An administrative law judge has recommended that Michigan regulators reject Consumers Energy’s plan to sell its 13 Michigan dams to an out-of-state private equity firm, concluding in a 312-page recommendation that the deal “is inconsistent with the public interest,” “highly problematic” and “unreasonable and imprudent.”
Judge James Varchetti, who spent months gathering evidence and testimony from Consumers Energy and interest groups that support and oppose the sale, wrote that the transaction threatens public safety and may not be the cheapest option for ratepayers. The recommendation, issued Wednesday, goes to the Michigan Public Service Commission, which will make the final decision.
“For a transaction involving infrastructure like major hydroelectric dams to be in the public interest, it would be a transaction that ensured the new owner is financially committed and able to meet the dam’s full lifecycle needs, thereby protecting taxpayers from assuming future liabilities such as decommissioning costs,” Varchetti wrote. “This transaction fails that test.”
The proposed sale has drawn scrutiny from state officials and consumer advocates concerned about transferring ownership of critical infrastructure to a private equity firm headquartered outside Michigan. Attorney General Dana Nessel has previously opposed the deal, and Gov. Gretchen Whitmer’s administration has raised questions about its impact on public safety and ratepayer costs.
The Michigan Public Service Commission is expected to consider Varchetti’s recommendation in the coming months. The commission is not bound by the judge’s finding but typically gives significant weight to administrative law judge recommendations.