Powering Our Future in Michigan

With a customer-focused approach to planning the future, we submitted our Powering Our Future plan to the Michigan Public Service Commission on September 15.

The plan outlines the next steps we are proposing to better serve customers. Key elements of the plan include infrastructure investments that result in a more reliable and resilient electric grid and a detailed evaluation of extending the future of Cook Nuclear Plant beyond its current license expirations.

In addition to the Cook study, the Powering Our Future plan benefits customers by:

• Replacing old equipment, increasing the frequency of planned tree-trimming and installing new grid technologies, all of which will result in fewer and shorter power outages.
• Relocating and rebuilding about 45 miles of power lines from hard-to-access areas to roadsides, giving crews quicker access to perform maintenance and repairs to lines and related equipment.
• Providing residential customers with more bill payment options that meet their needs and lifestyles.
• Using technology to provide an improved customer experience through better access to account information, shorter customer service call times and overall improved communication options.
• Pursuing federal grants to reduce costs, improve reliability and help communities succeed.
• Continuing programs that eliminate the residential service charge for income-qualified customers and reducing rates for senior citizens who use less than 900 kilowatt-hours (kWh) of energy per month.
• Expanding the Distributed Generation program for residential customers eligible to receive credits for the solar and wind power they generate and provide to the electric grid.

Powering Our Future emphasizes continued improvements, so fewer customers lose power and power is restored faster. Our ongoing improvements to the electric grid over the past five years have led to a reduction in the time customers have been without power and our proposed infrastructure investments in this plan are expected to continue this trend.

In order to continue building on these successful efforts to maintain a strong electric grid and provide safe and reliable service to customers, we have requested a rate increase of about $34 million or 9.67%.

Under the proposal, the bill for a typical residential customer who uses 1,000 kWh of electricity a month would go from $162.96 to $177.90 per month. The new rates will vary for residential, commercial, and industrial customers based on specific rate classifications.

This proposal could also result in lower rates over time if the company receives tax credits and federal or state grants to offset future project costs.

We carefully weigh the impact that every project has on the cost of service to customers. Our goal is to find a balance between affordability and investments that are necessary to improve reliability and public safety. In addition, we continually review our operations and look for ways to be more efficient and cost-effective.

Infrastructure and Reliability

Powering Our Future is key to our ongoing efforts to address aging infrastructure, enhance reliability, safeguard the public and make the system more resilient to weather events.

In 2023–2024, we propose investing nearly $550 million in the infrastructure necessary to reliably deliver electricity from power plants to our customers' homes and businesses and prepare for the grid of the future.

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With a growing number of poles, wires and other equipment reaching the end of their expected life spans, we are systematically prioritizing infrastructure replacements and incorporating new technologies to improve the system. For example, with Powering Our Future, we will replace more than 850 aging poles and 93 miles of power lines.

Trees, branches and limbs interfering with lines are a major cause of power outages. This plan would accelerate our tree-trimming program to trim vegetation near overhead power lines every four years instead of the current five-year cycle.

Under Powering Our Future, we will relocate 55 sections of hard-to-access power lines over about 45 miles of terrain that includes dense vegetation, rivers, lakes and fire lanes. Making these line sections more accessible helps with safer and faster restoration of electric service.

Our continued commitment to improve reliability is producing benefits for customers. The number of total minutes customers were without power dropped by 25% (excluding major storms) over the past five years.

We continue to increase our use of smart technology to detect outages and automatically re-route electricity to restore service more quickly to a larger number of customers.

This approach is a thoughtful, reasoned, flexible process to complete the right projects at a reasonable cost to ensure reliable service.

Cook Nuclear Plant

Cook Nuclear Plant, located in Bridgman, plays a key role in meeting our customers’ energy needs – with zero carbon emissions. Cook Plant has two units that separately generate power and are licensed through 2034 and 2037, respectively. Though those dates are over a decade away, the process for extending the license of a nuclear plant is lengthy and requires significant advance work.

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Cook Plant generates enough energy to power the equivalent of 1.5 million homes. Cook Plant is the major reason our generation in 2022 was more than 80% emission free.

The plant is also a major contributor to the southwest Michigan economy. Cook has 990 full-time I&M employees; employs approximately 100 to 200 contract workers on a long-term basis; and adds 600 to 1,000 temporary contract workers during refueling outages.

To make the best decision on how to move forward, we propose to begin a comprehensive study to determine whether to apply to the Nuclear Regulatory Commission for a 20-year extension of the licenses. The study will require extensive inspections of the plant, environmental reviews, assessment of nearly 250,000 plant components and public participation.

In the Powering Our Future plan, we are seeking regulatory approval for the study, but most of its costs will be deferred and not collected from customers at this time.

New Payment Option

We are proposing PowerPay, a voluntary payment option that allows customers to pre-pay their electric bills, much like pre-paid cell phones. PowerPay offers customers a choice of when and how to pay their electric bills, providing the opportunity to make payments that are more in line with their cash flow.

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PowerPay would help customers avoid larger-than-expected bills by receiving daily updates on usage and related costs. With no deposits, reconnection or late fees, PowerPay would help remove barriers for new customers to make deposits and help reduce account balances.

The program is voluntary, and customers who prefer standard monthly billing would not have to change how they pay their bills.

Customer Information System

We serve about 133,000 Southwest Michigan homes and businesses over 1,370 square miles. As the needs of our customers change, modernization of the technology they interact with is essential.

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The Powering Our Future plan includes a new customer information system. The new system will enable us to meet customers’ expectations by providing a modern platform to communicate through texts, e-mail, smart-phone apps and our website.

This system will allow I&M to offer customers additional programs and position I&M to serve its customers as new technologies and customer expectations continue to evolve.

Customer Power Generation

Customer-owned generation is known as Distributed Generation because it is located where the electricity is used. We work with customers who own their own devices (primarily rooftop solar panels or wind turbines) to generate power. When customers generate more power than they use, the excess energy is delivered to our electric grid and customers are compensated for that power.

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With Powering Our Future, we propose an expanded Distributed Generation program that recognizes the growth in customer-owned generation resources and provides a reasonable and balanced approach to the compensation these customers receive for excess generation.

Service Charge

Powering Our Future proposes to adjust the customer service charge to more accurately reflect the true cost of service provided to each customer. The costs of poles, wires, transformers and other infrastructure do not change based on the amount of energy used, yet most of a customer’s bill is based on the volume of electricity consumed.

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We are requesting a change in the residential customer service charge, from $7.25 to $11.50, to better reflect the fixed costs associated with connecting a customer to the system. The proposed increase is included in – and not in addition to – the proposed new rates.

What's Next

The Michigan Public Service Commission will review our plans using a transparent process that offers the opportunity for public review and input.