The Michigan Public Service Commission (MPSC) approved an application from Consumers Energy Co. for a power purchase agreement (PPA) with Voyager Energy Storage LLC for a 100MW/400MWh battery energy storage facility.
The application was approved 21 November, the facility will be located in Washtenaw County, Michigan.
Energy-Storage.news research of the PPA documents revealed that Voyager Energy Storage LLC is operated by developer Jupiter Power.
Jupiter Power was also the developer in the 100MW Tibbits project for which Consumers Energy had a PPA battery storage deal approved in June of this year, in the Michigan township of Coldwater.
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The PPA with Voyager, with a 20-year lifetime, has a total cost of approximately US$404 million, with a fixed energy payment of US$14.54 per MWh for the plant’s capacity, energy, renewable energy credits, and environmental attributes.
The fixed energy payment of US$14.54 per MWh is the same dollar value based on availability as the Tibbits project PPA approved in June.
In Michigan Public Service Commission filing U-21090-0931, Consumers Energy’s application for its integrated resource plan (IRP), shows that the PPA has a projected energy and capacity market value of US$346 million, ancillary service market value of US$43 million, totalling US$388 million.
Consumers Energy modelled the cost and value of the Voyager PPA against the 2021 IRP poxy. The company claimed in the filings that the comparison showed the PPA was “cost-competitive” compared to the 2021 IRP.
Testimony showed the cost-to-value ratio (CVR) of the Voyager PPA to be 104.2% lower than the CVR of Consumer Energy’s 2021 IRP. The Voyager PPA has a levelised cost of energy (LCOE) of US$147.63/MWh, compared to Consumer Energy’s 2021 IRP which had an LCOE of US$147.99/MWh.
The filings also report that the project is expected to commence by 31 May 2027, setting a termination date of 31 May, 2047.
MPSC indicated that the order does not allow the company to raise customer rates or fees or allow for recovering costs related to the PPA. The order also does not assess whether the costs of the PPA are reasonable, only that they must align with MSPC’s Integrated Resource Plan (IRP).
Consumers Energy issued requests for proposals for capacity of a maximum of 700 zonal resource credits (ZRCs). These ZRCs, each representing 1MW of deliverable Seasonal Accredited Capacity (SAC) demonstrate that Consumers Energy has adequate resources to meet electricity demands.
ZRCs are used by utility companies of the Midcontinent Independent System Operator (MISO), which operates the electric grid in portions of 15 states in the Midwest and the South, plus the Canadian province of Manitoba, to demonstrate that they have sufficient capacity to meet energy needs.
In a 2022 settlement agreement, Consumers Energy agreed to increase deployment of energy storage resources to strengthen Michigan’s energy supplies. In August of this year, MPSC approved a PPA between Consumers Energy and NextEra Energy Resources for a 200MW/800MWh Energy Storage project in Huron County, Michigan.
MPSC has approved a sequence of deals since Michigan governor Gretchen Whitmer signed legislation last year targeting a 100% clean energy standard by 2040, and a 2030 target for 2,500MW of energy storage.
