Consumers Energy Distributed Generation Energy Tariff

The Michigan Public Service Commission (PSC) announced its decision regarding Consumers Energy latest electric increase (U-20697) and the Distributed Generation (DG) tariff on December 17, 2020. Consumers Energy asked for a whopping 14% increase in residential rates but the PSC granted them only a 11.9% increase. This increase is going to really hurt a lot of people, families and small business who have suffered during this COVID-19 pandemic that caused lots off businesses to lay off workers.


In terms of the Distributed Generation tariff, the Public Service Commission granted Consumers Energy, what they gave DTE, that the Tariff (or Credit) would be the power supply component minus transmission costs. This means that new solar owners will only get a credit of about 8 cents per kWh for the extra solar electricity they export back to the grid. The old credit under Net-Metering, was pegged at the retail rate, so whatever was the retail rate for buying electricity from Consumers was also the amount of the credit for selling electricity back to Consumers, which is about 16 cents per kWh.


For those of you that already have a solar system, you are grandfathered in for 10 years from the date you installed your system.


Consumers Energy was the last major regulated utility to undergo the process with the Michigan Public Service Commssion to determine the new Distributive Generation Tariff that replaces the older Net-Metering policy that has been the law since 2008. In 2016 Michigan's Energy Law was changed and the new law required the PSC to determine the new Distributive Generation Tariff that replaces Net Metering for each utility.


This isn't great news. But GLREA was successful in two other respects.


We have been putting pressure on Consumers Energy to voluntarily raise the 1% Cap that has been in law since 2008, that limits the number of solar energy systems that Consumers Energy must connect to the grid under the Net-Metering / Distributed Generation program. Consumers Energy did agree to raise the Cap to 2% as soon as the Public Service Commission made its decision on the Distributed Generation tariff of 8 cents per kWh. One reason why Consumers Energy did this is this new DG tariff is based upon the cost of service of Consumers Energy supporting homeowners and business with solar. There is therefore no reason to limit the number of solar systems that can be connected to the grid. The PSC has stated that solar owners are paying their fair share to support the grid, so this artificial barrier is wrong and should be removed. GLREA is working to pass legislation to do this. See the other article on our work to do this.


The other major victory for GLREA, is that the Public Service Commssion agreed to do an in depth analysis of what the true 'value of solar' is. GLREA argued that the solar electricity that is put back on the grid is much more valuable to Consumers Energy and DTE, than what they say it is.


Extra solar electricity is usually sent back to the grid in July and August when the sun shines the most, the days are the longest and its hot out. This occurs at the exact time that demand for electricity is the highest because of high air conditioning use. So the more solar electricity that is sold back to Consumers Energy, means they can meet this high demand for electricity from the electricity that solar owners export back to the grid and Consumers Energy has less of a need to start up expensive 'peaker power plants.' This saves Consumers money but they don't acknowledge this.


So the Public Service Commission agreed with GLREA that an in depth 'value of solar' study is needed. This work-group project is beginning March 2021 and will be completed by October 2021.


GLREA believes that all homeowners, farmers and business should have the freedom to choose the option of installing solar to generate your own electricity if you want to. Consumers Energy is trying to take this right away. Of course Consumers says they are not trying to do this, but actions speak louder than words. Meanwhile the rates that Consumers Energy charges for electricity, keep going up every year, with the latest 11.9 % that took effect January 1, 2021. And they want more. They are asking for another 8.8% increase in March 2021 at a time when many people have lost their jobs and are struggling to get by because of COVID-19! Please become a Member of GLREA to help us with the resources to take on the utilities! Click on Become a Member this will take you to the Membership page and you can join! 

Thanks for all your help.  If you have any questions please contact John Freeman at Jfreeman13@comcast.net.

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