JACKSON, Mich. — Consumers Energy has proposed a controversial plan to sell 13 hydroelectric dams to a private equity firm while simultaneously collecting an estimated $270 million in additional fees from ratepayers. The plan would include the Calkins Bridge Dam on the Kalamazoo River, one of 13 facilities slated for sale as Consumers looks to exit its unprofitable hydropower business.

Under the proposed deal, Consumers would sell each dam for $1 to Confluence Hydro, a subsidiary of Maryland private equity firm Hull Street Energy Partners. The utility would then purchase electricity from the new owner at a starting price of $160 per megawatt-hour, double the market rate for comparable hydropower, with an annual escalation of 2.5 percent.

"It would flip them from losing money a little bit each year on the dams to earning this incentive markup on their purchases of power from the dams," said Douglas Jester, an energy policy consultant who has submitted legal testimony critical of the sale on behalf of a coalition of conservation groups.

The deal structure includes what critics call a "financial compensation mechanism" that would allow Consumers to charge customers more than $270 million in addition to already elevated power costs. This mechanism is built into Michigan's renewable energy law and was intended to incentivize utilities to acquire competitively bid renewable power contracts.

"It would allow the utility to charge customers more than $270 million on top of the already elevated power costs in its proposed 30-year agreement to buy electricity from the dam's new owner," said the mlive article.

Consumers maintains the approach follows the law and ensures reliability for customers.

"This approach is not about profiting from the power itself, but about ensuring reliability and delivering long-term value for customers," said Brian Wheeler, a utility spokesperson.

Critics argue the plan represents dangerous precedent of utility double dipping after Consumers has already spent years extracting profits from customers on dam investments that were made over a century ago. Howard Learner, executive director of the Environmental Law and Policy Center, said the incentive turns the intent of the Legislature upside down.

"They're not earning any profit, because the dams at this point on their books have a negative value," Learner said. "But the sale would allow Consumers to create a windfall for itself through the incentive on the power purchase from the new owner."

The deal structure also raises concerns among conservation groups and state agencies. MPSC staff confirmed that the deal would not prevent Confluence from reselling or stopping operations on the dams without state approval. Daniel Abrams, an attorney with ELPC, noted that Confluence has historically been a dam-flipping company rather than one committed to long-term ownership.

"Historically, they've been a dam-flipping company rather than one to retain dams," Abrams said.

The 13 dams include facilities on the Kalamazoo, Grand, Muskegon, Manistee, and Au Sable rivers. The Calkins Bridge Dam on the Kalamazoo River is among the facilities being sold. Consumers says the deal preserves upstream impoundments that fuel local tourism and outdoor recreation economies.

The Michigan Public Service Commission, a three-member board appointed by the governor, will decide whether to approve or reject the transaction and the built-in incentive. Consumers has stated it will not accept modifications to the deal and will proceed with removing the dams if commissioners reject the sale.

Local governments and lake associations have largely supported the sale, arguing it's the only realistic path to preserving reservoirs and lakefront value. However, the DNR has expressed concern about water temperature issues on the Muskegon, Manistee, and Au Sable rivers that could create hurdles during relicensing.

Testimony from business consultant Sebastian Coppola submitted by the Michigan Attorney General's Office found that residential electric bills could be discounted $155 over the next 10 years if the transaction proceeds. However, ABATE, representing large industrial customers, argued the sale is far more expensive than decommissioning or relicensing under adjusted modeling assumptions.

"There is certainly a financial play here where the utility is looking to generate some revenue," said Rod Williamson, ABATE's executive director. "While it likely meets the letter of the law, it certainly doesn't meet its intent."

The dams were constructed between 1906 and 1968, with federal licenses expiring in 2034 or later. At least two facilities face significant capital needs, including approximately $124 million in projected spillway work at Rogers Dam.

"Historically, they've been a dam-flipping company rather than one to retain dams," said Daniel Abrams, attorney with ELPC.

The case is pending before administrative law judge James Varchetti, who will make a recommendation to the MPSC later this year. The commission will evaluate whether the proposed contracts are prudent, cost-effective, and protect ratepayers compared to alternatives.

Sources:

  • https://www.mlive.com/environment/2026/04/old-dams-new-profit-consumers-energy-could-net-270m-from-hydro-sale.html
  • https://www.mlive.com/environment/2026/02/hydro-deal-would-let-buyer-flip-consumers-energy-dams-testimony-warns.html