The document summarizes energy issues and opportunities in Michigan's Upper Peninsula. It discusses the region's reliance on distant power sources, high electricity rates, and the upcoming closure of its largest power plant. To improve reliability, affordability and local economic development, the document advocates developing local renewable energy and efficiency. It analyzes the region's energy landscape and regulations, and identifies 52 advanced energy technologies that could help achieve greater energy independence and sustainability.

1. Energy in the UP
Jay Meldrum
Chris Green
Abhilash Kantamneni
Details and sources available in “A Vision for Upper Peninsula Energy Future” White Paper.
1Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

2. 2
Energy
Goals
Reliable
National
Security
Resilient
Infrastructure
Affordable
Economic
Development
Job Creation
Sustainable
Self-reliance
Community
development

3. Sustainability
• ‘investing in local resources and measures to safeguard
long term economic and social progress in communities’
• ‘building infrastructure that does not rely on distant
sources for fulfilling basic needs’
• ‘stimulates local economic activity, leverages local
assets resources and capital’
• ‘local participation, decision making and self-reliance’

4. 4
Utilities
Regulators
Shareholders
CustomersAdvocates
Legislators

5. • Single line High-voltage transmission and low-
voltage distribution are economical.
• High-capacity line minimizes capital costs and
losses
• Transmission and distribution are natural
monopolies.
Generation: Presque Isle Power Plant (PiPP) owned by WEPCO
Transmission: American Transmission Company (ATC)
Distribution: Upper Peninsula Power Company (UPPCO), Alger Delta
Source: www.econlib.org

6. State Regulation: Michigan Public Service Commission (MPSC)
Regional Regulation: Midwest Independent System Operator(MISO)
Federal Regulation: Federal Energy Regulatory Commission (FERC)
Source: www.econlib.org
• Utility serves ALL
customers in the area
• Utility maintains
reliability and
dispatches generation
• Utility designs rate
structures to distribute
costs (Cost of Service
Study)
* Some coops, like REA have voluntarily chosen to regulate their own rates.
• Govt. grants utility monopoly
over a service area
• State commission approves
utility rates*
• State guarantees “fair” return
on equity and “prudently”
incurred expenses
• ‘Return on Equity’ high
enough to attract capital, but
low enough to be
economical
Government Responsibilities Utility Responsibilities

7. Image source - MISO
Image source - EIA

8. 8
MISO LMP REAL-TIME MAP

9. ATC “FOOTPRINT”

10. 4 Investor-Owned
Utility Companies
3 Rural Electric
Cooperatives
12 Municipal Electric
Utilities
10Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

11. 11
1%
3%
32%
31%
16%
11%
6%
38%
38%
24%
WE
WPS
Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

12. UP pays over $
300 million every
year in electricity
bills.
Residents pay a
significant portion
of yearly bills
12Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni
2%
5%
27%
39%
17%
7%
5%
50%
24%
26%
WE
WPS

13. OCREA
ALGERDELTA
UPPCO
PRESQUEISLE
WEPCO
GREATLAKES
DTEELECTRIC
ALPENA…
CONSUMERS
TRI-COUNTY
CHERRYLAND
MIDWEST…
THUMB
CLOVERLAND
XCEL
WPS
AEP
MI AVERAGE RESIDENTIAL ELECTRIC RATES
2013
[$/KWH]
MI Average: $0.14/kWh
Source: MPSC Utility Company Annual
Reports 2013
Residential Electric Rates
13Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

14. Residential Electric Rate Increases
OCREA
ALGERDELTA
UPPCO
PRESQUEISLE
WEPCO
GREATLAKES
DTEELECTRIC
ALPENAPOWER
CONSUMERS
TRI-COUNTY
CHERRYLAND
MIDWEST…
THUMB
CLOVERLAND
XCEL
WPS
AEP
MI AVERAGE RESIDENTIAL ELECTRIC RATE
INCREASE 2001-2013
MI Average: 74%
Source: MPSC Utility Rates Summary
14Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

15. Abhi
(@akantamn)

16. Regions with the
highest rates also
have economically
vulnerable
populations
Interactive Map-
http://bit.ly/UPEnergy
Poverty
16Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

17. Regions with the
highest rates also
have
economically
vulnerable
populations
Interactive Map-
http://bit.ly/UPEn
ergyPoverty
17Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

18. MI Public Act 295 (2008) Overview
Renewable
Energy Standard
(RES)
10% of all retail
electric sales for all
utilities in MI to come
from renewable
sources
Energy
Optimization
Program (EO)
Authorizes EO
surcharge on monthly
bills to finance
customer Energy
Efficiency upgrades
Net Metering
Program
On site renewable
electric generation
with credits for
monthly excess
generation

19. MI SB437/SB438 (2016) Overview
“Clean
Energy Goal”
30% clean energy goal
met through energy
efficiency, natural gas
and renewables.
Energy
Efficiency
Removes mandates,
replaced with
performance
incentives
Customer
generation
Buy all, sell all

20. MI Public Act 296 (2008): Overview
Limits Electric
Choice
Only 10% of
utilities retail sales
may seek
alternative supplier
Creates
Exception for
Mining
Iron ore mining or
processing not
subject to choice
limits

21. CONSUMERS
39%
DTE
50%
Other
7%
Alger-
Delta
0%
CLOVERLAND
1%ONTONAGON
0%
UPPCO
1%
WE
1%
WPS
1%
Xcel
0%
UP
4%
Michigan Annual Electricity Consumption by Utility

22. Abhi
(@akantamn)

23. 23
Questions?

