Consumers Energy Company · NYSE:CMS/PB
Consumers Energy — Corporate Update (2023)
39 slides from Consumers Energy's corporate update, Sep 1, 2023
Slide 1: Consumers Energy River Hydro Strategy 2023 Community Meetings
Consumers Energy River Hydro Strategy 2023 Community Meetings Maggie Pallone and Elizabeth Riggs, Public Sector Consultants Josh Burgett and Derek Nofz, Consumers Energy PUBLICSECTORCONSULTANTS.COM
Slide 2: Agenda for Tonight
Agenda for Tonight • Provide updated information about the development of Consumers Energy’s long-term river hydro strategy • Continue to engage the community in the conversation, identify concerns, and address questions • Identify a path for the community to have additional ownership in the future
Slide 3: Consumers Energy Long-term Hydro Strategy
Consumers Energy Hydro Long-term Hydro Strategy With 11 out of 13 of the operating licenses issued by the Federal Energy Regulatory Commission (FERC) expiring over the next 11 years, Consumers Energy has started a multi-year review of all its hydroelectric plants to find a solution to keep rates aff
Slide 4: River Hydro Locations
River Hydro Locations River Systems • Au Sable River (6) • Manistee River (2) • Muskegon River (3) • Grand River (1) • Kalamazoo River (1) PUBLICSECTORCONSULTANTS.COM 5
Slide 5: Hydro Fleet Generation Capacity Overview
Hydro Fleet Generation Capacity Overview PUBLICSECTORCONSULTANTS.COM 6
Slide 6: Consumers Energy Generation Sources
Consumers Energy Generation Sources Percentage of Fuel Type Used To Produce Consumer Energy’s Total Electricity 2024 Wood Solid Waste Incineration Wind 1.7% 0.8% 7.6% Other Solar 0.0% 3.8% Biofuel Biomass 0.0% 0.0% Hydroelectric Coal 1.1% 22.1% Oil 0.0% Nuclear 0.0% Gas 62.8% PUBLICSECTORCONSULTANTS
Slide 7: Thank You for Your Participation in 2022
Thank You for Your Participation in 2022 1,700 attendees at 22 facilitated sessions with communities and local leaders Nearly 570 unique comments via emails and online 60 percent return rate for the adjacent property owner surveys (1,381/2,312) Three meetings with stakeholder groups PUBLICSECTORCONS
Slide 8: What Did We Hear and Learn?
What Did We Hear and Learn? Communities had not considered an alternative future for the river hydro plants. Trust in the company’s safety record is high. Community members do not trust the company to prioritize what communities want concerning the hydro plants. Preferences for the future of the pla
Slide 9: Summary of Adjacent Property Owners Feedback from 2022
Summary of Adjacent Property Owners Feedback from 2022 PUBLICSECTORCONSULTANTS.COM 10
Slide 10: Survey Respondents By River Hydro
Survey Respondents By River Hydro N = 1,381 PUBLICSECTORCONSULTANTS.COM 11
Slide 11: Preferences Regarding the Future of the Dams
Preferences Regarding the Future of the Dams (N = 1,340) PUBLICSECTORCONSULTANTS.COM 12
Slide 12: Property Owner Survey Results
Property Owner Survey Results Important Factors When Deciding Between Dam Relicensing and Removal (N varied by response) PUBLICSECTORCONSULTANTS.COM 13
Slide 13: Property Owner Survey Results
Property Owner Survey Results Concerns About Dam Operation at Time of Survey and If It Were Removed (N varied by response) PUBLICSECTORCONSULTANTS.COM 14
Slide 14: Property Owner Survey Results
Property Owner Survey Results Respondents’ Willingness to Pay an Additional Annual Fee (N = 502) PUBLICSECTORCONSULTANTS.COM 15
Slide 15: Website Respondent Preferences
Website Respondent Preferences PUBLICSECTORCONSULTANTS.COM 16
Slide 16: Preferences of Website Respondents
Preferences of Website Respondents # of respondents (N = 567) PUBLICSECTORCONSULTANTS.COM 17
Slide 17: River Hydro Specific Feedback
River Hydro Specific Feedback PUBLICSECTORCONSULTANTS.COM 18
Slide 18: Calkins Bridge Dam
Calkins Bridge Dam • 811 comments were received across all channels of input • Main concerns and priorities: - Tax contributions and property values - Presence of contaminated sediments - Fisheries and other aquatic resources - Access to flatwater recreation - Keeping the impoundment PUBLICSECTORCON
Slide 19: Responding to Feedback
Responding to Feedback PUBLICSECTORCONSULTANTS.COM 20
Slide 20: Taking Feedback and Turning into Data
Taking Feedback and Turning into Data Responding to feedback we heard from the community, over the past year Consumers Energy has: • Completed 13 economic contribution studies to understand the economic contribution the facilities have on: - Taxes - Economic spending - Property values • Continued to
Slide 21: Improving Engagement in 2023
Improving Engagement in 2023 Expanded engagement More direct outreach to Meetings in 2022 were The community needs a opportunities so more people in the focused on gathering way to stay plugged in voices can contribute to communities where the information from adjacent and engaged as the conversatio
Slide 22: What is an Economic Contribution Analysis?
