- Gov. Gretchen Whitmer has formally opposed Consumers’ planned sale of 13 hydropower dams to a private equity firm
- Citing the 2020 Midland dam failures, recent April floods and a privately owned UP dam, Whitmer says private owners compromise public safety and impose costs on taxpayers
- The proposed buyers have said they would maintain the dams long-term
Gov. Gretchen Whitmer has formally opposed Consumers Energy’s planned sale of 13 hydropower dams to a private equity firm, joining a growing chorus of voices saying the deal would put taxpayers and potentially lives at risk.
In a letter to the Michigan Public Service Commission, which will soon rule on the sale, Whitmer cited the 2020 failure of multiple dams near Midland, the near-failure of the Cheboygan Dam during widespread flooding this spring and the crumbling Au Train Dam in the Upper Peninsula as proof that “private dam owners have too often compromised public safety and imposed extraordinary costs on Michigan taxpayers.”
Consumers, meanwhile, expressed “disappointment” with Whitmer’s letter to the commissioners.
“The record in the MPSC process includes extensive evidence showing (potential buyer) Confluence Hydro is an experienced, capable owner and operator, and not like the owners of the dams referenced in her letter,” Consumers spokesperson Brian Wheeler said in an email to Bridge Michigan. “The proposed sale includes a number of safeguards to ensure the long-term safety of the dams, which directly address the concerns noted by the Governor. Even with this new letter, we have yet to see any proposal from the State that offers a reasonable path forward to keep the dams in place.”
“Confluence Hydro has a proven track record of safely owning and operating dozens of hydroelectric power facilities, and safety is a core part of our mission and values,” Confluence said in a statement. “Confluence Hydro has demonstrated it has the financial capabilities and technical expertise to safely provide clean, reliable energy at 13 hydroelectric dams long into the future.”
Consumers plans to sell 13 dams throughout Michigan to Confluence Hydro for $1 apiece and then buy back the energy the dams produce at twice the market rate. The utility says that is the cheapest option for ratepayers because it would save Consumers customers from paying for costly repairs or for decommissioning the aging dams.
Confluence Hydro has said it plans to invest in the dams long-term.
Consumers has said it would seek to decommission and tear down the dams if the sale isn’t approved. While that would be welcome news to many environmentalists concerned about the warmed water and disrupted fish habitat caused by the dams, it would be unwelcome to the communities — and economies — that have sprung up on the “lakes” behind the dams.
“If the deal with Confluence is not approved, the State will be faced with the reality of the permanent impacts to these communities going forward,” Wheeler said.
“The dams are also a vital part of Michigan’s ecosystem, serving as an important barrier to manage the spread of invasive species like sea lamprey, which could devastate Michigan’s waterways and fishing industry if the dams are torn down,” Confluence said in its statement.
Nonetheless, several outside groups and Michigan agencies, including the Public Service Commission’s staff and Michigan Attorney General Dana Nessel, have opposed the sale — at least without conditions that would require Confluence to bear the burden of the cost of repairs.
Earlier this summer, an administrative law judge recommended the commission reject the sale, saying it was “inconsistent with the public interest.”
Afterward, Consumers made a concession: It said it would divert some $270 million in profits it would make from the sale to a safety fund to aid with upkeep of the dams.
Critics were nonplussed, as was Whitmer, who wrote in her Thursday letter to the commission that the safety fund was “too little, too late, and too difficult to access — leaving the Fund unable to prevent near-term safety failures or reliably cover the dams’ enormous long-term costs.
“In short,” Whitmer wrote of the proposed sale, “this deal allows the private equity firm and its investors to capture the financial benefits while nearby residents and Michigan taxpayers bear much of the long-term risk.”
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