JACKSON, Mich. — Consumers Energy announced Wednesday morning that it's exploring its options to maybe sell 13 hydroelectric facilities.
The energy provider says it will issue a request for proposal (RFP) to do so. Consumers Energy says that’s one of the options the company is exploring. Other options include relicensing the dams for another 50 years, decommissioning and returning the river to a natural state and finally, having a low-head dam.
"If possible, keep the reservoirs that we know have huge community and recreational impact across our state. So that's why there's a holistic approach, and our hydro strategy," Consumers Energy's Vice President of Generation Operations Norm Kapala said.
Consumers says it's looking toward the future of the dams and considering the options to maintain the dam reservoirs safely.
West Michigan houses several dams, including the Croton, Hardy, and Rogers dams on the Muskegon River.
"After numerous conversations over the past year, it is clear the reservoirs are important for economic and recreational opportunities in these communities across Michigan," Kapala said. "But we also know that the current model for financing our hydroelectric power operations requires customers to pay more than nine times for the cost of energy compared to other sources of generation."
Consumers held more than a dozen town halls last year to talk with communities about the future of these dams— learning that these facilities and their associated reservoirs are important to community members and local leaders.
So, the energy provider is trying to figure out how to maintain the reservoirs— the lakes created by the dams— safely, while lowering costs for its customers.
Data shows that the 13 dams produce less than one percent of all the energy used by Consumers Energy's nearly two million customers— and are several times more expensive than other energy sources.
"For financing our hydroelectric power operations requires our customers to pay about nine times more for the cost of energy compared to other generation sources," Kapala told FOX 17.
One of the town hall presentations showed that the hydro fleet operates at a total loss of $152 million.
"[Wednesday's] announcement is an initial step we need to take to learn more about what selling the facilities might look like. If we choose to move forward and sell these facilities, our intention is to minimize the cost burden for customers while keeping the recreational and economic benefits for our communities. No final decision has been made, and we continue to explore all options," Kapala added.
Consumers is working with a limited window of time— the dams have 30-to-40-year federal operating licenses on the Au Sable, Grand, Kalamazoo, Manistee and Muskegon rivers, which are set to expire starting in 2034 through 2041.
"If there is a successful bidder that they have the financial backing to continue to operate and maintain the facilities, they have a good track record of environmental compliance and environmental stewardship, as we would expect," Kapala said.
The company says it has not made a final decision and plans to host more community meetings later this summer and into the fall.
"We know communities and residents that treasure these dams will have questions about the future. That's why we will continue to provide timely updates and be transparent throughout this decision-making process," Kapala said. "We've committed to exploring all options for safely maintaining these reservoirs for decades to come."
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