What is an Economic Contribution Analysis? • What is an economic contribution analysis? - A current-state snapshot of the overall market without making assumptions about future changes in the underlying economy. - Measures the economy-wide effects of the current level of activity of a business or in
Slide 23: Regional Economic Contributions Data: Calkins Bridge Dam
Regional Economic Contributions Data Calkins Bridge Dam PUBLICSECTORCONSULTANTS.COM 25
Slide 24: Economic Contribution Analysis: Calkins Bridge
Economic Contribution Analysis: Calkins Bridge • Annually, recreational and business assets surrounding the impoundment created by the Calkins Bridge Dam contribute: - About $3.35 million in gross regional product and support for 60 jobs - More than $858,000 in local, county, state, and federal taxe
Slide 25: Property Value Analysis: Calkins Bridge
Property Value Analysis: Calkins Bridge The presence of the lake and river also enhance adjoining property values, contributing: • An additional $68.4 million in market value to 4,599 adjacent and nearby properties • An additional $1.46 million in local and state property tax revenue due to the incr
Slide 26: Statewide Economic Contribution of the River Hydro System
Statewide Economic Contribution of the River Hydro System PUBLICSECTORCONSULTANTS.COM 28
Slide 27: Economic Contribution Comparison
Economic Contribution Comparison Direct Direct Direct Total Estimated River Employment Gross Regional Product Total Tax Revenues Market Value Enhancement Au Sable River Alcona 67 $1,567,448 $597,530 NA Mio 125 $4,653,303 $1,556,964 $1,135,609 Loud 12 $356,804 $120,818 NA Five Channels 6 $166,820 $56
Slide 28: Statewide Economic Contribution Analysis
Statewide Economic Contribution Analysis 636 jobs are additionally $140 million is added to 1,420 jobs across the created statewide by the the state’s gross product state are a direct result of indirect and induced each year as a result of recreational spending purchases made by dam-related recreati
Slide 29: Understanding the Cost Impact of the River Hydro Fleet
Understanding the Cost Impact of the River Hydro Fleet PUBLICSECTORCONSULTANTS.COM 34
Slide 30: Cost of Generation
Cost of Generation • Hydro power represents approximately 1.1% of Consumers Energy total electricity generation. • Hydro power is 9x more expensive than other sources of generation • After elimination of coal as a generation source, hydro power is about 15x more expensive than other sources of gener
Slide 31: Financial Impacts
Financial Impacts All Hydro Facilities Customers would pay: $781 • ~$781M* more to relicense 1,400 vs. decommission all 13 hydros 1,200 • ~$3M* more to decommission vs. relicense Calkins Bridge Dam if the 1,000 entire fleet is operating Over the course of the next license Millions • 800 period it wo
Slide 32: Bill Impacts
Bill Impacts Over 60 years, the cost to relicense Consumers Energy’s hydro fleet will increase average customer bills: Residential $3.60/month or $43.20/year Small business $13.80/month or $165.60/year Large business $1,040/month or $12,480/year Current average bills: Residential: $117/month Small B
Slide 33: Seeking External Funding Options
Seeking External Funding Options 9 Dam Safety Project Loan Applications 243 (Efficiency) • $636M Max guaranteed Department of loan Met with multiple state • 9 Project applications • $16.4M Potential Funding • Jun 2023 – Applications due (submitted) Energy Loans • Approx $113M savings over 30 years S
Slide 34: Seeking Potential Buyers
Seeking Potential Buyers Preparing a Request for Proposals (RFP) that will generate potential buyers Anticipated release of RFP in Q4 2023 Applications due in 2024 Applications reviewed and interviews scheduled in 2024 Interviews conducted in 2024 PUBLICSECTORCONSULTANTS.COM 39
Slide 35: Status on Relicensing the Hydro Facilities
Status on Relicensing the Hydro Facilities • Consumers Energy is considering each river hydro plant individually and in relation to others up- and downstream. • Investment from external funding is necessary for Consumers to pursue relicensing • If sufficient funding is not available, the company wil
Slide 36: Partnering for Community Prosperity
Partnering for Community Prosperity • In concert with communities, Consumers Energy seeks to be a partner to local groups to develop rivershed prosperity plans. • More information will be announced before the end of the year, including a local organization that will serve as a convener of a new loca
Slide 37: For More Information
For More Information Stay up to date on Consumers Energy’s Long-Term Hydro Strategy consumersenergy.com/hydrofuture PUBLICSECTORCONSULTANTS.COM 43
Slide 38: Meeting regarding Lake Allegan reliability issues
If you are interested, please join Consumers Energy for a meeting regarding Lake Allegan reliability issues in the Conference Center in this building. PUBLICSECTORCONSULTANTS.COM
Slide 39: Public Sector Consultants / Consumers Energy
PUBLIC SECTOR CONSULTANTS Consumers Energy Count on Us®