Consumers Energy seeks FERC OK to postpone Hardy Dam spillway replacement
Consumers Energy has asked the Federal Energy Regulatory Commission for permission to push back the start of a major flood-control project at Hardy Dam in Michigan as the utility works to sell the dam and 12 other hydroelectric facilities to a private company. The request, filed March 16, seeks to delay the $350 million replacement of the spillway at the 120-foot dam on the Muskegon River, with construction start moved to Dec. 31, 2028.
Consumers Energy told regulators that beginning the project now would not be practical while it awaits approvals tied to the proposed transfer. In the extension request, the company said it is “neither feasible nor prudent” to start the Hardy Dam spillway work as it pursues the sale plan and waits for regulatory action connected to that transaction.
The utility’s filing comes as Consumers originally planned the Hardy work for earlier schedules. Consumers first pitched the broader project in 2022, with construction slated to begin in 2023 before it moved to 2025, and now the company is seeking another delay.
Consumers hydropower chief Adam Monroe wrote in the extension request that the “requested two-year delay allows time for review and approval of the proposed sale and time for the new licensee to coordinate construction activities.” Under the sale plan, the company’s maintenance responsibilities would shift to Confluence Hydro, a subsidiary of Maryland private equity firm Hull Street Energy.
Opponents of the sale and delay argue that putting off the spillway upgrade could increase risk for communities downstream. They say the Hardy Dam’s flood-related capacity issues, combined with a planned time shift for construction, could leave the area more exposed than federal standards require.
The spillway replacement is intended to bring Hardy Dam into compliance with federal flood control requirements for high-hazard hydropower dams. Those standards require dams to be capable of passing the probable maximum flood—the largest flood possible for the surrounding area. The filing also reflects the fact that the federal regulator has recently upgraded its flood estimates, and that Hardy does not meet the resulting mark.
Michigan Hydro Relicensing Coalition executive director Bob Stuber said he opposes the delay, saying, “I just don’t think it’s anything that Consumers should roll the dice on.” Local dam safety officials offered a more limited view of near-term risk. Luke Trumble, dam safety chief with the Michigan Department of Environment, Great Lakes and Energy, said it would take a “very, very big flood” to overwhelm the dam.
Trumble said it remains a concern in principle when a dam should be designed to pass the maximum flood but cannot meet that requirement, while also adding that there are “varying degrees of concern.” The dispute over how to weigh those degrees has become part of a broader debate over Consumers’ plan to sell its 13 dams in Michigan’s river basins.
The sale plan, which Consumers unveiled last fall after years of considering whether to keep, sell or decommission the dams, has pitched the transfer as a way to maintain reservoirs while addressing large maintenance and repair costs. The dams generate about $12.9 million-worth of power annually and face “hundreds of millions” in repair and maintenance expenses, according to the reporting. State utility regulators have hesitated to let Consumers pass those costs to ratepayers who derive limited benefit from the assets.
Consumers’ proposal would essentially transfer the facilities to Confluence Hydro and then have Consumers buy back the power under a 30-year contract priced at about twice the market rate—at $160 per megawatt-hour plus a 2.5% annual increase. The company says the sale should provide the buyer enough support to upgrade and relicense the dams for additional decades, with Hardy’s current power generation license expiring in 2035.
Nearby communities have supported the idea, arguing the reservoirs underpin local recreation and business activity. Morgan Heinzman, supervisor of Croton Township downstream of Hardy Dam and upstream of Croton Dam on the Muskegon River, said the reservoirs are economically and practically tied to the area, adding that “probably none of them would survive” without the dams.
Others have criticized the plan for safety oversight concerns, including whether a more lightly regulated private operator can be trusted to maintain large impoundments. The debate over safety upgrades has also drawn attention to cost allocation for the Hardy spillway work: Consumers has described the upgrades as a “critical need,” saying that without them federal regulators would likely revoke Hardy’s license and that a major flood could destroy the dam.
Consumers estimated the spillway replacement cost at $350 million and told utility regulators it “cannot reasonably — and will not — make the investments” unless it can charge ratepayers. Confluence Hydro, according to Consumers’ framework for the sale, would take on the work using money from the 30-year contract with Consumers, and the company has said the timeline would depend on federal approvals.
The disagreement extends to interim risk-reduction measures while the project remains on hold. Consumers spokesperson Brian Wheeler said the company has implemented a “suite of remedial risk reduction measures to address the flood risk,” including lowering the water level behind the reservoir by 12 feet from November to late May, and then raising levels before Memorial Day, the unofficial start of summer boating season. Heinzman said he is comfortable with those measures, telling Bridge Michigan he is “not worried about that dam at all” and that Hardy has “survived a lot of pretty tough rains over the years.”
The coalition opposing Consumers’ approach said it would ask federal regulators to require a year-round drawdown until spillway capacity issues are resolved. Stuber said many of the region’s biggest floods have occurred outside Consumers’ November-to-May drawdown window, arguing the interim operating window may not match the most severe conditions.
Attorney General Dana Nessel’s office has also weighed in, urging the Michigan Public Service Commission not to permit increases tied to the deal if the spillway project runs over budget. Her spokesperson, Danny Wimmer, said Nessel will request a commission order for the spillway project to be completed quickly, with transparency about who is paying, adding that allowing Confluence to raise the power price for overruns would amount to giving the buyer a “blank check” from Consumers Energy customers.
Confluence Hydro has maintained that it can carry out improvements on time and within regulations, with spokesperson Natalie Joubert saying, “Confluence Hydro is proud of our long and proven track record of successfully managing improvement projects at hydroelectric dams on schedule, on budget and in compliance with all regulations.” Joubert said it is not known when the project would begin because it requires federal regulatory approval.