LANSING, Mich. (PRESS RELEASE) – The Michigan Public Service Commission approved a settlement agreement that will transfer ownership of Upper Peninsula Power Co. (UPPCO) (Case No. U-20995).
Axium UP Holdings LLC and Lake AIV LP filed an application on Febraru 26, 2021 seeking MPSC’s approval of Axium’s purchase of 100% of outstanding common stock in the Upper Peninsula Power Holding Co. which owns all outstanding common stock of UPPCO, and a transfer of ownership of the holding company and UPPCO from Lake AIV to Axium.
Axium UP Holdings LLC and Lake AIV LP filed an application Feb. 26, 2021, seeking Commission approval of Axium’s purchase of 100% of outstanding common stock in Upper Peninsula Power Holding Co., which owns all outstanding common stock of UPPCO, and a transfer of ownership of the holding company and UPPCO from Lake AIV to Axium. Axium is an affiliate of Axium Infrastructure, a portfolio investment firm that invests in infrastructure assets and has more than $4.2 billion in assets under management and $1.1 billion in co-investments.
The Michigan Attorney General’s Office intervened in the case, and MPSC Staff participated. Under terms of the settlement agreement, which resolves all issues in the case:
- Existing rates will not be impacted, and Axium will not seek to recover sale transaction costs from UPPCO customers;
- No workforce cuts are expected, and Axium commits to honoring collective bargaining agreements and existing pay and benefits for 24 months, maintaining the utility’s current offices, and continuing existing charitable contributions for at least five years.
- UPPCO agrees not to request an adjustment to base rates that would take effect before Jan. 1, 2023, unless the company must do so because corporate income tax rates increases.
- Axium is directed to move expeditiously to implement its debt refinancing plan, which will benefit customers both through long-term stability and by the lower interest rate that reduces financing costs.
- Axium agrees to increase the discretionary cap on its distributed generation program from 2% to at least 3% of its average in-state peak load.
- In its next rate case, UPPCO will include proposals to address Upper Peninsula Energy Task Force Committee recommendations for an electric vehicle charging station pilot program; alternative pilot tariffs and/or rebates applicable to building electric space heating and water heating, and a low-income residential customer pilot tariff in consultation with Staff and the Attorney General; and
- Axium will forgive 20% of the bad debt booked to the company’s COVID-19 deferred asset account, which shall be borne by shareholders and not recovered from ratepayers. UPPCO will propose an arrears forgiveness program, in consultation with the Staff and the Attorney General, within 90 days from the execution of the settlement agreement to apply the 20% of bad debt to customer arrearages.