CONTACT: Judy Palnau 517.241.3323

October 14, 2004

The Michigan Public Service Commission (MPSC) today issued an order that directs the MPSC staff, representatives of the power generation community and other interested parties to accumulate, assess and evaluate data on the construction of new generation capacity. The Commission also directed these parties to recommend policies that facilitate the development of new base-load generation facilities in Michigan. In addition, the MPSC staff was directed to file a status report by July 1, 2005 and a final report on these issues by Jan. 1, 2006.

"Today, the Public Service Commission is taking a vital step to ensure that Michigan maintains a reliable supply of power in the future," said MPSC Chair J. Peter Lark. "As we learned from the blackout last year, the time to prepare for electric reliability is before a problem exists, not after. Although Michigan has added many new generating units designed for short-term peaking, the state has not built a new base-load plant for 16 years. These plants, which form the backbone of our supply system, are aging. Many are over 50 years old. That is why the Commission is taking the first step today to investigate the need for future resources and the means to obtain them."

Today's order specifically directs those working on this investigation to:

• analyze all power supply cost recovery filings for five-year load growth forecasts, system requirements and other data on the need for resource additions
• review electric utility rate case filings and annual reports for information on property held for future use
• meet with employees within the electric power industry responsible for load growth forecasting, resource additions and siting issues
• propose membership in a Generation Capacity Addition Forum (GCAF) to be approved by the Commission. The GCAF would review data and advise the Commission on resource addition policy matters

The report required by the Commission will address:

• the anticipated short, intermediate and long-term demand for power
• the ability to meet projected demands from existing resources
• potential resource options that are available, if additional resources are needed
• recommendations

In addition, Lark noted that renewable resource generators will be included in the investigation into the need for additional capacity.

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

Case No. U-14231

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