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Michigan Utility Deal Could Trigger 584 MW of New Solar Capacity

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Michigan ratepayers stand to benefit significantly from a proposed settlement that will find the state utility finally paying the true “avoided cost” of buying power from solar developers, which will in turn allow those developers to build 584 MW of new capacity over the next four years.

For more than a year, writes [1] western Michigan business news outlet MiBiz, Consumers Energy has been wrangling with solar developers frustrated by the utility’s reluctance to pay the full cost it would otherwise incur to generate electricity with a centralized facility like a natural gas plant.

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“Multiple developers have challenged the amount Consumers is required to pay them under the federal Public Utility Regulatory Policy Act,” explains MiBiz, arguing that pitching the avoided cost rates too low had “made their projects uneconomic to build.”

Consumers had been playing hardball, upping the ante by disputing whether the added capacity was really needed in the first place.

Those tactics left the Michigan solar industry disgruntled enough that national developers like Cypress Creek Renewables, as well as the Solar Energy Industries Association, have been refusing to support Consumers’ proposal for a Clean Energy Plan that would add 6,000 megawatts of solar across the system by 2040.

The new agreement commits Consumers to make “commercially reasonable efforts” to interconnect 584 MW of solar by September 1, 2023.