Indiana Michigan Power Company 2023 Power Supply Cost Recovery Docket
Synapse provided expert testimony and analysis to support Sierra Club in Reviewing Indiana Michigan Power Company’s (I&M) Power Supply Cost recovery Plan (PSCR) for the calendar year 2023 in Michigan Public Service Commission Docket U-21261. Synapse testimony focused on evaluating the prudence of I&M’s PSCR plan for 2021. Specifically, we evaluated I&M’s justification for charging Michigan customer for the purchase of power from its affiliate, Ohio Valley Electric Corporation (“OVEC”), at above-market prices.
We found that OVEC currently maintains and operates its two power plants, Clifty Creek and Kyger Creek, uneconomically. Further, OVEC is projected to continue this practice based on the company’s own data and projects. I&M's own estimates show that it's projects it will lose $76.5 million in energy market revenue and capacity value over the five-year PSCR forecast period (2023-2027) by purchasing energy and capacity from OVEC. These costs will be passed on to ratepayers with absent protection from the Commission.
We recommended that the commission amend the PSCR plan by removing the above-market costs for OVEC from the PSCR factor for the plan year. We also recommended that the Commission warn I&M that on the basis of present evidence, it will likely disallow recovery of OVEC costs above the cost of energy and capacity from an equivalent benchmark in future PSCR reconciliation dockets.