Consumers Energy Seeks to Reinstate Electric Choice Incentive Mechanism if Michigan Choice Cap Raised

June 14, 2011
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Consumers Energy is seeking to reinstate the Electric Choice Incentive Mechanism should the Michigan legislature raise the electric choice cap above 10%.

The request is part of a newly filed rate case (U-16794). The Choice Incentive Mechanism was terminated at Consumers under a prior rate case.

"An increase in the amount of Retail Open Access sales would result in a significant loss of revenue to Consumers Energy. Accordingly, Consumers Energy requests that, in the event the Michigan Legislature increases the existing 10% cap on Retail Open Access sales prior to the issuance of a final order in this case, the Commission reinstate the Electric Choice Incentive Mechanism as approved in Case No. U-15645 with modifications," Consumers said.

"Consumers Energy believes that if the 10% cap were increased by the Legislature, a reconciliation mechanism would be essential to maintaining the financial health of Consumers Energy," Consumers added.

The modifications to the Choice Incentive Mechanism that Consumers is proposing are the removal of the 5% deadband and 10% incentive adjustment.

Consumers sought rate relief based on a negative $46 million impact from increased retail open access sales versus the baseline used in its most recent rate case. Approximately 804 MW of non-coincident customer load is currently on retail open access, and is expected to continue at a similar level through the test year period. The annual energy sales of active retail open access load are expected to be 3,995 GWh, assuming no change in the statutory choice cap.

Also of interest to retail suppliers is that Consumers, in the rate case, is seeking to modify the Meter Data Management Agent (MDMA) requirements and functions. The MDMA is the entity responsible for providing retail open access customer load and generation values to the Midwest ISO market.

Presently, Consumers acts on behalf of the retail supplier in providing the supplier's customers' metered load data to the Midwest ISO. A proposed tariff change will provide that the retail supplier or entity serving as the MDMA for the supplier shall report the load and generation values to the MISO, and shall supply the energy usage reported to the MISO to Consumers upon request.

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