Consumers Energy has announced its intention to delve into the possibility of selling its portfolio of 13 hydroelectric facilities in Michigan, US, marking a strategic move to address the future of these vital infrastructures while prioritizing both reservoir integrity and customer economic interests.
In a bid to ensure sustainable and well-maintained dam reservoirs, Consumers Energy has unveiled plans to initiate a comprehensive request for proposal (RFP) process. This initiative comes in the wake of a dedicated effort by the energy company to engage with local communities and gather insights on the future of these hydroelectric resources. Recognizing the intrinsic value of these facilities and the connected reservoirs to the local communities, Consumers Energy said it aims to explore avenues that would allow reservoir preservation while minimizing financial burdens on its customer base.
"After numerous conversations over the past year, it is clear the reservoirs are important for economic and recreational opportunities in these communities across Michigan," said Norm Kapala, Consumers Energy's vice president of generation operations. "But we also know that the current model for financing our hydroelectric power operations requires customers to pay more than nine times for the cost of energy compared to other sources of generation.
"Today's announcement is an initial step we need to take to learn more about what selling the facilities might look like. If we choose to move forward and sell these facilities, our intention is to minimize the cost burden for customers while keeping the recreational and economic benefits for our communities. No final decision has been made, and we continue to explore all options."
Consumers Energy's proactive approach arises from the expiration of licenses for its dams over the next 11 years. These 13 hydroelectric facilities collectively contribute less than 1% of the overall energy supplied to Consumers Energy's nearly 2 million customers. Financial considerations, coupled with the relatively higher expenses associated with hydroelectric operations, have catalyzed this strategic evaluation, the company said.
While a decision to sell has not yet been finalized, Consumers Energy said it is committed to a transparent and consultative approach. The energy company plans to organize a series of community meetings in the coming months, designed to facilitate discussions regarding the potential sale of the dams, as well as other viable options that are currently under consideration. The objective is to involve stakeholders in the decision-making process and gather valuable insights that will inform the final decision.
Consumers Energy's federal operating licenses for dams situated on rivers like Muskegon, Manistee, Grand, Kalamazoo, and Au Sable are slated to expire between 2034 and 2041.
