MPSC Approves Power Purchase, Other Agreements for The Detroit Edison Company with Gratiot County Wind LLC

Contact: Judy Palnau (517) 241-3323

The Michigan Public Service Commission (MPSC) today approved a power purchase agreement, build transfer agreement, shared facilities agreement, and letter agreement with Gratiot County Wind LLC (GCW), finding them in compliance with Public Act 295 of 2008.

On August 13, Detroit Edison filed an application for ex parte Commission review and approval of a long-term power purchase agreement with Gratiot County Wind LLC for 200 megawatts (MW) of renewable energy credits (RECs), which included an option for the company to purchase a portion of the wind project with a capacity of either 59.2 MW or 89.6 MW.

Should Detroit Edison decide to exercise its option to purchase a portion of the wind project, the company intends to contract for the balance of the PPA in the amount of either 140.8 MW or 110.4 MW, respectively, for the energy, capacity, and RECs.

In addition to the PPA and in support of the company's purchase option, Detroit Edison submitted a build transfer agreement (BTA) that describes the obligations of the transfer of assets, a shared facilities agreement (SFA) that details how the company and GCW will jointly operate the wind farm, and a letter agreement (LA), which, upon Detroit Edison's decision to exercise the option to purchase a portion of the wind project in the PPA, will initiate the SFA and BTA.

The PPA, BTA, SFA, and LA resulted from two separate requests for proposals (RFP), both dated August 17, 2009.  In accordance with Michigan law, the PPA, BTA, SFA, and LA resulted from negotiations with qualified bidders that were able to demonstrate the best value and lowest-cost renewable energy.  

In approving the PPA, BTA, SFA and LA, the MPSC noted that they will not result in any change in the rates or cost of service to other customers.

Should Detroit Edison decide to exercise its option to purchase a portion of the wind project in the amount of 59.2 MW or 89.6 MW from GCW, the company has been directed to file a letter in this docket explaining the purchase, accompanied by executed copies of the contracts.

In addition, the MPSC said a general rate case proceeding  is the appropriate place to handle the accounting associated with any imputed debt.

The MPSC is an agency within the Department of Energy, Labor & Economic Growth.

Case No. U-15806