TC Light & Power Approves Solar Deal, Rate Increases
By Beth Milligan | June 9, 2021
Traverse City Light & Power (TCLP) board members agreed Tuesday to purchase renewable energy from two major new solar projects downstate – a move projected to put TCLP over its goal of having 40 percent of its portfolio consist of clean and renewable energy by 2025. The board also approved customer rate hikes for the coming year, set rates for new electric vehicle charging stations coming soon to downtown parking spaces, and passed a resolution urging the early decommissioning of two coal plants.
Along with roughly a dozen other members of the Michigan Public Power Agency (MPPA), TCLP has committed to buying power from two new solar projects planned in Hart and Calhoun.
The MPPA evaluated multiple potential solar projects throughout the state and narrowed a list down to five finalist sites (which also included Manistee, Washtenaw, and Genesee counties) before selecting Hart and Calhoun as the top-scoring projects for potential energy contracts. Hart Solar Partners LLC is developing a 100 MW solar facility in Oceana County, which is expected to be operating by the end of 2023. The MPPA is planning to purchase half (or 50 MW) of that output. That power will be divided up among members, with TCLP’s allocation estimated at 13.2 MW. TCLP will have a 20-year contract at a flat rate of $42.10 per megawatt hour (MWh). The renewable energy TCLP receives from the project will contribute roughly 7.74 percent toward the utility’s 40 percent renewable energy goal by 2025.
Calhoun County Solar Project LLC is developing the second solar facility in Calhoun County. That array is expected to produce 125 MW, with the MPPA taking 25 MW. Of that amount, TCLP will have an estimated allocation of 6.8 MW, committing to a 20-year contract at a flat rate of $42.65 per MWh. That allocation will contribute another 4.27 percent toward TCLP's 40 percent renewable energy goal. The Calhoun facility is expected to be up and running by the end of 2022.
The two contracts, combined with TCLP’s existing renewable energy contracts – like for the two solar arrays on M-72 – will bring the utility’s portfolio up to 43.65 percent clean energy, according to projections. The MPPA believes “we will be above that 40 percent (threshold) by 2025, perhaps even a year early,” TCLP Executive Director Tim Arends told board members. He said the MPPA was actively working to help TCLP and other members connect with renewable energy projects; after 2025, TCLP’s next goal is to become 100 percent renewable by 2040. The city-owned utility was the first in Michigan to make that commitment when TCLP board members voted to adopt the goal in 2018.
“They (the MPPA) have been very aware of the goal of this utility…and they’ve done the numbers, they’ve done the load forecasting, and they’ve vetted these projects,” Arends said.
City Commissioner Tim Werner, who sits on the TCLP board, asked if it was possible for the utility to buy even more renewable energy from the new solar arrays. “Is this essentially the most we can get?” he asked. MPPA Director of Strategic Energy Resources & Services Steven Donkersloot affirmed it likely was for now, noting that other MPPA members also had allocations and that providers like DTE were also contracting for energy. Still, Donkersloot said the MPPA planned to keep adding renewable projects so members like TCLP could keep greening up their portfolios. “We’ve seen costs continue to come down on solar,” he said, adding that “positive things” are also happening on the federal level to expand renewable incentives.
A TCLP customer rate increase that was initially planned to go into effect last year was put on hold due to COVID-19. However, TCLP board members Tuesday approved moving ahead with the rate increase effective July 1.
The overall 2.5 percent increase represents an average that actually breaks down into different percentages among different customer categories. For example, residential rates will go up just over three percent. The flat monthly customer charge will increase from $7.50 to $9.00, with hourly rates increasing from 9.21 cents/kWh to 9.28 cents/kWh for the first 16 kWh per day. After that, rates are 10.55 cents per kWh. TCLP had a cost-of-service analysis done in 2018, which produced a five-year rate plan for the utility. The plan “was developed not only as a guide, but also to correct subsidies between rate classes, simplify the rate structures, and ensure sufficient revenue into the future to maintain a reliable system,” according to TCLP documents.
TCLP board members Tuesday also approved rates for new electric vehicle charging stations planned to be installed in parking spaces throughout the downtown area this summer. Twelve of the chargers are expected to be dual-port Level 2, while three will be DC Fast chargers. In addition to paying any applicable parking rates, users will be charged $.057 per minute for Level 2 charging while the vehicle is being charged and $.039 per minute while idle. Users in DC Fast charging spots will be charged $.308 per minute while the vehicle is being charged and $.122 per minute while idle. Additional processing fees may apply.
Coal Plant Resolution
Finally, TCLP members passed a resolution Tuesday expressing support for the early decommissioning of the coal-fired J.H. Campbell Generating Plant – operated by Consumers Energy in West Olive – and the Bell River Power Plant operated by DTE in St. Clair County. Consumers and DTE set the decommissioning schedules for those plants, with TCLP and other MPPA members making long-term commitments in the 1980s to purchase power from them while they remain operational. The TCLP resolution states that the utility is “working toward the elimination of its reliance on coal and fossil fuels” and “implores” Consumers and DTE To “expediently” move toward decommissioning the plants. The end of coal contracts will allow TCLP to move those portions of its portfolio over to more renewable energy sources. Board members added last-minute language Tuesday to make it clear that they want to “cooperatively work” with partners like Consumers Energy to “develop clean and carbon-free sources of energy throughout the state of Michigan.”