LANSING, MI – Michigan regulators have rejected an Upper Peninsula utility’s plan to add escalating charges to electric bills to pay for renewable power, finding it was unreasonable and went above what was required.

The proposal from Upper Michigan Energy Resources, or UMERC, would have imposed daily, per-meter surcharges on its 37,500 customers.

For residential customers, the charges would have totaled nearly $6 a month in 2026. They would have shot up to almost $60 a month in 2030 and close to $75 a month in 2045, according to utility filings. A major U.P. iron mine would have faced thousands in immediate daily charges, eventually escalating to millions each month.

Republicans in Lansing have repeatedly cited the hefty sums as they argued for U.P. carveouts to state clean and renewable energy standards this year. Environmentalists say the rejection weakens their case, but the lawmakers remain undeterred.

“UMERC filed a renewable energy plan that was deeply flawed and completely unrealistic,” said Charlotte Jameson, chief policy officer with the Michigan Environmental Council, in a statement.

“The utility tried to game the system and put astronomical and unnecessary costs onto its customers in order to cast our clean energy laws in a bad light with the legislature,” she said.

The charges stem from the utility’s plan to comply with 2023 standards passed by Democrats and signed by Gov. Gretchen Whitmer to ramp up reliance on renewable energy. UMERC pegged total costs to do so at $4.3 billion through 2045, funding a combination of wind, solar and battery installations.

The law requires utilities to hit 50% renewable power by 2030 and 60% by 2035, while meeting separate 100% “clean” energy standards by 2040.

But UMERC’s costs for complying with the renewable energy benchmarks were “excessive and unprecedented,” consumer watchdogs argued in legal testimony.

“No other utility in Michigan’s history has ever proposed such large (renewable energy plan) surcharges,” wrote attorneys for Michigan Attorney General Dana Nessel’s office and the nonprofit Citizens Utility Board of Michigan in a filing opposing the plan.

Regulators with the Michigan Public Service Commission ultimately agreed the costs were too much, saying the plan went “well beyond” what was required. They sent UMERC back to the drawing board via an order issued at a meeting in Lansing Thursday, Dec. 18.

The utility will have to refile a plan by Oct. 15, 2026.

UMERC spokesperson Brendan Conway said the utility, a subsidiary of Wisconsin-based WEC Energy Group serving 37,500 U.P. customers, was “disappointed” at the rejection, but it would comply with the order.

“Our plan attempted to address the significant challenges complying with Michigan’s renewable requirements in the Upper Peninsula and reflects our customers’ feedback,” he said in a statement.

The bill surcharges had become a political flashpoint in Lansing.

GOP lawmakers said they spelled nothing short of financial ruin in a region already burdened by high energy costs. “We are looking at the end of the U.P, and the U.P.’s economy as we know it,” said state Rep. David Prestin, R-Cedar River, at a Novemberpress conference.

Earlier this year, he and fellow U.P. lawmaker Rep. Karl Bohnak, R-Deerton, authored bills that would effectively excuse UMERC from meeting clean and renewable energy standards in the coming years.

The bills, HB 4007 and 4283, passed the House with bipartisan support but have not moved ahead in the Democratically-controlled Senate.

Initial versions classified natural gas-burning power stations UMERC owns, known as RICE units, as “clean” and “renewable.” Natural gas is usually considered neither of the two. It is a fossil fuel composed primarily of methane, a potent greenhouse gas.

Now, amended versions of the bills would provide UMERC the chance to skip demonstrating compliance with clean and renewable standards altogether until 2050, provided it maintains a 15% renewable portfolio.

UMERC’s 10 RICE units, placed in service in 2019, plus three more run by Marquette’s municipal utility, enabled the U.P. to stop burning coal to generate electricity more than a decade before the rest of the state, dramatically cutting emissions.

They also provided a solution to an energy crisis that left Yoopers paying millions through power bills to keep aging coal plants online.

But Republicans argue the state’s clean energy standards will force the RICE generators into early retirement. UMERC also takes this position, and its renewable energy surcharge cost modeling was based partly on this assumption, according to its filings.

GOP lawmakers have repeatedly cited the utility’s renewable surcharge cost estimates, with Prestin warning they meant “devastating energy poverty” in the U.P.

UMERC executives themselves testified in support of the legislators’ bills when they were introduced.

“These costs would be highly detrimental to our customers and damaging to the economic wellbeing of the U.P.,” said UMERC Vice President for Legislative Affairs Patrick Schillinger at a Marchhearing.

The renewable energy plan also brought large daily charges for businesses and the Tilden Iron Mine, which makes up more than half of UMERC’s power demand.

The mine’s surcharge would start at nearly $14,500 a day in 2026 and rise to nearly $150,000 a day in 2030, per utility filings. Such costs would put the mine in danger of closing, its owners warned.

But following regulators’ rejection of the surcharges, supporters of the state’s renewable energy standards say there’s no need for the kind of legislative carveout Republicans have proposed.

“Now that those costs have been sent back, I think it really showcases that there’s not a need to overreact,” said Ben Poulson, state government affairs director for the Michigan League of Conservation Voters.

Environmental groups had long criticized the costs as unrealistic and using them as motivation for the legislation is “in bad faith,” Poulson said.

Prestin remains undeterred.

In a statement to MLive, he reiterated his position that the law requires utilities to unnecessarily build out new electric generation and shut down solutions that are working now — to the detriment of electric reliability in the U.P.

UMERC and the Marquette Board of Light and Power, each running RICE units, must start escalating renewable benchmarks now to meet compliance deadlines, he said.

“The (Public Service) Commission’s order blocks UMERC’s proposed rate hikes for now, but without adjustments to the law, families and businesses in the U.P will bear the brunt of building redundant infrastructure,” Prestin said.

In rejecting UMERC’s plan, regulators observed that the utility included costs to comply not only with renewable standards by separate requirements it reach 100% “clean” energy by 2040, unnecessarily increasing the charges.

UMERC did not respond to questions over why its plan had this widened scope.

Advocates who legally intervened in the regulatory case also argued that there were significantly cheaper ways to meet the renewable goals, and UMERC’s proposed charges didn’t comply with the law.

Other Michigan utilities, like DTE Energy, Consumers Energy and Upper Peninsula Power Co., have all proposed plans this year that do so without immediately requiring customer surcharges.

Even with the rejection of the plan, the future of the RICE generators remains undecided, however.

Some environmental and consumer advocates argue the law doesn’t require they be shut down early, and UMERC could continue selling power from the generators into the market even while complying with state clean and renewable energy standards.

Prestin maintains that’s not the case, noting they are critical for reliability in a region already challenged with heavy snowfall and limited power connections with other regions.

Because the renewable energy plan was rejected, regulators found the issue of what will happen with the RICE units “moot” and didn’t make any determination on the question.