Michigan Hydro Relicensing Coalition Opposes Consumers Energy Planned Sale of Hydropower Projects

Strategic Insights -

The Michigan Hydro Relicensing Coalition (Coalition) has expressed strong opposition to Consumers Energy's planned sale of its 13 hydropower projects to a new owner. The Coalition, a party to the 1992 Settlement Agreement and ex officio member of the MMAC Team overseeing the implementation of this agreement, has been engaged in the planning process since August 2022. Consumers Energy had initially planned to sell the physical assets of the projects for $1 and enter into a 30-year power-purchase agreement (PPA) with the new owner, which would then sell the power directly to Consumers Energy's customers. However, the Coalition strongly opposes this plan, citing concerns over disincentives for future capital investments, economic viability, ratepayer "unfairness," abandonment of local communities, water quality, tribal considerations, post-sale license requirement implementation, and the potential for "mining" the projects for revenue.

Key Takeaways:

  • The Coalition objects to the planned sale of Consumers Energy's 13 hydropower projects due to concerns over the lack of incentives for future capital investments, economic viability, and potential abandonment of local communities.
  • The new owner would not be able to sell power directly to the public, making it impossible to recover costs through rate hikes, thus eliminating any incentive for investments in dam safety improvements.
  • Ratepayers would continue to pay for expensive renewable energy, which may not be fair to those without a local interest in the hydropower projects.
  • The planned sale poses significant risks to water quality, especially in six of the projects that currently do not meet state water quality standards for temperature during summer months.
  • Tribal interests, including gathering rights, tribal lands, and species of cultural significance, need to be fully respected and honored in any sale.
  • Post-sale license requirement implementation is uncertain, and new owners have Historically been less committed to meeting existing requirements.
  • The potential for the new owner to "mine" the projects for revenue, as seen in other Michigan hydropower projects, is a significant concern.

Statistics:

  • 13 hydropower projects are subject to the planned sale.
  • 6 of the hydropower projects currently do not meet state water quality standards for temperature during summer months.
  • 30-year power-purchase agreement (PPA) between the new owner and Consumers Energy.
  • Consumption energy plans to sell the physical assets for $1.
  • 1992 Settlement Agreement between Consumers Energy and other parties that established the framework for the relicensing of these projects.

Sources:

  • Federal Energy Regulatory Commission, Correspondence from Michigan Hydro Relicensing Coalition, dated June 23, 2025.
  • Public Sector Consultants, Email message to Michigan Hydro Relicensing Coalition, dated June 4, 2025.
  • Michigan Public Service Commission (MPSC) rate hikes for power production.
  • 1992 Settlement Agreement between Consumers Energy and other parties.
  • MMAC Team's implementation of the 1992 Settlement Agreement.