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Varnum Successfully Represents Hydro in Interconnection Rules Dispute with Utility

April 28, 2017

Varnum energy attorneys successfully represented a hydro-power generator client against Consumers Energy Company in a dispute over whether maintenance activity at the their hydroelectric plant should trigger a need for a new interconnection study and significant new costs, or if it was governed by an existing interconnection agreement between the hydro and the utility. The case highlighted the importance of the language in the interconnection agreement for determining the rights of a generator under the Interconnection Rules.

Consumers argued that after the generator replaced a turbine with a new, higher-efficiency turbine, it was obligated to file a new interconnection application regardless of whether or not the plant's actual output would increase.

On behalf of the generator, Varnum successfully argued that changes made at the plant did not constitute material modifications for purposes of the interconnection rules, and that the maintenance activity was instead governed by the existing interconnection agreement between the generator and Consumers. The Michigan Public Service Commission agreed with Varnum and the generator that under that agreement, it was the utility which bore responsibility for paying for and installing new communication and protective equipment needed on the utility's distribution system, which was discovered to be deficient during the interconnection application process.

The final order was issued in April 2017 following testimony and briefing at the Michigan Public Service Commission.

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