Upper Peninsula lawmakers, utilities and employers urge legislative fix to protect RICE generation and avoid sharp rate increases

Lawmakers and stakeholders from Michigan nd the Upper Peninsula told the House Committee on Energy on March 4 that new clean-energy requirements would force the early retirement of recently built reciprocating internal combustion engine (RICE) generators and could impose millions in new costs on UP residents and businesses.

Representatives sponsoring the bills described House Bill 4007 as legislation to ensure the 13 RICE units in the Upper Peninsula can remain online through their designed life and to allow the engines to be used to comply with renewable-energy requirements. The sponsors said the units were installed after coal-fired plants closed between 2013 and 2019 and were intended to provide locally dispatched, reliable capacity sized for regional demand.

Valerie Bridal, who said she led Michigan—nergy policy in the Snyder administration and now practices as an energy attorney and consultant, told the committee that RICE engines were chosen after studying alternatives because they are right-sized, faster to deploy, dispersed geographically for reliability and reduced carbon emissions by roughly 70 percent compared with the coal capacity they replaced. "The solution we came to is the one in place today, a bunch of small natural gas units in multiple locations," Bridal said.

Municipal and utility witnesses described the reliability and operational benefits. Tom Carpenter, executive director of the Marquette Board of Light and Power, said the municipal utility invested $63 million to build a modern generating facility that has kept rates stable and reliability improved; he said the engine plant has allowed the utility not to raise rates in nearly a decade. Pat Schillinger, vice president of legislative affairs for Upper Michigan Energy Resources Corporation (UMERC), said unit flexibility is essential: the RICE units can start and stop within three to five minutes and have prevented regional reliability events.

Cleveland-Cliffs and United Steelworkers local leaders said the Tilden Mine and related manufacturing depend on affordable, dispatchable power. Ryan Korpola, general manager of Cleveland-Cliffs t Tilden Mine, said Tilden consumes about 1,100,000 megawatt-hours of electricity per year and that energy represents roughly 25 percent of the mine's cost structure. He testified that UMERC estimates the mine would face nearly $16 million in increased costs in 2027 from surcharges and that incremental surcharges could peak in 2040 at roughly $182 million annually for industrial customers.

Union leaders said those costs would jeopardize thousands of direct and indirect jobs tied to iron-ore production and supporting firms. Dan Rockelainen, president of United Steelworkers Local 4950, said the region would suffer severe community impacts if the mine's costs rise substantially. "If the amendment isn't adopted or considered, I believe this will have detrimental effects in the place of work that we have also within our community," Rockelainen said.

UMERC and other witnesses told the committee the Michigan Public Service Commission (MPSC) completed a UP Energy Report (executive summary released in December) that concluded the statute as written limits the commission's authority and that a legislative change is the most direct option; the report also identified alternatives such as significant transmission build-out or demand reduction. Pat Schillinger said UMERC's compliance analysis estimates more than $3 billion in required investment through 2040 to meet the current statutory requirements, with heavy cost impacts for the utility's roughly 37,500 customers.

Supporters said the bills are not a broad rollback of clean-energy goals but a narrowly tailored recognition of the UP's unique grid topology and the investment made to replace coal-fired plants. Opponents were not recorded in the hearing transcript; the committee received written testimony and many attendees provided in-person testimony urging consideration of the region's economic and reliability circumstances.

Ending: Committee members said the testimony would be considered as they move the bills through committee; stakeholders were encouraged to submit additional written material and contact members during the committee—reak before further action.