State regulators are requiring Consumers Energy Co. to expand a solar-energy program as part of a renewable-energy plan for the utility. On May 10, the Michigan Public Service Commission conditionally approved an amended renewable-energy plan for Jackson-based Consumers but did not go along with the utility’s plans to cap its pilot solar program. Under that program, which Consumers began in 2009, the utility was to buy a total of 2 megawatts of energy from customers who installed solar panels on their property.
The utility reached the program’s 2-megawatt limit within two weeks of its start and did not plan to expand it further. The company has said solar is the most expensive component of a renewable portfolio in which costs are ultimately passed on to customers. However, solar industry officials and advocates strongly objected to Consumers’ plans to cap its solar investment and said it would inhibit investment and job creation.
The commission directed the utility to design an expansion of the program that consists of at least 2 megawatts of additional solar generation divided between small and large systems. The program must add no more than $20 million to the total cost of compliance and limits the price that Consumers offers those who produce the solar power to between 20 and 26 cents a kilowatt-hour.
The commission said that while it views an expanded Consumers solar program as “a step forward, the commission nevertheless understands that the ‘boom and bust’ cycle of some of the solar incentive programs can be detrimental to a developing solar industry. The commission directed its staff and Consumers Energy to work together to develop a solar incentive program that can promote steady growth of solar installations.
Overall, Consumers’ new renewable-energy plan, which continues to have the majority of its renewable supply coming from wind, includes lower-than-anticipated costs to move toward a state requirement that 10 percent of its power come from renewable sources by 2015. Residential customers will see a yet-to-be determined reduction in a monthly surcharge on their bills beginning in September, the commission said in a news release.
Brad Klein is a staff attorney with the Chicago-based Environmental Law & Policy Center, a Midwest environmental advocacy organization that was a formal party in the case. He said the center is “pleased that the commission recognizes that a diverse renewable-energy supply can help encourage private investment in renewable energy and help accelerate the economic recovery in Michigan. “The commission has laid out a road map for long-term, consistent and steady growth for solar.” He said some of the details in the commission’s order, such as the range of prices that would be offered to customers that install solar, are a concern and may need to be revisited.
Source: Crain’s Detroit Business News