MARQUETTE –Upper Peninsula Power Co. customers are paying smaller bills this year.

During the U.P. Energy Summit at Northern Michigan University on Wednesday, Brett French, UPPCO’s vice president of business development and communications, said that UPPCO’s rates in January were between 6 and 24 percent lower when compared to rates in January 2017.

The typical bill for residential customers using 500 kilowatt-hours or less per month went from $120 to $113, while the bills for large industrial customers using 400,000 kilowatt-hours went from $44,915 to $34,323 — or about 5.8 percent and 23.6 percent, respectively.

French said the reductions are the combined result of renegotiated power supply contracts and an October 2017 Federal Energy Regulatory Commission case, in which the state of Michigan disputed the financial collection of $23 million in subsidies, or System Support Resource payments, by We Energies and its parent company WEC Energy Group relating to the operation of the Presque Isle Power Plant.

Additional customer savings will result from a Michigan Public Service Commission order relating to the Federal Tax Cuts and Jobs Act, French said, which cut the corporate tax rate from 35 percent to 21 percent.

UPPCO is one of 13 utilities ordered by the MPSC in December to estimate the amount of tax savings they are to receive and propose how those savings should be passed along to utility customers.

French said there are three filings required under the MPSC ruling, the first of which UPPCO submitted to the MPSC on March 30.

The net result of the first filing, if approved by the MPSC, would save a typical residential customer roughly $1.30 per month, officials have said.

French said the remaining filings required by the MPSC will both likely be processed in the third quarter of this year.

He said the company is also working on the Integrated Resource Plan, or IRP, required under Public Acts 341 and 342.

Under the IRP, French said additional company-owned electric generation is indicated and stakeholder outreach is planned. The plan is expected to be filed in the third quarter of this year.

Another area of concern for UPPCO has been estimated bimonthly bills, French said.

He said the decision to estimate bills for customers every other month was intended to reduce expenses, and “so that we can avoid up to $1 million of additional costs that would be required to send meter readers and vehicles out on a monthly basis,” French said. “But it’s not without its concerns when you look at it through the lens of our customers.”

French said the company has determined a number of benefits smart meters would provide for UPPCO customers.

“It would eliminate that bimonthly estimated value. We would no longer be dependent on those,” French said. “It would also equate to an increase in billing accuracy, which is very much of interest to us and our customers.”

The benefits would go beyond that by providing real-time information on power outages in the UPPCO coverage area.

“It would provide reliability benefits by giving us the ability to identify when and where outages are occurring on our system and then deploy our resources — our human and our vehicular resources very efficiently, and in a very timely manner,” French said. “And all of that equates to an enhanced customer service experience, which we are all very interested in achieving.”

UPPCO currently serves 52,000 customers in 10 U.P. counties, covering a service area of 4,460 square miles with 4,469 miles of lines and 58 substations.

Lisa Bowers can be reached at 906-228-2500, ext. 242. Her email address is lbowers@miningjournal.net.