Retail Energy Buyer

Subscribe to the free weekly newsletter written just for retail energy buyers

Shuttering of Seven Michigan Coal Plants to Save Ratepayers $38M

April 21, 2016 By Cheryl Kaften

Consumers Energy’s 1.8 million electricity customers across the state of Michigan will see their rates drop by $38 million as a result of the utility’s shutdown on April 15 of its Classic Seven oldest coal-fired generating plants.

According to the company, which is a subsidiary of CMS Energy, the plants have been shuttered for two reasons: coal generation costs are now higher than grid prices, spurred by record low natural gas prices; and the federal government is pushing for cleaner emissions.

“While we honor the 60 years of service by the Classic Seven, Michigan will now become a little greener with improvements in air quality and reduced water usage. In addition, Consumers Energy residential and business customers can expect more green in their wallets,” commented David Mengebier, the company’s senior vice president of Governmental and Regulatory Affairs.

Mengebier noted that the typical residential customer for Consumers Energy pays a total bill that’s about 15 percent below the U.S. average. The removal of $38 million due to the Classic Seven retirements drops an average residential bill by 1 percent – or nearly $8 annually.

The plants, which have provided Michigan with up to 950 megawatts (MW) of electricity for more than 75 years, include:

  • Two generating units at the B.C. Cobb Plant in Muskego;
  • Three generating units at the J.R. Whiting Plant in and near Luna Pier; and
  • Two generating units at the Karn-Weadock Plant near Bay City.

“Providing customers with affordable energy costs is one of our key principles. That’s helping Michigan companies create jobs, expand their operations and open new facilities here,” said Mengebier. “It’s also vitally important that as we close coal plants, we ensure future electric reliability for Michigan and our customers. That’s why it’s critical that the Michigan legislature act to update our energy law and ensure that we have reliable, affordable and sustainable power supply going forward.”

According to the U.S. Energy Information Administration, nearly 18 gigawatts (GW) of electric generating capacity was retired in 2015 – and more than 80 percent of the retired capacity was conventional steam coal.

 

Leave a reply


*