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CONSUMERS POWER, ABATE AND MPSC STAFF RESOLVE MIDLAND NUCLEAR PLANT DIFFERENCES TO MEET FUTURE COMPETITIVE CHALLENGES

 CONSUMERS POWER, ABATE AND MPSC STAFF RESOLVE MIDLAND NUCLEAR PLANT
 DIFFERENCES TO MEET FUTURE COMPETITIVE CHALLENGES
 LANSING, Mich., March 3 /PRNewswire/ -- A joint resolution signed today by the Association of Businesses Advocating Tariff Equity (ABATE), Consumers Power Company and the Michigan Public Service Commission (MPSC) technical staff would resolve a number of old regulatory issues relating to Consumers Power Company's abandoned Midland nuclear plant and the gas-fired plant it built on the site, the Midland Cogeneration Venture (MCV), if approved by the MPSC.
 Under the proposed resolution, all Consumers electric customers would share in refunds of an estimated $75 million -- and residential customers who lose electrical service for 72 hours or longer would receive credits on their monthly electric bills.
 If approved, the resolution would make permanent a temporary MPSC ruling which disallows certain costs for power Consumers purchased from the MCV during 1990 and 1991, requiring Consumers to make two refunds to all classes of its electric customers. An estimated $25 million should be refunded by this summer and an estimated additional $50 million should be refunded within a year.
 A proposed "Residential Reliability Provision" would give customers who lose power for 72-96 consecutive hours a 15-percent credit on their electric bill for that month and increased credits for longer outages.
 The "reliability" provision is one of several measures in the resolution which would assure that Consumers Power would invest more in the maintenance of its electric generating and transmission equipment.
 If the MPSC approves the proposed resolution, it would end eight years of litigation between these three entities in at least 21 outstanding MPSC and court cases. The disputes stem from financial difficulties Consumers encountered after abandoning construction of a nuclear plant in Midland in 1984 and the utility's contract to buy electricity from a gas-fired plant built in its place by Consumers.
 Consumers agreed to buy power from this Midland Cogeneration Venture for a price critics charged was too high compared to that charged by similar power plants. Critics, including ABATE, contended the MCV's price was artificially high because some of Consumers' lost nuclear investment was buried in the cost of the MCV.
 Numerous MPSC and court cases were filed to determine how much Consumers could charge its customers for its lost investment in the nuclear plant and for the power it bought from the MCV. Today's proposed resolution would result in ABATE, Consumers and the MPSC staff withdrawing from these cases and related court appeals.
 Other elements of the proposed resolution include:
 -- a 12-month freeze on Consumers Power's base electric rates, to be followed by a maximum rate increase of $20 million, about 1 percent, and then any other base rate change must await a full MPSC rate case review -- usually another 12 months;
 -- an outline for a competitive bidding program, which Consumers Power would implement the next time it needs additional electric generating capacity. The lowest cost bids from utility- and non- utility-owned power sources would be selected to supply the electricity;
 -- measures to prevent Consumers from giving undue advantage to the MCV or other affiliates in its future power purchase negotiations; and
 -- Consumers would be allowed to charge electric customers 3.77 cents per kilowatt hour for 1,053 megawatts of power from the MCV over a 30-year contract, not the 4.15 cents per kilowatt hour it agreed to pay the MCV for 1,240 megawatts of power.
 In addition, Consumers' parent corporation, CMS Energy (NYSE: CMS), and ABATE have agreed that CMS would reimburse ABATE for approximately $7.5 million of its legal costs related to the Midland disputes since 1983. CMS would not be allowed to charge that amount to electric customers in any way.
 "This joint resolution would resolve our past differences regarding Midland. It would create a more competitive market for electricity for all residents and businesses alike in the Consumers Power transmission area," said Roderick S. Coy, ABATE legal counsel.
 "These issues have been -- continue to be -- the subject of intense litigation before the MPSC and the courts. They've consumed vast amounts of time and resources. Without this resolution, we fear the issues will remain unresolved for several more years," Coy continued.
 The parties asked the MPSC to hold hearings on the proposed resolution so that all other parties to the cases can be heard. If the MPSC agrees, it could issue orders regarding approval of the resolution in early June.
 ABATE is a non-profit association of 30 major Michigan employers working to make the cost of the state's energy competitive with other states.
 -0- 3/3/92
 /NOTE: For an item-by-item description of all elements of the joint resolution, CONTACT: Roderick S. Coy or Hill Lewis of the Association of Businesses Advocating Tariff Equity, 517-484-4481/
 (CMS) CO: Association of Businesses Advocating Tariff Equity; Consumers Power
 Company; Michigan Public Service Commission ST: Michigan IN: UTI SU:


DH-SB -- DE026 -- 4673 03/03/92 17:06 EST
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Date:Mar 3, 1992
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