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.