Consumers Energy Assures Customers of Reliable Electric Supply Despite Forecasted Lower Peninsula Energy Shortfall

Need for a Michigan-first Energy Plan

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Feb 17, 2015, 04:15 ET

JACKSON, Mich., Feb. 17, 2015 /PRNewswire/ -- Consumers Energy assured its customers it has the electric power they need, despite an electric supply shortfall forecast by a federal reliability organization for Michigan's Lower Peninsula in 2016. The utility's comments were filed today in response to a Michigan Public Service Commission request for 5-year energy supply plans from electric providers.

"Consumers Energy customers can be assured that we've got their back and will continue to provide them the reliable and affordable power they need," said Tim Sparks, Consumers Energy's vice president for energy supply. "We have a sound, long-term strategy to take care of our customers. That includes adding the Jackson Gas Plant to our generating fleet, which the company is purchasing for about one-fourth the cost of a new plant, and ongoing customer use reductions due to energy efficiency and smart energy programs. With these investments, our typical residential customer's electric bill will remain at about $3 per day and below the U.S. average," said Sparks.

Today's filing notes that the Midcontinent Independent System Operator (MISO), which oversees electric grid reliability, is forecasting a 3,000-megawatt electric supply shortfall in the Lower Peninsula by 2016. The shortfall is driven by multiple power plant retirements in the Midwest in response to current U.S. EPA air quality regulations. They include 7 Consumers Energy coal units being retired by April 2016.

"With Consumers Energy projecting sufficient power supplies over the five-year planning period to meet the needs of its full service utility customers, the reliability and price impacts of these imminent plant retirements may fall most heavily on several hundred retail open access customers who have elected to receive their generation supplies from retail energy marketers," Sparks said.

These marketers traditionally rely on purchases from the MISO electricity market to meet the power needs of their customers. If they are unable to secure electric supplies from the market because of the shortfall, or offer competitive rates due to sharp increases in market prices, customers participating in the retail open access program may seek to return to the reliability and price stability of full utility service. Retail open access customers are currently permitted to return to regulated utility service with minimal notice.

"This rapid influx of these customers would present significant reliability, price and supply planning challenges for our company," Sparks said. "The dramatic changes we're seeing in the energy landscape point to the need for Michigan to take control of its energy future and to implement a plan that ensures all customers have reliable, affordable and clean energy."

Consumers Energy is committed to working with lawmakers and other stakeholders on a Michigan-first energy plan that will support the construction of a new generation of clean power plants and continued investment in technology and energy efficiency programs that reduce electricity demand and help customers lower their bills.

Consumers Energy, Michigan's largest utility, is the principal subsidiary of CMS Energy (NYSE: CMS), providing natural gas and electricity to 6.6 million of the state's 10 million residents in all 68 Lower Peninsula counties.

This news release contains "forward-looking statements" as defined in Rule 3b-6 of the Securities Exchange Act of 1934, Rule 175 of the Securities Act of 1933, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in Consumers Energy's Securities and Exchange Commission filings. Forward-looking statements should be read in conjunction with "FORWARD-LOOKING STATEMENTS AND INFORMATION" and "RISK FACTORS" sections of Consumers Energy's Form 10-K each for the year ended December 31, 2014.

Consumers Energy's "FORWARD-LOOKING STATEMENTS AND INFORMATION" and "RISK FACTORS" sections are incorporated herein by reference and discuss important factors that could cause Consumers Energy's results to differ materially from those anticipated in such statements.

For more information about Consumers Energy, go to www.ConsumersEnergy.com.

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SOURCE Consumers Energy