Citing lower costs, Mich. utility slashes renewable energy surcharge

Jackson, Mich.-based investor-owned utility Consumers Energy said it will reduce its surcharge to customers for renewable energy from $2.50 to 65 cents a month, a cut of nearly 75 percent.

According to, the Detroit News website, "The savings stems from the utility updating its renewable energy plan, a plan that lowers costs because of changing economic conditions, wind turbines technology improvements and other factors."

The reduction, which has been approved by the Michigan Public Service Commission, will save the average household $22 per year, or $54 million annually for Consumers’ total customer base, and would seem to be another indication that wind power costs are coming down.

The updated plan, the utility said, maintains its commitment to have 10 percent of the electricity it provides to customers by 2015 come from Michigan renewable sources, as required by the state’s energy reform law. About 5 percent of the electricity supplied to its customers today comes from renewable sources.

Consumers Energy’s plan calls for continued development of its 100-MW Lake Winds Energy Farm in Mason County. In July, the Mason County Planning Commission voted to approve the utility’s application for a special land use permit for the wind park.

Lake Winds wind power will be Consumers Energy’s first wind farm and is expected to begin operation in late 2012. An economic impact study for this construction project estimates that the total direct and indirect economic benefits to Michigan would be $132 million. The number of construction jobs for the project is expected to peak at about 150 workers.

The utility will also continue development in Tuscola County of its 150-MW Cross Winds Energy Park, scheduled for operation by late 2014.

A 2008 study by the Department of Energy under the Bush Administration found that if wind power provided 20 percent of America’s electricity, the cost, above and beyond a no-new-wind scenario, would be approximately 50 cents a month per household.

In addition, fossil fuels receive a huge hidden subsidy due to the fact that their health and environmental costs are not fully reflected in their market price. In 2008, the National Academy of Sciences estimated the hidden costs of health impacts alone (not including climate change) at $120 billion per year. But, even that number may be too low–a recent study from the Center for Health and the Global Environment at Harvard University puts coal’s hidden costs at $300 billion to $500 billion a year.

Tom Gray,