Consumers Energy Company · NYSE:CMS/PB
Consumers Energy — Corporate Update (October 2022)
26 slides from Consumers Energy's corporate update, Oct 4, 2022
Slide 1: Consumers Energy Hydro Strategy: Tippy Dam Community Conversation
Consumers Energy Hydro Strategy Tippy Dam Community Conversation Maggie Pallone and Elizabeth Riggs, Public Sector Consultants Eric Gustad and Marianne Walter, Consumers Energy October 4, 2022 PUBLICSECTORCONSULTANTS.COM PUBLICSECTORCONSULTANTS.COM
Slide 2: Conversation Objectives
Conversation Objectives • Share information about the development of Consumers Energy’s long-term hydro strategy • Gain community-wide understanding about the process and future scenarios • Gather input on community factors that should be accounted for in the strategy PUBLICSECTORCONSULTANTS.COM 2
Slide 3: Overview of Consumers Energy River Hydro Strategy
Overview of Consumers Energy River Hydro Strategy October 2022 PUBLICSECTORCONSULTANTS.COM
Slide 4: CE River Hydro History
CE River Hydro History Owned more than 90 river hydro assets Typically, small multiple-use assets that supported a local community Generation advances and exhaustion of prudent locations stopped expansion 70+ assets sold or retired between 1940 and 1970 due to asset value (customer value vs. cost) 4
Slide 5: River Hydro Fleet Details
River Hydro Fleet Details Average Plant FERC License Dam Capacity (MWs) MW/day Commissioned Expiration Date Rogers 6.75 2.66 1906 6/30/2034 Hardy 31.5 11.87 1931 6/30/2034 Croton 8.85 3.79 1907 6/30/2034 Hodenpyl 17 5.57 1925 6/30/2034 Tippy 20.1 7.13 1918 6/30/2034 Calkins Bridge 2.55 1.52 1935 3/3
Slide 6: Regulatory Agencies
Regulatory Agencies • Michigan Public Service Commission • Federal Energy Regulatory Commission (FERC) • Division of Hydropower Administrative and Compliance (DHAC) • Michigan Department of Environment, Great Lakes, and Energy (EGLE) • Michigan Department of Natural Resources (DNR) • U.S. Fish and W
Slide 7: Detailed Review
Detailed Review Safety Complying with regulations Cost of operation Environment Community Recreation 7
Slide 8: Safety
Safety Satisfactory Condition with FERC FERC Inspections Owner’s Dam Safety Program Public Safety 8
Slide 9: Complying with Regulations
Complying with Regulations Division of Hydropower Administration and Compliance FERC Licensing Process • Integrated Licensing Plan Dam Safety and Inspections • Updated Regulations in 2022 9
Slide 10: Cost of Operation (Fleet)
Cost of Operation (Fleet) Benefit of CE River Hydros: Total average value = $12.9M/year 250 Cost of River Hydros: 200 Dollars (Millions) Capital Investment 150 Operations and Average = $165M maintenance = $12.6M/year 100 • Funding for internal/external labor to 50 Operations & Maintenance Expense op
Slide 11: Tippy Dam Cost
Tippy Dam Cost Actual Forecasted O&M Actual Capital Forecasted O&M Costs Costs Costs Capital Costs 2017-2021 2023-2027 2017-2021 2023-2027 Tippy Dam $4.34M $6.01M $1.75M $3.45M Tippy Avg O&M Cost: $1.04M Tippy Avg Value: $1.826M of the $12.9M (fleet) *All forecasts are subject to change or shift 11
Slide 12: Environment
Environment River Sediment Water Quality A downstream barrier (invasive species) Critical for the resurgence of the Bald Eagle in MI Spillway acts as a cave and is home to up to 20,000 bats each winter 12
Slide 13: Community & Recreation
Community & Recreation Originally called Junction Dam Well known for trout, steelhead, and salmon fishery Approximately 80K annual recreational visitors 6 Boat Launches 2 Boat Marinas 3 Campgrounds 13
Slide 14: Future Scenarios
Future Scenarios • Relicense the dam, meeting all the new regulatory requirements, and continue to generate power • Surrender the license and sell the dam to a third-party owner, who could maintain the dam structure and impoundment • Remove the dam and return the river to its natural state • Replace
Slide 15: Relicensing—Integrated Licensing Process
Relicensing—Integrated Licensing Process • Relicensing is handled through FERC • Examples of issues the applicant will and takes approximately five years need to study are: • The process involves the general public, - Water quality and other nongovernmental organizations, tribal, environmental issue
Slide 16: Surrendering the FERC License
Surrendering the FERC License • Consumers may choose to no longer generate power and not relicense the facility. This process would require them to file a request with FERC to surrender their license • Without power generation, Consumers could look to alternative options for the dam: - Transfer owne
Slide 17: Removal of a Dam
Removal of a Dam • The process for removing a dam is regulated by state and federal agencies. When considering a dam removal, the applicant and regulators consider: - Benefits of the dam and the impoundment (preventing the movement of aquatic invasives, sediment control, historical significance, tra
Slide 18: Transferring Ownership
Transferring Ownership • Example: Four Lakes Task Force—four dams located on the Tittabawassee River in Midland and Gladwin Counties • Ownership was transferred from a private party to the Four Lakes Task Force, which oversees the Special Assessment District (SAD) on behalf of the counties • Countie
Slide 19: Replacing the Dam
Replacing the Dam • When a full removal of the dam does not meet the needs of the community, regulators, and/or dam owners, dams sometimes can be replaced with an in-river structure. These options may include: - Modifications to the current dam - Replacing the dam with a different dam structure (e.g
Slide 20: Engagement Process and Plan Development Timeline
Engagement Process and Plan Development Timeline • August–October 2022: Pre-strategy development community engagement - Community meetings around each dam - Website launched - Survey of property owners located within 100 feet of Consumers’ property lines • Early 2023: Long-term hydro strategy is dev
Slide 21: Community Input
Community Input PUBLICSECTORCONSULTANTS.COM 21
Slide 22: Community Input
Community Input What does Consumers Energy need to understand about this community's relationship to the river, the dam, and its impoundment? PUBLICSECTORCONSULTANTS.COM 22
Slide 23: Community Input
Community Input Does it matter to you that Consumers Energy owns the dam? Why? PUBLICSECTORCONSULTANTS.COM 23
Slide 24: Community Input
Community Input Regardless of the outcome, what would Consumers Energy need to provide to your community to make you feel their decision was prudent and your input was incorporated? PUBLICSECTORCONSULTANTS.COM 26
Slide 25: For more information, please visit www.consumersenergy.com/hydrofuture
For more information, please visit www.consumersenergy.com/hydrofuture PUBLICSECTORCONSULTANTS.COM 27
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