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Consumers Power Locks Up GM

Fortnightly Magazine - December 1995

Consumers Power Co. has entered into long-term sales contracts with General Motors Corp. (GM) to supply all electricity for at least 10 years to 6 of GM's largest plants, and for at least 5 years for 13 of GM's other large facilities (total service of 450 megawatts).The facilities, which account for 65 percent of the utility's "at-risk" industrial electric load and 22 percent of its industrial load, will receive rate discounts in exchange for the long-term commitments. The agreement calls for Consumers Power to provide an onsite utility engineer at most GM facilities to assist in reducing energy costs.

The utility will be allowed to recover from GM increases in fuel, purchase and interchange power costs limited to 2 percent annually the first five years of the contracts. If Consumers offers a better deal to a direct automotive manufacturing competitor, GM may take the same deal. GM also may take part in the utility's experimental retail wheeling program, if such a program begins. But GM would compensate Consumers for any resulting lost margin.


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