AG: UPPCO acquisition to come with added ratepayer benefits, protections
LANSING — The acquisition of an Upper Peninsula electric company has resulted in additional benefits for thousands of customers after Michigan Attorney General Dana Nessel intervened.
At a recent meeting, the Michigan Public Service Commission approved a settlement that allowed Axium UP Holding to acquire ownership of the Upper Peninsula Power Company.
In its initial application for acquisition, Axium committed that:
– existing rates for UPPCO customers would not be impacted; no workforce cuts would result from the acquisition;
– the utility would continue to honor charitable contributions for at least five years; and
– Axium would implement a debt refinancing plan to benefit customers by increasing long-term stability and reducing financing costs.
The department intervened in the case and worked with the MPSC staff and Axium to “create additional benefits for UPPCO customers and protect them from acquisition premiums or other rate impacts,” officials said in the release.
After “lengthy discovery and negotiations,” according to the release, the parties agreed, in addition to the above benefits, to the following:
– a moratorium on any increase in base rates from a general rate case until Jan. 1, 2023, with a limited exception to recover only the amount of any future corporate tax increase during that time frame;
– an additional $800,000 of revenue credits to all UPPCO customers;
– an Axium shareholder forgiveness of 20% of uncollectibles or bad debt that has grown during the pandemic with no cost to UPPCO customers;
– an increase in the distributed generation cap from 2% to 3% to allow more access to renewable generation for customers;
– an agreement by Axium to implement measures to reduce the company’s equity percentage in the next general rate case; and
– an agreement by Axium to work with the parties on the U.P. Energy Task Force recommendations, such as the direct fast chargers, electrification of heating and low-income programs for customers.
“Thus, above and beyond just making sure the acquisition would have no impact on customers, the settlement negotiated by the department and approved by the MPSC brings added rate relief, benefits and protections for all UPPCO customers,” the attorney general’s office said.
“With all acquisitions, it is important we ensure consumer protections are front and center,” Nessel said in the release. “I’m proud of the work my team did alongside the involved parties to obtain this added relief and benefits for UPPCO customers.”
UPPCO serves about 52,000 customers located in 10 of the Upper Peninsula’s 15 counties.
A copy of the May 26 order can be found on the MPSC website.