Michigan should reject Consumers Energy’s plan to sell its 13 Michigan dams to an out-of-state private equity firm, an administrative law judge overseeing the proposed sale concluded Wednesday.In a 312-page recommendation to state regulators who will ultimately decide whether to approve the sale, Judge James Varchetti wrote that the deal “is inconsistent with the public interest,” “highly problematic” and “unreasonable and imprudent.”Varchetti, who has spent months gathering evidence and testimony from Consumers and interest groups that support and oppose the sale, concluded that the transaction threatens public safety and may not be the cheapest option for ratepayers.“For a transaction involving infrastructure like major hydroelectric dams to be in the public interest, it would be a transaction that ensured the new owner is financially committed and able to meet the dam’s full lifecycle needs, thereby protecting taxpayers from assuming future liabilities such as decommissioning costs,” Varchetti wrote. “This transaction fails that test.”
The advice comes nine months after Consumers first proposed selling its aging dams in the AuSable, Grand, Kalamazoo, Manistee and Muskegon rivers to a Maryland-based private equity firm for $1 apiece, then inking a 30-year contract that would obligate the company’s 1.9 million ratepayers to buy back the power at twice the market rate, plus pay a $270 million profit to Consumers.