24. 24
Preprint: Abhilash
Kantamneni, Richelle
Winkler, Lucia Gauchia,
Joshua M. Pearce, Emerging
economic
n in a northern
climate using solar hybrid
systems. Energy Policy 95,
378–389 (2016). doi:
10.1016/j.enpol.2016.05.013

25. Image source - ATC

26. Reliability
• Limited generation in the
UP
• Electric grid isolated from
the lower peninsula
• Transmission expansion
across straights
prohibitively expensive
• Transmission operator (ATS)
majorly owned by WI
utilities
• Infrastructure reliant on WI
utilities
26Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

27. Reliability
• Largest power plant closure
(PiPP) puts reliability at risk
• Lack of immediate
replacement options
• Costs allocation from
subsidizing PiPP operation
($117 M a year) yet to be
determined
27Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

28. Affordability
Several regions in the Upper Peninsula pay the highest rates in the
state, and are among the highest in the country.
4 out of 5 utilities in Michigan with the highest residential electric
rates, are in the UP. The top three highest (OCREA, Alger Delta and
UPPCO) are exclusive to just the central and western UP with little to
no local generation.
Conversely, 3 out of 4 lowest Michigan electric rates are in the UP.
There are typically utilities with contiguous territories and services
areas.
28Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

29. Abhi
(@akantamn)

30. 30
Interactive
Chart available
at
http://bit.ly/UP
FuelMix
Keweenaw Research Center Details and sources available in “A Vision for Upper Peninsula
Energy Future” White Paper by Meldrum, Green and
Kantamneni

31. 31
Utilities
Regulators
Shareholders
CustomersAdvocates
Legislators

32. 32
Non-local
•Shareholders
•Regulators
•Legislators
Local
•Customers
•Advocates
•Legislators

34. YEAR UPPCO PRESS STATEMENTS*
(emphasis mine)
UPPCO
REQUEST
(Annual)
MPSC
DECISION
ROE
[%]
2013
“covering expenses for several
improvement projects and
inflation”
$7,883,410
$5,819,583
(25% less)
5.80%
2011
“Fund safety improvements to
McClure, Bond Falls, Victoria, and
Prickett dams to comply with federal
standards”
$7,701,288
$4,200,000
(46% less)
6.27%
2010
“Hydroelectric projects, Reduced electric
sales, increased cost for reading meters
monthly, General inflation”
$15,559,133*
$8,868,706
(43% less)
7.12%
2009
“Hydroelectric facility upgrades, Cost of
capital, Low sales growth, It's been three
years since our last base rate increase” $12,182,239
$6,499,934
(47% less)
7.83%
2006
“inflation, new customer service system,
improve system reliability, and increased
generator maintenance”
$6,230,897
$3,813,000
(42% less)
N/A
2005
“recover costs associated with improving
service quality and reliability and
managing rising employee and retiree
benefit costs”
$4,547,800
UPPCO
withdraws
request.
N/A
2002
“Our last rate increase was granted in
1993 and was phased in over two years,
1993 and 1994” $9,938,841
$4,868,158
(51% less)
N/A

35. 35

36. 36

37. 37
Utilities
Regulators
Shareholders
Customers
Advocates
Legislators

38. 38
Utilities
Regulators
• outside MPSC
Local Community
• Shareholders
• Customers
• Advocates
Legislators
• Local government

39. •Anaerobic
Digestion
•Biomass
Power
•Combined
Heat & Power
•Fuel Cells
•Gas Turbines
•Geothermal
•Hydroelectric
•Landfill Gas
•Flexible AC
•High Voltage DC
•High Temp.
Superconductors
•Syncophasors
•Energy Storage
•EV Charging
•Distribution Automation
•Advanced Metering
•Advanced Distribution
•Microgrids
•Demand Response
•Voltage Optimisation
•Behavioral Efficiency
•Data Analytics
•Efficient Building
Systems
•Efficient HVACs
•Efficient Water
Heating
•Intelligent Lighting
•Efficient Electronics
•Building Management
•ESCO Services
•Utility Efficiency
Programs
•Waste Recovery
•Conservation
•Infrastructure
Efficiency
•Clean Diesel
•Hybrid EV
•Plug-in EV
•Hydrogen
Vehicles
•Advanced
Gasoline ICE
•Natural Gas
Vehicles
•Ethanol
•Biodiesel
•Compressed
Natural Gas
•Hydrogen
Generation
Delivery &
Management
Building
Efficiency
Water
Efficiency
Transport
•Marine &
Hydrokinetic
•Large-Scale
Nuclear
•Modular Nuclear
•Distributed Solar
•Large-Scale Solar
PV
•Solar Thermal
•Onshore Wind
•Off-Shore Wind
•Waste to Energy
Adapted from
report by
Abhi
(@akantamn)
52 Advanced Energy
Technologies
Fuel
Delivery