Michigan is on the brink of a shift in its generation mix as its two largest utilities look to phase out coal-fired power plants and add more solar and wind over the next two decades.
By 2040, Consumers Energy Co. and DTE Energy Co. plan to retire a combined 8 GW of coal-fired resources and cut their respective carbon footprints by 90% and 80%. Goals of increasing renewables, helping customers reduce their energy use and removing coal from the generation mix are formalized in integrated resource plans, or IRPs, called for under a 2016 state energy law.
Consumers Energy in June got backing from state utility regulators for its IRP, under which the utility will retire two aging coal-fired units at the Dan E. Karn generating complex in Bay City, Mich., in 2023. The plan approved by the Public Service Commission also calls on the CMS Energy Corp. subsidiary to study the retirement timeline for two coal-fired units at the J.H. Campbell power plant in its next IRP, set to be filed in June 2021.
The utility plans to retire the two Campbell units in 2031 and a third coal-fired unit at the plant in Ottawa County, Mich., by 2040. But under its approved IRP, Consumers Energy will evaluate the potential for retiring units 1 and 2 as early as 2024.
Consumers Energy wants to add 5,000 MW of solar-powered resources to its system by 2030, and a feature of the company's plan calls for it to hold annual competitive bidding processes for adding power generation capacity, including 1,200 MW of new solar energy from 2019-2021. Consumers Energy can own up to half of all the additional capacity it acquires through those processes but must procure the remaining 50% through power purchase agreements with unaffiliated third parties.
The first request for proposals will be issued in September, according to Brandon Hofmeister, Consumers Energy's senior vice president for governmental, regulatory and public affairs.
"There's been a lot of solar development activity in Michigan, driven primarily by the implementation of [the Public Utility Regulatory Policies Act of 1978], and so we think we're going to have more than enough supply to get some really good prices for customers," Hofmeister said.
Wind also will be a part of the utility's energy mix. To help meet Michigan's 15%-by-2021 renewable portfolio standard, the company plans to build 525 MW of new wind capacity by the end of that year.
Margrethe Kearney, an attorney with the Environmental Law and Policy Center, said the 2016 law's requirement for utilities to engage in a long-term planning process likely played a key role in Consumers Energy's move away from fossil fuels. By participating in a planning process, Consumers Energy had to acknowledge both solar developers' level of interest in building projects and the cost-effectiveness of those resources, said Kearney, whose advocacy group took part in the IRP case.
"The leadership at Consumers has been really receptive to recognizing changes in energy markets and changes in the way we're going to be providing energy," Kearney said. "They made a smart decision to say this is our chance to get ahead of it, this is our chance to start thinking in a different way. I think without that IRP construct, there wouldn't have been a space for the company to have that kind of internal reflection."
DTE speeds up emissions cuts
Kearney also noted that the Environmental Law and Policy Center is reviewing and intends to file comments on DTE's plan, which the utility filed (Michigan PSC Case No. U-20471) with regulators in March. Those comments are due to the commission July 24.
For the company, which already had plans to cut CO2 emissions 80% by 2050, the IRP process showed that the utility could accelerate the emissions cut by a decade, said Irene Dimitry, vice president of business planning and development at DTE.
"Going through the process gave us even greater confidence that our strategy makes sense and greater confidence in our commitment to carbon reduction," Dimitry said.
DTE said it will retire its River Rouge, St. Clair and Trenton Channel facilities by 2022, the Belle River plant by 2030 and its Monroe facility by 2040.
The company has committed to having renewables make up at least 25% of its generation mix by 2030 and hopes to quadruple its current level of renewable energy production by the time its last coal plant retires in 2040.
One part of its plan is to expand its voluntary renewable program known as MIGreenPower. That program, which counts Ford Motor Co., General Motors Co. and the University of Michigan as participants, gives residential, commercial and industrial customers the chance to buy more clean energy.
Ford, for instance, has agreed to buy 500,000 MWh of wind power, while GM will buy 300,000 MWh of wind energy.
Depending on customer demand, the voluntary program could push DTE beyond its commitment of 25% renewable by 2030, bumping that figure up to about 30%.
"We're interested in doing more if our customers want us to go there," Dimitry said.