Judge: Power Plant customers overcharged by company

LANSING, Mich. – The administrative law judge presiding over the case at the Federal Energy Regulatory Commission (FERC) that is examining costs to keep the Presque Isle Power Plant (PIPP) in Marquette running today issued a proposal for decision (PFD) that agrees with Michigan that the owner of the PIPP – Wisconsin Energy Corporation – massively overcharged customers for the cost of operating the plant.

In his PFD, the judge is recommending that ratepayers receive at least $17 million, plus interest, in refunds.

“We are pleased that the administrative law judge in this case is recommending what would be a substantial win for ratepayers,” said Valerie Brader, executive director of the Michigan Agency for Energy. “In its arguments, Michigan demonstrated that WEC cut a deal to get paid for imaginary improvements over a much shorter time. When the people footing the bill finally got a chance to check the math, we saw there were over $10 million in charges for improvements that were never made. We are glad the administrative law judge agrees that the amount put forward was unsupportable, and we look forward to FERC’s final decision.”

Brader also criticized the procedures of the Midwest Independent System Operator (MISO) that led to this situation, and called for the quick adoption of proposed reforms that MISO has filed at FERC.

“MISO blindly accepted numbers without reviewing their reasonableness, resulting in the state and other interested parties having to challenge the expenses through costly proceedings at FERC,” Brader said. “Michigan strongly supports proposed reforms that will let the people footing the bill put those costs to the smell test before anyone signs on the bottom line.”

A victory for Michigan at FERC would mean that U.P. electric customers will see a far smaller bill than would otherwise have resulted. The judge’s proposal for decision now goes to the FERC commissioners.

SSR payments for the PIPP were stopped as part of a deal negotiated with the State in 2015. However, Michigan has continued to litigate regarding past charges related to the PIPP, Escanaba, and White Pine SSRs in over 20 dockets at the FERC and in federal court. SSR payments are made to keep an electric generator running for reliability purposes, even when it is not economically justified.

(Information Courtesy of the Michigan Agency for Energy/Michigan Public Service Commission)