Rising electric rates delayed in the UP

Dec 1, 2014

A plan to increase the cost of electricity in Michigan’s Upper Peninsula has been delayed. The rate increase would have taken effect today, but federal regulators have raised questions about its fairness.

The plan would raise rates 20% to 30% for residents and businesses across the UP. In total, the region of about 310,000 people would have to come up with more than $100 million over the next year.

The extra money is needed to keep a coal-fired power plant near Marquette open. The owners want to close the Presque Isle Power Plant, but it’s needed to keep the electric grid in the UP reliable. The plant lost its biggest customer last year when the owner of nearby iron ore mines switched to another utility.

Dan Dasho runs Cloverland Electric Cooperative in the Eastern UP and has been urging his members to write to lawmakers and other officials to stop the increase, which he says would devastate the region’s economy. Dasho says the delay will amount to about 90 days and does help.

“That means people are aware of the problem this is going to cause,” says Dasho.

Cloverland has argued that the eastern end of the UP does not rely on the Presque Isle Power Plant for reliability and that it is unfair for the cooperative’s members to pay to keep it operating.

That is one of the questions the Federal Energy Regulatory Commission raises in its review of the plan. The agency that ensures grid reliability, the Midcontinent Independent System Operator, has 30 days to respond to FERC’s questions.

At the moment, homeowners and businesses in Wisconsin and the UP are sharing the cost of operating the Presque Isle plant. The change that was supposed to take effect today, but was delayed, would have shifted the financial burden entirely onto Michigan’s Upper Peninsula. FERC’s questions suggest the pool of people who will pay could be narrowed further, meaning an even harsher blow to a portion of the UP.