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A Better Partnership

Publications

Dec 2008
16
December 16, 2008

Large Electric Consumers Can Develop Self-Directed Plan To Avoid Increases

With the recent passage of Michigan's Clean, Renewable, and Efficient Energy Act, your business will almost certainly be facing higher utility bills in the coming months and years. Among other things, the Act requires electric providers to implement energy optimization programs to achieve specific, incremental energy savings. Those programs will not be free, and providers are allowed to recover the actual cost of implementing their energy optimization programs from ratepayers.

But the Act might provide businesses like yours with a way to avoid at least part of the potential rate hike they are likely to face. Large electric consumers have the option of developing and implementing a self-directed energy optimization plan in lieu of participating in-and paying for-their utility's energy optimization programs. In other words, big users might be able to avoid a rate hike by developing their own multi-year plan designed to implement energy efficiency measures and reduce annual energy usage, measured in megawatt hours, by annual increments of between 0.3 percent and 1 percent, depending on the effective year of the plan and the year of implementation.

It is important to keep in mind, however, that implementing a self-directed plan is not necessarily the right decision for every large electric consumer. A company that implements a self-directed plan will not pay the costs associated with its utility's energy optimization program. But the company also will not benefit from any incentives that might otherwise have been offered through the utility's program. Accordingly, companies that are eligible to develop a self-directed energy plan should carefully weigh the costs and benefits to decide whether a self-directed plan is right for them.

Warner Norcross and Judd LLP can help with that decision. If you need assistance or would like more information, contact Scott Watson at 616.752.2465 or by e-mail to swatson@wnj.com.

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