Consumers Energy to Create $270M Hydro Safety Fund to Help Preserve Dams’ Long-Term Future

Consumers Energy and Confluence Hydro today provided an important update to the sale of Consumers Energy’s 13 hydroelectric dams.

Consumers Energy is offering a new $270 million Hydro Safety Fund to protect Michigan communities in case of unforeseen safety issues after Confluence Hydro takes ownership, and Confluence Hydro is providing other significant commitments.

The proposed fund supplements other existing measures that will enable continued safe operations of the dams under Confluence Hydro. That includes a long-term power purchase agreement that provides Confluence Hydro with steady revenue to invest in the dams. The existing Consumers Energy hydro workforce will transition to Confluence Hydro, ensuring the experienced team responsible for safely operating and maintaining the dams today continues to support the facilities and surrounding communities. The fund is among the updates that both companies are offering to state regulators to address public questions about the sale.

“Consumers Energy has found an experienced, responsible and safe new owner for these dams in Confluence Hydro. This safety fund directly addresses concerns some have raised about the future of the dams,” said Chris Fultz, Consumers Energy’s senior vice president of electric supply. “We have heard and understand these concerns, and this filing reflects our commitment to demonstrating good faith and accountability.”

The Michigan Public Service Commission is reviewing the proposed sale, which will keep the dams in place for the next generation, providing benefits to neighbors and all Consumers Energy customers. If the sale is not approved, Consumers Energy will decommission the dams. This would include removing the dams and draining the reservoirs, which would alter the waterfront landscape as it exists today.

At the same time, a new statewide survey shows strong support for Consumers Energy’s sale of 13 hydroelectric dams to Confluence Hydro.

The survey of 600 Michigan residents by Washington, D.C.-based polling firm GQR found 63% of Michigan residents support selling the dams. That support increases to 67% for voters living in counties with a Consumers Energy dam.

The updates that Confluence Hydro and Consumers Energy offered today to the regulatory case include:

• Consumers Energy will provide up to $270 million in shareholder dollars to create a Hydro Safety Fund to help protect the state in case of long-term safety issues that may unexpectedly arise with the dams. The company would provide shareholder dollars that it would otherwise receive from the sale to the State of Michigan. The state would administer the fund.

• Confluence Hydro will institute a community engagement plan focused on proactive and productive conversations with local communities and will provide a robust suite of related recreational and conservation programs.

• Confluence Hydro will also commit not to reduce land in forthcoming relicensing processes unless doing so serves public interests and is informed by thorough stakeholder consultation.

“Since announcing the sale last year, Confluence Hydro has participated in a series of public meetings and met with dozens of community leaders and policymakers. Time and again, residents shared how valuable these dams and their recreational and conservation benefits are to local communities,” said Jillian Lawrence, chief operating officer of Confluence Hydro. “We’re excited to continue the legacy of these dams and maintain the high standards for community engagement and public access that Consumers Energy has set.”

The new updates reinforce strong support across Michigan for the dams’ sale, including resolutions of support from local governments and organizations. Those include Oscoda Township, Develop Iosco, Iosco County, Wexford County, Allegan County and Allegan Township.

The GQR survey, conducted May 23-28, also found respondents deeply value the benefits dams provide, with nearly 60% saying they have a favorable view of the dams. Respondents also showed strong support for hydroelectric energy with 77% saying it is their preferred energy source.

“At a time when many issues are polarized along partisan and demographic lines, the dam sale between Consumers Energy and Confluence Hydro stands out for its broad support,” said John Barry, senior associate at GQR. “Michiganders want to preserve dams that provide clean, renewable energy, support local communities and create opportunities for recreation.”

GQR conducted the survey through phone calls and texts to 600 Michigan residents, with an additional oversample of 200 registered voters in nine counties with hydroelectric dams including Alcona, Allegan, Ionia, Iosco, Manistee, Mecosta, Newaygo, Oscoda and Wexford.

Consumers Energy is Michigan’s largest energy provider, providing natural gas and/or electricity to 6.8 million of the state’s 10 million residents in all 68 Lower Peninsula counties. We are committed to delivering reliable and affordable energy to our customers 24/7. Learn more at ConsumersEnergy.com.

Confluence Hydro leverages its extensive experience, deep technical knowledge and innovative mind-set, coupled with a data-driven approach, to transform legacy hydroelectric dams into clean, efficient assets built to power our modern economy. Confluence Hydro is an affiliate of Hull Street Energy, LLC, a U.S. investment firm focused on deploying capital in the U.S. power sector as it decarbonizes and grows. For more information, visit ConfluenceHydro.com.

Image from Consumers Energy.