Cloverland Customers Voice Discontent About Proposed Rate Hikes In U.P.

Press Release

With potential huge price hikes in the works for all Upper Peninsula residents, Congressman Dan Benishek (R-Iron Mountain) is calling on the Federal Energy Regulatory Commission (FERC) Chairman Cheryl LaFleur to delay the proposed cost increase allocations due to the large volume of complaints.

"The proposed increases and the process in which this is occurring is simply unacceptable," said Benishek in a news release from his Washington D.C. Office. "Families, schools, businesses -- basically anyone who lives and works in the U.P. -- could be looking at a big rate increase as soon as December 1, without gaining any sort of benefit."

The Cloverland Electric Cooperative, which serves the vast majority of residences and businesses throughout the Eastern Upper Peninsula, has warned its customers that they will face substantial rate hikes if public and political pressure is unable to derail the proposed plan.

President and CEO Dan Dasho of Cloverland provided a glimpse of the proposed increase at Monday's meeting of the Sault Ste. Marie City Commission where it was revealed that the average customer -- using 800 kilowatts per month -- would see their bill increase by more than $27 a month or $326 a year.

For larger operations -- think industrial firms, large retail stores, hotels, casinos and restaurants -- the annual increase could exceed $6,000 a year for those using 15,000 kilowatts a month, according to Dasho.

The increased prices, according to Dasho, are designed to cover the $52 million annual costs associated with the Presque Isle Power Plant with an additional $64 million allocated for upgrading the coal-fired plant to federal regulations.

Cloverland's share, under the FERC and Midcontinent Independent System Operator (MISO) formula, would require the Eastern Upper Peninsula to pay more than 20 percent of the costs despite the fact that it would provide no direct benefit to our area.

"I will be working with all stakeholders and local policy makers until a solution to this problem is found," said Benishek. "We have to deal with the immediate rate increase, while also focusing on a long-term solution to the unique energy needs of the U.P., which have been dealt an incredible blow by the increasing costs and regulatory regime forcing the closure of coal fired plants in our area."

The efforts of Cloverland Cooperative spokespeople and customers have caught the attention of Congressman Benishek but, to date, there has been no official response from either Senator Carl Levin or Senator Debbie Stabenow.

Benishek also noted that the Michigan Public Service Commission has a pending complaint with FERC regarding this decision which may provide another avenue in turning back the proposed price increase.

With more than 10,000 views on its website directly attributable to proposed rate increases, Communication Director Todd Chapman of Cloverland Electric Cooperative expressed the belief that word is getting out to the membership.

"This is unbelievable what is happening right now," he said. "We are rallying the troops to get the message out."

Cloverland Cooperative members are working on a number of fronts in Washington D.C, Lansing and here at home.

A piece of correspondence from the Tahquamenon Area School, which shows the district is facing a $10,000 increase in electric bills, has come into the possession of The Evening News. One could surmise that other districts throughout the region are facing similar spikes if FERC carries out its plan.

"$10,000 may not seem like a lot of $$ for some organizations, but it will negatively impact the quality of education in our district," wrote Trustee Gerald Grossman.

That was just one letter delivered to MISO President and CEO John Bear.

Chapman indicated the flood of correspondence is unprecedented.

"In the 14 years they have been in existence they have never had a letter-writing campaign from home owners," he said. "They are overwhelmed."

MISO has since incorporated a robo-letter of sorts responding to all who have written regarding this matter.

"The current rule is the result of long FERC history and processes, and is currently the focus of several open FERC dockets and proceedings" wrote Bear in an attempt to deflect blame. "We would encourage you to participate in that process. To that end, our authority in this matter is limited as the matter continues to be before the FERC."

"We know FERC is getting feedback," said Chapman. "We know MISO is talking to FERC. It's working, it's definitely working and we are going to continue."

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