Consumers Energy Signs Agreement to Sell Its 13 Hydroelectric Dams in Michigan

Consumers Energy and the Sale of Hydroelectric Dams

Consumers Energy has announced a significant move by signing a purchase agreement to sell its 13 hydroelectric dams located along five rivers in Michigan to Confluence Hydro, a branch of Hull Street Energy, LLC. This transaction marks a pivotal step in ensuring cost savings for consumers while maintaining the operational integrity and community benefits of these vital resources.

Sri Maddipati, president of electric supply at Consumers Energy, shared that the sale strikes a balance between reducing energy costs for their customers and taking care of the communities that rely on these dams. Over the past three years, the company engaged with stakeholders and local residents to gain insights, which reinforced the decision to go ahead with the sale.

Confluence Hydro is not new to the energy landscape; it is backed by Hull Street Energy—a firm with extensive experience in managing and investing in power generation assets throughout North America, including 47 hydroelectric facilities. Ed Quinn, CEO of Confluence Hydro, emphasized their commitment to safety and modernization of these hydro resources, ensuring they maximize their contribution to the electricity grid while protecting local communities.

The agreement is contingent upon approval from both state and federal regulatory bodies, a process that could stretch out over the next 12 to 18 months. Confluence Hydro will enter a 30-year power purchase agreement with Consumers Energy, which will allow them to provide power generated from the dams. Additionally, they plan to work on renewing the federal operating licenses for these dams that are due to expire starting in 2034.

This sale represents the culmination of Consumers Energy’s efforts, initiated three years ago, to explore the most prudent options regarding the aging hydroelectric facilities. Other possibilities included decommissioning, maintaining ownership within Consumers Energy’s assets, or outright sale. Jean Kang, vice president of generation operations at Consumers Energy, noted that the dams account for less than 1% of their business, underscoring that focusing on core operations in reliability investments is paramount. The transfer of ownership to a specialized firm like Confluence Hydro will allow these facilities to receive the attention and investment they require.

As part of the transition, Consumers Energy has notified its hydro operations staff, who will be offered employment with Confluence Hydro upon completion of the sale. Until that time, Consumers will continue to run the dams. The company has also kept residents informed of the changes and plans to hold community meetings around each dam site during the summer and fall seasons.

For those seeking further information on the impact of this transition, resources are available at ConsumersEnergy.com/hydrofuture, where updates will be posted regularly as the situation develops. The sale not only represents a strategic business decision for Consumers Energy but also reinforces the commitment to deliver reliable, clean energy efficiently while supporting local economies and preserving valuable natural resources for future generations.
 
Consumers Energy, recognized as the largest energy provider in Michigan, delivers both natural gas and electricity to approximately 6.8 million residents across the state's Lower Peninsula. The company remains dedicated to its mission of ensuring energy reliability and affordability. Customers can expect continued service as Consumers navigates this thoughtful transition.

For further inquiries about Consumers Energy and its operations, visit ConsumersEnergy.com.