Michigan Public Service Commission Approves Gas Cost Recovery Plan for Consumers Energy Company

Strategic Insights -

The Michigan Public Service Commission (MPSC) has approved a gas cost recovery plan for Consumers Energy Company, allowing the company to roll into its 2009-2010 plan a net underrecovery of $15,563,139 from the 2008-2009 plan. The plan was approved after a lengthy review process, during which the MPSC considered objections from various parties, including the Michigan Community Action Agency Association (MCAAA) and the Residential Ratepayer Consortium (RRC).

Key Takeaways:

  • The MPSC approved a gas cost recovery plan for Consumers Energy Company, allowing the company to roll into its 2009-2010 plan a net underrecovery of $15,563,139 from the 2008-2009 plan.
  • The plan was approved after a lengthy review process, during which the MPSC considered objections from various parties, including the MCAAA and the RRC.
  • The MPSC rejected objections from the MCAAA, which argued that Consumers Energy Company should be penalized for purchasing too much gas at too high a price from April through July 2008.
  • The MPSC agreed with the Staff that the MCAAA's objections were misplaced, and that the company's purchasing decisions were reasonable and prudent based on the information available at the time.
  • The MPSC pointed out that Consumers Energy Company followed its GCR plan and made reasonable adjustments where required, and that the speculative and undisciplined gas acquisition practices advocated by the MCAAA could put the company's customers at risk of higher costs or insufficient supply.

Statistics:

  • The net underrecovery of $15,563,139 will be rolled into Consumers Energy Company's 2009-2010 gas cost recovery plan.
  • The company will be authorized to roll into its 2009-2010 GCR plan the net underrecovery of $16,379,094, minus $815,955 to reflect interest owed to customers.
  • The MPSC approved the plan after considering objections from various parties, including the MCAAA and the RRC.

Sources:

  • "In the matter of the application of Consumers Energy Company for reconciliation of gas cost recovery revenues and expenses for the 12-month period ended March 31, 2009." Michigan Public Service Commission, November 4, 2010, Case No. U-15454-R.
  • "December 18, 2007 order in Case No. U-14401-R." Michigan Public Service Commission.
  • "February 3, 2009 order in Case No. U-15454." Michigan Public Service Commission.