(The Center Square) – Consumers Energy recently announced it plans to sell its entire hydropower fleet of 13 dams across Michigan.
The company, which is Michigan’s largest energy provider, signed a purchase agreement last week with Confluence Hydro, an affiliate of Hull Street Energy, LLC.
Consumers said in a news release that this will help reduce long-term costs for its 6.8 million customers, while ensuring “the dams will continue to operate safely and provide economic and recreational benefits for nearby communities.”
“We believe a sale of the dams is the best path forward for our customers. This sale balances two important needs, to lower costs for Consumers’ customers while continuing to care for communities that depend on the dams,” said Sri Maddipati, Consumers’ president of electric supply. “After numerous conversations with community members over the last three years to gather insights and feedback, we are confident this sale will preserve the reservoirs that hold the key to economic, recreational and community benefits at each of the dams.”
The dams are along five different Michigan rivers. Consumers does plan to continue operating the dams until the sale is complete, at which point the dams’ employees will be offered jobs by Confluence Hydro.
Hull Street Energy is an investment firm that currently owns 47 hydroelectric facilities throughout the nation.
While both parties have agreed on the sale, it has not yet been finalized. Brian Wheeler, a media relations specialist for Consumers, told The Center Square that the company plans to ask federal and state regulators to approve the license transfer and sale of the assets. Wheeler added that more financial information on the sale would be available at that time.
After that, the sale could be finalized in about 12 to 18 months.
As a part of the sale, Confluence Hydro has agreed to continue operating all 13 dams for the next 30 years.
“The dams will continue to supply the same amount of energy that they do today,” Wheeler said. “We feel we have reached a good outcome that preserves the dam reservoirs, which are important to many neighbors, and allows the dams to operate for another 30 years.”
Currently, the dams’ federal operating licenses are set to begin expiring in 2034. Confluence Hydro will seek to renew those licenses.
“With decades of experience operating hydro facilities, we are committed to preserving and modernizing these important resources to maximize their contribution to the grid,” said Ed Quinn, CEO of Confluence Hydro. “We see extraordinary opportunity to leverage our combined strengths to build a best-in-class hydro company – one that protects communities, supports employees, mitigates risk, and delivers reliable, clean energy for the future.”
The century-old dams were quickly becoming a liability for Consumers, which has labeled the sale a “milestone” for Michigan’s energy grid.
Jean Kang, Consumers’ vice president of generation operations, said she is happy that Consumers customers will not have to shoulder the financial burden of upgrades.
“Consumers Energy’s dams are a small part of our business, less than 1%, and our resources are best spent on needed investments in electric and natural gas reliability,” said Jean Kang, Consumers vice president of generation operations. “A buyer who has a focus on river hydro generation is better equipped to invest in these resources.”
