PSC Recommends RE, CHP as Quick Fixes for Projected Supply Shortage

MICHIGAN -  

A new report issued by the Michigan Public Service Commission (PSC) concludes that the state must act to ensure the future reliability of its electric supply. By 2009, growing demand for electricity will require that certain measures be undertaken to keep power flowing through the state's grid, according to the report.

The PSC issued an order in October 2005 (Case No. U-14231) directing the commission's staff to begin a Capacity Need Forum (CNF) with two goals: (1) to determine whether Michigan's electric generating capacity will be adequate to meet the growing demand for electricity, especially given the likely retirement of some of the state's older generating units, and assuming additional resources are needed, what types of resources would be best for Michigan; and (2) to provide guidance to the MPSC on rate-making policies and methodologies to allow recovery of utility investment in electric generation resource additions.

The report includes the following findings:
 

 
• Peak electric power demand is projected to increase at an annual rate of about 2.1%.
   
• By 2009, unless enhancements to existing supplies are undertaken, growing demand will cause existing electric generation and transmission capacity in the Lower Peninsula to be insufficient to maintain reliability standards.
   
• Resource enhancements available could include a wide variety of near-term options, including additional demand-side options (energy efficiency improvements, load management, and demand-response programs) and generally faster-to-complete supply-side options such as transmission improvements, natural gas combustion turbines or combined cycle generators, renewable energy, and combined-heat-and-power (CHP) systems.
   
• Demand growth, coupled with the expected retirements of some of Michigan's existing base load power plants, will necessitate the addition of one or two base load plants by 2014.