'The best choice': Consumers Energy defends planned sale of dams to private equity firm

LANSING, Mich. — Thirteen hydro-electric dams across Michigan could soon be under new management, but the sale faces stiff opposition for all kinds of reasons.

Consumers Energy is seeking approval for the transfer of their dams to private equity firm Confluence Hydro.

They generate less than one percent of the company’s electricity, but critics of the sale say there’s a lot more at stake.

Confluence would pay just $13, a dollar for each dam, and Consumers will buy back the electricity the dams make in exchange for $160 per megawatt hour over 30 years.

“We want to make sure we’re providing energy at the best price for our customers,” Brian Wheeler, a spokesman for Consumers Energy, said. “As we looked at our alternatives, the best choice is to sell the dams.”

This week, Gov. Gretchen Whitmer joined a long list of voices urging the Michigan Public Service Commission to reject the sale.

Whitmer worries about safety, with dam failures in at the Edenville and Sanford dams and at-risk dams in the Upper Peninsula and Cheboygan — all privately owned.

She also agreed with an administrative law judge, who says the price is too high, and staff at multiple state agencies, including the MPSC, who recommend a denial.

“The dams are located on five iconic Michigan rivers and so the sale impacts the future of those rivers,” Katie Duckworth, a staff attorney at the Environmental Law & Policy Center, said.

Duckworth represents a coalition of fishing and conservation groups opposed to the deal.

“We believe that the ultimate goal should be better solutions than this proposed sale for each of the 13 dams individually, which are on five different rivers with different biological and fisheries considerations in different communities and require different repair costs for dam safety,” she said.

Consumers says its dams are safe, and that Confluence is experienced enough to maintain them, though the utility proposed a $270 million dam safety fund to assuage concerns.

Critics also worry a sale would end the state’s regulatory authority over the dams, and that public land around the dams could close.

“We structured the deal in a way that’s gonna really motivate them to continue to make those investments to upgrade dams in the future,” Wheeler said.

If the sale is denied, however, the future of the dams isn’t bright, according to Wheeler.

“Our next and most affordable step is to decommission, which means to remove the dams themselves,” he said.

When asked whether state had a plan if the deal does not go through, the governor’s office referred only to her letter.

The MPSC is expected to make a decision sometime in September.

The agency couldn’t comment on the governor’s letter or the case itself, but said its findings are based on law, evidence and testimony.