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9.21.17 – SPOKES Notes


Consumers Energy has been in business more than 130 years but it certainly is changing with the times. While this writer, as a Consumers Energy employee, may be a little biased, we received a comprehensive update with everything the company is doing locally and across Michigan.

Our presenter was Community Affairs Manager Karen McCarthy, who has been with Consumers Energy nearly 35 years.

“It’s no secret that the energy industry is changing rapidly,” McCarthy told the Club. “While some of the transformation is due to changes in laws and regulations, a large portion of the shift is being driven by customer interest.”

While what is now Consumers Energy was founded in 1886, Karen said Grand Rapids has an interesting place in electricity development in the state and country. In 1880, William Powers used hydro power from the Grand River for streetlights in the city of Grand Rapids. This was considered the first hydroelectric plant in the United States!

Consumers Energy is a Fortune 500 company, one of Michigan’s largest and most established businesses and the fourth largest combination (providing electricity and natural gas) U.S. utility. Consider the Jackson-based company has:

  • More than 7,300 employees and more than 3,000 contractors;
  • 7 million customers
  • More than 66,000 miles of electric distribution wires
  • More than 27,900 miles of natural gas distribution pipeline
  • 15 underground natural gas storage units

Here in West Michigan, most people know Consumers as the electric company, but statewide it is actually a larger gas company than DTE Energy and has about 7,000 gas customers in Kent County alone. Also in Kent County, the company has three service centers, in Wyoming, Kentwood and Sparta, home to more than 500 employees. The company paid $16 million in property taxes in Kent County in 2016.

Under the leadership of its new President and CEO Patti Poppe, McCarthy said Consumers Energy and its parent company CMS Energy are “viewing the world through a wider lens – considering how each decision we make impacts our customers and co-workers, our natural resources and those who invest in our company. We call this our Triple Bottom Line – People, Planet, Profit. It certainly is a phrase you often hear in West Michigan.”

As customers’ appetite for more renewable energy increases, Consumers Energy is testing new technology in Grand Rapids as part of its Circuit West project. This is a several-block area on the city’s West Side where Rockford Construction and others are developing a number of new projects, including Meijer’s Bridge Street Market and the new home of the West Michigan Center of Arts and Technology (WMCAT). The company is looking to work with businesses with roof-top solar arrays tied into battery storage units. This will be the first time Consumers Energy has used battery storage technology to improve the efficiency and reliability of renewable energy sources.

But the company has been in the “battery business” since the early 1970s when it opened the Ludington Pumped Storage Plant in partnership with DTE Energy. The plant on the shores of Lake Michigan pumps up water into a 27 billion gallon reservoir during times of lower electric use. During the day, when energy demand is higher, those pumps turn into generators and can create enough electricity, on short notice, to serve up to 1 million people.

“It can hit peak power in just minutes and helps balance the grid with customer demand,” McCarthy said, adding the plant was a critical part of keeping the large blackout of August 2003 from spreading further west.

While it doesn’t capture as many headlines as other news coming out of Lansing, Consumers Energy is very involved with energy policy matters. In late December, Gov. Snyder signed the 2016 Energy Law. The law helps provide the stable regulatory climate which allows regulated utilities like Consumers Energy to plan and invest for the longer term. Among the law’s provisions are:

  • Reduce energy waste
  • Requires all providers to secure electric generating capacity needed to serve their customers
  • Everyone pays their fair share
  • Better utility planning to ensure best value for customers
  • Increases focus on renewable energy – 15% by 2021
  • Increases consumer protections
  • Maintains 10% electric choice provision

“The electric sector is unique in that the product cannot, as of yet, be readily stored, so it must be used as it is produced,” McCarthy said, adding that the capital intensive nature of long-term investments sometimes totaling billions of dollars means “when we go to Wall Street for financing, they like to know the money will be there to pay them back. This is where a good regulatory structure is key. And we believe the best regulation is done at the state level and not in Washington, D.C.”

Judging by the number of good questions McCarthy fielded from members, it appears the presentation hit the mark with the Club.

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