Michiganregulators are launching a new effort that could shore up state utility demandresponse programs to shave electricity use at peak times, potentially reducingthe need for new power plants.
OnMarch 29, the Michigan Public Service Commission the state's largest utilities,DTE Energy Co.subsidiary DTE Electric Co.(Case No. U-17936) and CMS EnergyCorp. subsidiary ConsumersEnergy Co.
Theutilities, as well as other interested parties that can respond to thequestions, will give guidance to the PSC on whether demand response should beconsidered alongside supply-side options for power and if reviews of efforts toget customers to sign up for demand response should be part of formal ratecases. Environmental groups like the Sierra Club have often urged regulators toconsider demand response as an alternative to new generation and a way to deferbuilding power plants and lower rates.
The order builds on preexisting demand response programsthat are designed to enable utility customers to control their energy use intimes of peak demand like hot summer days. DTE offers rates that differ basedon time of use, critical peak pricing and other pricing options to shiftconsumer behavior. Consumers Energy has time-of-use rates and in 2015 performeda commercial and industrial demand response pilot. The utility plans to offer anew demand response program in 2016, according to the order.
"TheCommission remains committed to ensuring strong education efforts by utilitiesfor [demand response] options, and to appropriate consideration and analysis ofDR programs as an alternative to new generation and to help lower costs,"the PSC said in the order.
Parties must file responses to the questions by April 28.
The Michigan Environmental Council "appreciates thatthe MPSC is looking at the issue of demand response to help reduce Michigan'soverall electricity rates," the group's policy director, James Clift, saidin an email, adding that by 2017 advanced metering will be installed in nearly90% of the state's homes and businesses. But more needs to be done, he said.
"To ensure ratepayers realize the benefits of thatsubstantial investment the MPSC needs to require Michigan utilities implementrate structures that better reflect the true cost of power throughout the yearand throughout the day," Clift said. The Michigan Environmental Councilplans to advocate that a program be established that allows consumers to accessand control data on their energy use. The group also supports a requirementthat utilities place customers in the rate design program that saves them themost money.
In the same order, the PSC also told its staff
A DTE spokeswoman said the company "shares [PSC] Chairman [Sally] Talberg's concernsregarding power plant closures and the need to explore all options to ensurethat our customers continue to have safe, reliable and affordable energy,meeting the demands of today's economy."
She added that "whileDTE has a dedicated team focusing on demand response alternatives today, theChairman's concern amplifies the need to pass comprehensive energy legislationin order to plan appropriately for future demand. We welcome the open,deliberate process the Commission has suggested, and look forward to continuedcollaboration with Chairman Talberg and the Commission staff."