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150395 - In re Application of Consumers Energy/2009 Costs

In re Application of Consumers
Energy Company for Reconciliation
of 2009 Costs
Tes Filer City Station Limited Partnership,
David E. S. Marvin
(Appeal from Ct of Appeals)
Consumers Energy Company,
Robert W. Beach
Michigan Public Service Commission and Attorney General,
Lauren D. Donofrio
Robert P. Reichel


TES Filer City Station is an electricity generating plant that generates some of its electricity from wood waste.  In 2007, the Michigan Department of Environmental Quality (DEQ) promulgated regulations requiring biomass plants (like TES Filer) to purchase NOx emission allowances beginning in 2009.  The United States Environmental Protection Agency conditionally approved the DEQ regulations in 2007, and finally approved them in 2009.  TES Filer purchased seasonal and annual NOx allowances in 2009.  It then sought to recover the cost of the NOx allowances under MCL 460.6a(8).  Under this statute, the costs would be recoverable only if they were “incurred due to changes in federal or state environmental laws or regulations that are implemented after” October 6, 2008.  The Michigan Public Service Commission concluded that TES Filer could not recover the cost of purchasing the NOx allowances because the DEQ’s regulations were not “implemented after” October 6, 2008.  The Court of Appeals agreed in a published opinion, with one judge dissenting.  The Supreme Court will consider when the DEQ’s administrative rules requiring generators to purchase NOx allowances were “implemented,” as that term is used in MCL 460.6a(8).