An administrative law judge says Consumers Energy’s plan to sell its 13 aging hydroelectric dams to an out-of-state private equity firm should be rejected.
The utility said the dams were too expensive to maintain, and would either need to be sold or decommissioned.
Judge James Varchetti said the deal was "unreasonable and imprudent," in violation of state law that requires utility decisions by state regulators to be reasonable and prudent.
The Michigan Public Service Commission will make the final decision on the proposal's fate.
Consumers Energy had proposed to sell the hydroelectric dams it currently operates on the Au Sable, Manistee, Muskegon, Grand and Kalamazoo Rivers for $1 each, to an affiliate of Hull Street Energy, a private-equity firm in the energy industry. The new owners would maintain the dams and sell the electricity back to the utility.
Howard Learner is with the Environmental Law and Policy Center, which submitted testimony opposing the sale. He said the plan would raise electricity rates for Michigan residents, and could threaten public safety.
"Consumers Energy is trying to offload its risks and transfer the dams to an out-of-state private equity company that will have no responsibility to the people of the state of Michigan. And the public service commission will lose oversight," Learner said. "When it comes to dam safety and flooding, that's not a good risk for the people of the state of Michigan."
Bob Stuber, executive director of the Michigan Hydro Relicensing Coalition, a group of environmental organizations that opposed the sale, said Consumers Energy shouldn't be able to walk away from its obligation to meet with local governments, environmental groups, and residents with lakeside properties on the impoundments created by the dams.
"They've been part of the social fabric of these communities for over 100 years," he said.
Consumers Energy said in a statement, "It’s important to note the administrative judge’s recommendation is not legally binding. We believe the judge did not appropriately recognize the major benefits of the sale starting with the significant cost savings for Consumers Energy customers and protecting the 13 communities and tens of thousands of people who depend on the dams. We will continue to remind the Commission of the strong evidence supporting approval of the transaction and advocate that this sale is the best choice for our state and should be approved."
Consumers Energy has until July 1 to file objections to the administration law judge's opinion, and intervening groups will have until July 15 to respond to those objections.
Editor's note: Consumers Energy is among Michigan Public's corporate sponsors.
