LANSING, Mich. — Consumers Energy (NYSE:CMS), the state’s largest investor-owned utility, has warned it may drop its plans to close its remaining coal-fired power plants by 2025 unless the state’s Public Service Commission ensures it can recoup both the generation and revenues lost through those closures using gas-fired plants.

In a filing responding to a proposed decision presented to the PSC by Administrative Law Judge Sally Wallace on the company’s integrated resource plan, Shaun Johnson, general counsel for Consumers’ parent company CMS Energy, said that “without adequate assurance of cost recovery related to the early retirement of its remaining coal generating plants and without an adequate plan to replace the capacity and energy derived from those plants, [parent company] Consumers Energy will run those plants until their previously planned retirement dates, keeping Consumers Energy and Michigan reliant on coal for nearly two decades.”

Consumers can do that, Johnson said, because the Michigan law on utility IRP filings also allows utilities to “not accept a commission order in an IRP proceeding. And for that reason, the company is filing these exceptions to make clear that there are certain core principles to the plan — principles that the proposal for decision rejected and modified — that must be resolved to the company’s satisfaction in order to see the company accelerate its coal fleet retirement.”

The warning has raised alarms among environmental groups, which had also criticized Consumers’ IRP for the continued use of gas-fired generation, and comes at the time when the state’s Council on Climate Solutions will hold its final scheduled meeting before issuing the state’s proposed plan to go carbon neutral by 2050.

Consumers filed its IRP on June 30, 2021. In the proposal it called for closing the Karn coal plant in Exxeville in 2023, and all three units of the Campbell Generating Plant in West Olive by 2025. It had previously planned to close the Campbell plant by 2039. The IRP also called for replacing the lost generation with new renewable resources and gas plants, including plants it would acquire.

Wallace’s proposed decision calls for the commission to approve closing Karn and Campbell Units 1 and 2 as proposed. But it called for delaying closing Campbell Unit 3, the plant’s largest, for more analysis into its potential effect on availability. Wallace also urged the commission to reject the utility’s plan to purchase three natural gas plants from its subsidiary.

Under state law on IRPs, the PSC must make a decision within 300 days of when Consumers first filed its plan. While the commission took comments on the proposed decision until Monday, no further public hearings will be held on the issue before it rules.

The proposal to delay closing Campbell 3 led environmental groups to object. The Sierra Club, Michigan Environmental Council and the Natural Resources Defense Council joined in one objection, urging the PSC to approve closing Campbell 3 by 2025, calling it the “most forward-looking” item in Consumers’ initial proposal.

In Consumers’ objection to the proposed decision, Johnson said, “Without an actionable capacity plan using existing generating units to replace the retiring capacity in 2025, and without certainty on recovery of a reasonable return on the unrecovered book balance of the retired units, the entire plan falls apart. …

“Michigan will face a lost opportunity to expedite its transition to clean energy, reduce emissions, increase reliability and lower energy costs,” Johnson said. “That would mean no accelerated coal retirements … and no expanded solar buildout. That is not an outcome Consumers Energy wants to see. And we believe it is not an outcome the state of Michigan and this commission wants to see.”

Tim Werner, a Traverse City Commissioner and member of the city’s Board of Light and Power, said the threat to hold off closing the coal plants poses a risk to Michigan meeting a goal of carbon neutrality by 2050. “It would maybe not be impossible, but so difficult” to reach if the plants remained open until nearly 2040, he said.

Traverse uses electricity generated by the Campbell plants, and while city officials and residents would like the plants shuttered to boost renewable resources, Werner also recognized the complexities of reaching a decision. While many environmentalists are pushing for no natural gas in reaching carbon neutrality, Werner said that a compromise may be necessary to get the Karn and Campbell plants closed by 2025. That could include letting Consumers own and run the gas plants for a set number of years before closing them as more renewables come online.