In 1930, a Nebraska auto body shop coined the term

“one-stop shop” in a newspaper ad. Today, the term has become synon-ymous with a business model that’s convenient, efficient and cost-effective. CMS Enterprises followed the model in 2003 when it formed CMS Energy Resource Management (ERM). Staffed by six employees at One Energy Plaza in Jackson, ERM is a one-stop shop for CMS Enterprises’ six independent power projects (IPPs) in Michigan and one in North Carolina.

“Instead of each plant having its own buyer and marketer, we have a central group responsible for buying natural gas for the plants and selling their elec-tric output,” said ERM director Todd Mortimer.

“We’re the commodity experts for our Enterprises assets. We follow the natural gas and power market daily and have relationships with a dozen of the largest natural gas and power marketers in the Midwest.

“Having these relationships opens doors for opportunities for future growth and allows our plants to do what they’re good at — generating power. If they want gas or power market intelligence, have megawatts to sell or are in need of price hedging products, they call ERM.”

With 1,040 megawatts of CMS En-terprises’ total 1,066 megawatt capacity based in Michigan, ERM’s business has a heavy Michigan focus. ERM works with 20 producers of native gas in Michigan to procure fuel for its gas-fired facilities.

“That provides us a backyard supply for our natural gas-fired assets,” Mortimer said. “We’re taking Michigan natural gas and creating megawatts right here in Michigan.”

In addition, Dearborn Industrial Generation (DIG) has 2 billion cubic feet of storage capacity under a trans-portation contract that captures value by buying gas when prices are lower.

If more gas is needed, ERM reaches out to its Midwest marketers.

ERM also markets the uncontract-ed generation of CMS Enterprises’ IPPs. The uncontracted power is sold directly to other counterparties or delivered into the Midwest Indepen-dent Transmission System Operator (MISO).

ERM has both a gas and power desk that schedules the fuel the plants

burn and the generating units into MISO.

“We offer our units to run and they’ll either be cleared by MISO, in which we get a dispatch notice, or they’re not cleared and the plant doesn’t run,” Mortimer said.

Handling renewable energy credits (RECs) is also ERM’s forte.

As part of Michigan’s 2008 energy law, utility companies must have 10 percent of their energy portfolio come from renewable energy sources by 2015. The law also includes provi-sions for RECs.

Three Enterprises IPPs — Genesee Power Station, Grayling Generating Station and T.E.S. Filer City Station — are fueled by renewable sources and receive RECs.

Also, by converting blast furnace

gas from nearby Severstal (a steel company) into megawatts, DIG re-ceives a unique REC called A-C-E-Cs, which stands for advanced cleaner energy credits.

Another role of ERM is buying and selling NOX (nitrogen oxide) and SO2 (sulfur dioxide) credits to meet the

U.S. Environmental Protection Agen-cy’s emissions requirements.

“If the plant needs to buy more credits than the allotment they’ve received, we buy NOX or SO2 credits for them,” Mortimer said. “If they have extra, we sell those back into the market to capture value.”

With smartphones, ERM employ-ees are available 24/7 to talk with plant employees.

“Because we’re small, we can touch all areas of the business and work closely with credit, contracts, legal, accounting and the risk group,” Mortimer said.

“What makes ERM a great place to work is that we have a tight-knit team and we get to wear different hats, which makes every day different and exciting.”

CMS ENERGY RESOURCE MANAGEMENT:

A MODEL FOR

One-Stop Shop

by NANCY M ILLER

Jeff Arnold (sitting), studies gas and power prices as Brian Muschong and Aaron Martin look on.Left: Todd Mortimer is the director of gas and power marketing for CMS Energy Resource Management.

Photo: Harry Sabourin

MAY 2, 2011 inFocus PAGE 3