Regulatory overhaul could give boost to independent generation in Michigan

Advocates say recent regulatory changes in Michigan could spur more solar energy development from independent producers and ensure existing renewable energy generators are paid fair prices from utilities for their power. On May 31, the Michigan Public Service Commission approved changes to the way avoided costs are determined under the federal Public Utility Regulatory Policies Act (PURPA) of 1978. Avoided costs are those that utilities pay independent power producers for their electricity that the utility would have otherwise had to pay itself. In Michigan, there are 45 facilities under contract with utilities, mostly landfill gas and hydro.The long-awaited changes to determining avoided costs, which are the first in roughly 25 years in Michigan, could provide protection to independent power producers who say they are at risk of shutting down. In a rate caseinvolving Consumers Energy, producers feared their avoided costs would have been cut in half, making their plants not economically viable.