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MPSC Approves Integrated Plan for Upper Peninsula Utilities
Michigan Ag Connection - 02/07/2020

The Michigan Public Service Commission approved settlement agreements involving the integrated resource plans (IRP) for two electric utilities in Michigan's Upper Peninsula, marking the utilities' long-range strategies for meeting customer electricity needs.

The MPSC approved a settlement agreement between Upper Peninsula Power Co. (UPPCO) and parties including the Michigan Department of Attorney General, MPSC Staff, Citizens Against Rate Excess, and Circle Power LLC on UPPCO's IRP. The Association of Businesses Advocating Tariff Equity and Verso Corporation filed statements of non-objection.

Under the agreement, UPPCO will:

- Remove from its IRP, pending further study and analysis, plans for a natural gas reciprocating internal combustion engine the company had proposed to build to replace a combustion turbine that failed catastrophically in 2018.

- Increase its energy waste reduction target to 1.65 percent for 2020 and 1.75 percent for 2021, up from the 1.5 percent proposed by UPPCO. Energy waste reduction helps lower costs through reductions in energy use; it's estimated that every $1 spent on energy waste reduction saves around $4 in avoided energy costs.

- Proceed with a long-term, 125-megawatt power purchase agreement on a proposed solar facility, with a financial compensation mechanism below the maximum allowed by law.

- Move ahead on its proposal to allow its Hoist and McClure hydroelectric generating facilities to operate directly in the wholesale power market, which will increase UPPCO's capacity credits with the Midcontinent Independent System Operator, the regional transmission organization. This move will increase the reported capacity of the two units by a combined 7.6 MW, benefiting customers in the form of avoided capacity cost purchases in the future.

- File a new IRP by Dec. 6, 2024.

In addition, the MPSC approved a settlement agreement reached between Northern States Power Co. of Wisconsin (NSP) and MPSC Staff (Case No. U-20599). NSP's IRP service area, which includes Wisconsin, the Dakotas and Minnesota, and the company's IRP is also filed in Minnesota.

Under the agreement, NSP agrees to increase its energy waste reduction goals to 1.5% by 2021, continue evaluating demand response for Michigan customers and engage in the MPSC's MI Power Grid initiative to identify how NSP can better align its IRP process with its distribution planning process.

NSP also agrees in its next IRP proceeding to provide a summary that includes specific impacts to its Michigan service territory; conduct stakeholder engagement sessions that are within reasonable driving distance so Michigan customers may participate; evaluate new modeling software, and file its next IRP within 5 years, in coordination with Minnesota.

IRPs are electric utilities' long-range plans for meeting customer needs for the next 5, 10 and 15 years. IRPs are required under Michigan's 2016 energy laws to ensure a transparent and holistic view of electricity options that consider supply diversity, reliability, costs, the environment and other factors.

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