Like many utilities, Consumers Energy is at the beginning of a decades-long transition that will fundamentally change the way electricity is generated. Utilities are gradually replacing large, centralized coal plants with more distributed resources like wind and solar along with battery storage. Consumers announced in February a target to reach net zero carbon emissions by 2040. Its broader long-term Clean Energy Plan was announced in 2019 under former CEO Patti Poppe, who this month started a new job leading California’s largest utility, PG&E. The reins have been passed to new President and CEO Garrick Rochow, who’s been with the Jackson-based utility for 16 years, most recently as senior vice president of operations.
How have your duties changed since taking over as CEO, and what are some of your first priorities?
Patti and I worked side by side through much of her leadership. Our business workings of the company as well as strategy is real solid. One priority is spending time with the investment community first to make sure we have a steady transition and ensuring we deliver on our ambitious clean energy goals. Another fingerprint is in the area of operational excellence — we’ve made great strides under Patti’s leadership. The third piece where I’m going to have leadership is on diversity, equity and inclusion. We’ve made great strides in this space over the years, but certainly the events of 2020 really suggest that more needs to be done.
You have West Michigan roots, working for the Holland Board of Public Works in the late 1990s and early 2000s. How has the utility business changed in that time?
I started in coal plants, and this is a little bit of legacy for me. My dad worked nearly three decades for Consumers Energy. He came in in the ’70s, (which included) the Clean Air Act and Clean Water Act. Those were pretty substantial changes to how companies operated and frankly how environmental policy was being set across the nation. For a time, it was all about coming into compliance — that was my dad’s role.
Fast forward to the late ’90s and early 2000s when I came into the company: We’re still generating much of our energy with coal, but we learned even in two short decades the impact of climate change and CO2 in the environment. We had 12 coal plants at one time. Now it’s down to five, and two of those retire in 2023. The three coal plants remaining are in this window of 2040, but are those retirements accelerated? Over 20 years, we’ve seen a dramatic shift in how we think about energy.
For Consumers or large utilities in general, what are going to be the biggest challenges to hitting those emission targets?
We have these net zero commitments that require us to build out about 6,000 megawatts of solar between now and 2040. We’re familiar with building out stuff, the challenge is how do we ensure the reliability of the grid in that time period.
How long until battery storage is more widespread and can be paired with intermittent renewables?
Prices need to improve; they’re not where they need to be. We have lithium-ion storage on the grid now, most of it in trials or pilots. We’ll be growing that over the next five to 10 years. I don’t envision until at least the 2030 timeframe we’ll see more large-scale lithium-ion storage.
Consumers Energy faced criticism — particularly from clean energy advocates — about its position on distributed generation. What’s your response to claims that Consumers supports large-scale projects but doesn’t want to incentivize customer-owned installations?
We’re very much aligned with enhancing and encouraging solar in the state. It’s evident in our Integrated Resource Plan and our actions. When we see solar that’s on a home, sometimes that is two to three times the cost of solar at scale. We want to make sure that affordability is part of the equation. Right now, the distributed generation approach subsidizes much of that cost. We want to avoid the subsidy piece of this.
With Commissioner Sally Talberg leaving this month, the Michigan Public Service Commission will have had a new three-member slate since Gov. Whitmer took office. How does that new regulatory makeup affect the industry?
We’ve got a great group of commissioners up there. It starts with the governor’s office and the commitment to decarbonize by 2050. We also recognize the commission is preparing for the future much like we are. We want to make sure it’s safe, affordable, reliable but also clean. There’s this general alignment that we’re all working toward those things.
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