facility and the Cadillac Plant with a 67 MW solar facility. But the Commission said that testimony indicated that, on their own, the two solar facilities would not be able to replace all the electric capacity from the biomass plants without supplemental purchases from electricity markets.

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