FERC Filings
Motion of EPSA for Leave to Intervene and Protest on Detroit Edison Co.'s Request of Purchases of Power from DTE East China and DTE River Rouge No. 1
II. BACKGROUND
In Detroit Edison’s Report on Summer 2004 Capacity Plan that it filed with the Michigan Public Service Commission (MPSC) in March, the utility reported that it anticipated the need to purchase 1,271 MW from third parties this summer to meet projected load. According to DTE, however, recent events, including a more restrictive Transmission Reserve Margin than expected limiting firm transmission and fewer retail suppliers serving its native load, have increased the risk of supply shortfalls this summer. DTE asserts that these events have undermined two key planning assumptions, creating a 451 MW planning shortfall for this summer.
On May 12, 2004, Detroit Edison filed an application with the MPSC seeking an exemption from Section 32(k) of the Public Utility Holding Company Act of 1935 (PUCHA) to allow it to purchase power from two affiliated exempt wholesale generators. DTE argued that it would be reasonable for the MPSC to allow the utility to engage in unrestricted purchases of electric energy and ancillary services from East China and Rouge 1 because “it would adversely affect Detroit Edison’s ability to meet its retail electric service requirements if it is not allowed to do so.” The company also invoked system reliability concerns and the ability to restore service “should a wide-area blackout occur.”
In its June 3 Order, the MPSC found that “[m]aintaining reliability is vital to the public interest” and therefore reluctantly granted DTE’s exemption request. While approving the limited use of DTE’s affiliates as possible supply options for this summer, the MPSC stated that “[t]he Commission is particularly concerned with this request because DTE River Rouge was previously in Detroit Edison’s rate base. The Commission does not want to encourage the self-dealing that may result from allowing the company spinning-off its generating plant, then purchasing the power from the facility as a merchant operation.” (emphasis added).