Legislative Alert/Update

Update as of 10/31/16

Of the five FERC Commissioners, two have left the commission in Washington and one has recused them self from our case. The two vacancies will not be filled until after the new President makes two appointments who then have to be confirmed by the Senate. Our attorneys in Washington are predicting that to happen at the end of the first quarter of 2017. Until then, we are on hold for any SSR costs. 

The Michigan Senate is expected to vote on the energy legislation package during the lame duck session. The ore mine exemption language is still in the bill at the insistence of the Governor’s administration. House and Senate members representing our area agree with Cloverland that this exemption needs to be removed, but are not able to work around the Governor’s office. The mine signed a 20-year deal to take electricity from the Presque Isle Power Plant until 2020 when it is supposed to close and then the new gas-fired power plant after that. Even with a 20-year contract, the Governor’s office says the ore mine exemption will not be removed. Cloverland will continue to work with our House members to get this language removed. 

Update as of 9/30/16

In July 2016, an administrative law judge issued his initial decision that Wisconsin Electric’s and MISO’s numbers for the 2014 to 2015 System Support Resource (SSR) costs for the Presque Isle Power Plant were unsupportable and should be reduced. His decision along with many briefs were filed at FERC in August. At this time, Cloverland is on hold until FERC issues its final decision expected later this year or the first of 2017. Until then, FERC has instructed MISO not to invoice Cloverland for the SSR costs. 

The Senate still has not voted on the much-debated energy legislation package presented in 2015. Cloverland is still requesting the one sentence ore mine exemption be removed from the bill before it is approved. If not, Cloverland members are at risk to bear a portion of the financial burden for the proposed gas-fired generation facility in Marquette scheduled for 2019.

Call To Action

Make Your Voice Heard!

One Sentence Costs Cloverland Members $9.8 Million Surcharge

This has nothing to do with rates; it has nothing to do with being member regulated; it has nothing to do with a board decision―it has everything to do with one sentence quietly inserted in Public Act 286 in 2008. PA 286, Section 10a. (1)(d) states “Notwithstanding any other provision of this section, any customer operating an iron ore mining facility, iron ore processing facility, or both, located in the Upper Peninsula of this state, shall be permitted to purchase all or any portion of its electricity from an alternative electric supplier, regardless of whether the sales exceed 10% of the service electric utility’s average weather-adjusted retail sales.”  What does this have to do with Cloverland Electric? We are now responsible for an $9.8 million surcharge to pay for one year of the operating cost for the Presque Isle Power Plant in Marquette that is scheduled to close in 2020.

Cloverland Electric has been telling our members about this issue since 2014, and now we have the tangible results of this ore mine exception. When PA 286 was passed, large electric consumers were allowed to move up to 10 percent of their electric load away from their providing utility. The two ore mines, owned by Cliffs Natural Resources, were allowed to move 100 percent of their load away from the Presque Isle Power Plant and its owner Wisconsin Energy. In 2013, Cliffs Natural Resources began paying their power bill to an alternative electric supplier (AES) yet still receiving electricity from the Marquette Plant. Wisconsin Energy lost 80 percent of their load and faced with a $115 million operating budget and costs to install EPA-mandated clean air equipment, announced the plant would close. Being the only major electric generation facility in the Upper Peninsula, the Mid Continent Independent System Operator (MISO) intervened and determined the power plant could not close without jeopardizing the electric reliability in the Upper Peninsula. Wisconsin Energy agreed to keep it open only if they were paid. Cloverland Electric’s portion was projected to be $22 million. A grassroots effort by the membership got the mines back to Wisconsin Energy as customers and delayed a decision on the cost for Cloverland members―until now. We are still challenging this decision and will continue to do so at the federal level.     

What is even more unbelievable is the fact that this one sentence still remains in the Senate and House version of the new energy legislation under debate in Lansing.  At this time, Lansing and the Governor have showed no interest in removing this exception. Cloverland Electric may be saddled with this $9.8 million bill, but we have to do everything we can to convince the Legislature to remove this language or the ore mines could once again move their electric load to an AES. We have heard the saying “Fool me once, shame on you. Fool me twice, shame on me.” We cannot let this happen to us again. Posted below is the contact information for Senators Wayne Schmidt and Tom Casperson. Senator Mike Nofs is the chair of the Senate committee dealing with the Energy Legislation and Rep. Aric Nesbitt is the chair of the House committee dealing with the Energy Legislation.  Our message is simple: “Cut out the ore mine exemption in Senate Bill 437. It has cost Cloverland Electric members $9.8 million and we cannot afford it.”

We may or may not be able to convince Lansing to remove this ore mine exception, but we will certainly not be ashamed of our efforts to prevent this from happening again.  

Contact Information for our legislators:

Rep. Lee Chatfield

Rep. Aric Nesbitt

Sen. Wayne Schmidt

Sen. Tom Casperson

Sen. Mike Nofs

 

 

 

 

Cloverland Electric Cooperative is an equal opportunity provider and employer.

The Cloverland logo is copyright protected and not to be used without approval from Cloverland Electric Co-op.