Michigan utility doubles distributed generation cap


Consumers Energy, an investor-owned utility serving over 6 million customers in Michigan, filed a settlement agreement with the Michigan Public Service Commission (MPSC) in its 2022 rate case. The utility now awaits MPSC’s approval on the settlement agreement.

Under the settlement, which was arrived at in late December, Consumers agreed to raise its cap on distributed generation in its service territory from 2% to 4% of total generation.

The cap was one of the most restrictive distributed energy ratemaking rules in the nation and had come under fire from solar advocates and environmentalists since it was placed in 2008. Members of Vote Solar, the Ecology Center, and the Environmental Law and Policy Center (ELPC) worked in tandem to advocate for this outcome.

“Raising the cap on distributed resource generation has been a long time coming, and we’re thrilled to have this increase included in the agreement,” said Will Kenworthy, Midwest regulatory director at Vote Solar.

Though the cap has been raised, a 4% limit still places a low ceiling for a rooftop solar, which is in increasingly higher demand and offers many ratepayers significant bill savings.

“Legislation to permanently eliminate the cap and accelerate solar growth for all Michiganders is still the ideal outcome, and our sights remain set on making it a reality,” said Kenworthy.

Also in the Consumers Energy settlement was the agreement to increase the value of credit for exporting excess distributed energy back to the grid, often referred to as net metering. The new includes transmission costs in the outflow credit, offering what Vote Solar called a fairer compensation rate for solar energy that homeowners produce but do not self-consume.

The settlement also added a community solar pilot proposal that will be implemented when Consumers Energy files its Voluntary Green Pricing proposal before October 2023. Vote Solar said while all Michigan utilities are required to offer Voluntary Green Pricing programs to their customers, eligibility is largely limited by the utility’s offerings. This often leaves renters, low-income households, and those in non-traditional housing locked out of participation.

“Community solar can unlock the economic and environmental benefits of solar power for those who might otherwise face barriers to clean energy access,” said Charles Griffith, climate and energy program Director, the Ecology Center. “It has a vital role to play in closing disparities in clean energy adoption.”

Consumers also pledged to incorporate equity into its distribution grid planning. It promised to conduct an analysis of energy reliability in underserved communities and to improve its stakeholder outreach processes, providing ratepayers with opportunities to engage on issues that impact them.

The analysis Consumers pledged to conduct will shed light on current inequitable service and hosting capability,” said Daniel Abrams, attorney, ELPC, “The next step is fixing these issues with an increased focus on investment in these communities.”

Finally, the settlement introduced electric vehicle rulemaking improvements and expanded programs. The utility will expand its residential PowerMIDrive pilot to a permanent program and will increase rebate amounts. The program will add more options to facilitate charging for low-income customers and residents at multi-family housing.

“With more and more EVs coming on the market, we need to ensure that charging opportunities are available to everyone that wants to drive electric,” said Griffith.  “This will ensure that we expand access to the benefits of EVs–such as lower fueling costs and cleaner air–for all communities.”

Vote Solar and its affiliates celebrated the win and look forward to an approval from the MPSC. “This voluntary increase is a big step forward and an indication of more progress to come,” said Kenworthy.

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