An estimated 600 Michigan businesses are expected to benefit annually from a new policy established by Consumers Energy in Jackson. Before the new policy, customers would pay a deposit for providing electric infrastructure — such as power lines — prior to construction and then receive refunds in future years. Under the new policy, the fee will either be reduced or eliminated depending on a business’ expected revenue.
Utility officials say that as a business’ projected revenue is typically sufficient to cover the cost for the electric infrastructure, and the up-front deposit is likely to be eliminated entirely.
Brian Wheeler, spokesman for Consumers Energy, says general business customers — retail stores, farms, hotels, or big box stores — have electric needs that are far more significant than the average homeowner.
“Asking a business to make an expenditure up front can affect whether or not (a company) decides to open a facility or to expand,” Wheeler says. “We think that removing some of the up-front costs gives them one more reason to do business up front.”
The new policy comes a few months after a similar policy was established for larger-sized electric businesses that require infrastructure that supports the delivery of an additional one-megawatt or more of electricity. One company that has already benefitted by this policy change is Norplas Industries Inc., which is building a 290,000-square-foot manufacturing facility near Lansing. The robotic paint line and injection molding process operation is expected to create 300 jobs in early 2014.
“The first policy that took effect affected a smaller number of customers,” Wheeler says. “A large-scale manufacturer doesn’t open up every day. We were happy to expand this to affect all business customers.”
Consumers Energy is taking this new approach with business customers at the suggestion of the Michigan Economic Development Corp. Consumers Energy already partners with the MEDC in the Pure Michigan Business Connect, pledging to support the state’s economy by increasing its spending with Michigan companies by $1 billion through 2016.