December 10, 2013, Introduced by Reps. Shirkey, Price, Lori, McMillin, Genetski, Kurtz, Poleski, Kelly and Yonker and referred to the Committee on Energy and Technology.
A bill to amend 1939 PA 3, entitled
"An act to provide for the regulation and control of public and
certain private utilities and other services affected with a public
interest within this state; to provide for alternative energy
suppliers; to provide for licensing; to include municipally owned
utilities and other providers of energy under certain provisions of
this act; to create a public service commission and to prescribe
and define its powers and duties; to abolish the Michigan public
utilities commission and to confer the powers and duties vested by
law on the public service commission; to provide for the
continuance, transfer, and completion of certain matters and
proceedings; to abolish automatic adjustment clauses; to prohibit
certain rate increases without notice and hearing; to qualify
residential energy conservation programs permitted under state law
for certain federal exemption; to create a fund; to provide for a
restructuring of the manner in which energy is provided in this
state; to encourage the utilization of resource recovery
facilities; to prohibit certain acts and practices of providers of
energy; to allow for the securitization of stranded costs; to
reduce rates; to provide for appeals; to provide appropriations; to
declare the effect and purpose of this act; to prescribe remedies
and penalties; and to repeal acts and parts of acts,"
by amending sections 6a, 6q, 6s, 10, 10a, 10c, 10e, 10g, 10q, and
10bb (MCL 460.6a, 460.6q, 460.6s, 460.10, 460.10a, 460.10c,
460.10e, 460.10g, 460.10q, and 460.10bb), sections 6a, 10, 10a, and
10g as amended and sections 6q and 6s as added by 2008 PA 286 and
sections 10c, 10e, 10q, and 10bb as added by 2000 PA 141.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
6a. (1) A gas, or electric utility, or electric
distribution utility shall not increase its rates and charges or
alter, change, or amend any rate or rate schedules, the effect of
which will be to increase the cost of services to its customers,
without first receiving commission approval as provided in this
section. The utility shall place in evidence facts relied upon to
support the utility's petition or application to increase its rates
and charges, or to alter, change, or amend any rate or rate
schedules. The commission shall require notice to be given to all
interested parties within the service area to be affected, and all
interested parties shall have a reasonable opportunity for a full
and complete hearing. A utility may use projected costs and
revenues for a future consecutive 12-month period in developing its
requested rates and charges. The commission shall notify the
utility within 30 days of filing, whether the utility's petition or
application is complete. A petition or application is considered
complete if it complies with the rate application filing forms and
instructions adopted under subsection (6). A petition or
application
pending before the commission prior to before the
adoption
of filing forms and instructions pursuant to under
subsection (6) shall be evaluated based upon the filing
requirements in effect at the time the petition or application was
filed. If the application is not complete, the commission shall
notify the utility of all information necessary to make that filing
complete. If the commission has not notified the utility within 30
days of whether the utility's petition or application is complete,
the application is considered complete. If the commission has not
issued an order within 180 days of the filing of a complete
application, the utility may implement up to the amount of the
proposed annual rate request through equal percentage increases or
decreases applied to all base rates. For a petition or application
pending
before the commission prior to the effective date of the
amendatory
act that added this sentence, before
October 6, 2008,
the
180-day period commences on the effective date of the
amendatory
act that added this sentence. October
6, 2008. If the
utility uses projected costs and revenues for a future period in
developing its requested rates and charges, the utility may not
implement
the equal percentage increases or decreases prior to
before the calendar date corresponding to the start of the
projected 12-month period. For good cause, the commission may issue
a temporary order preventing or delaying a utility from
implementing its proposed rates or charges. If a utility implements
increased rates or charges under this subsection before the
commission issues a final order, that utility shall refund to
customers, with interest, any portion of the total revenues
collected through application of the equal percentage increase that
exceed the total that would have been produced by the rates or
charges subsequently ordered by the commission in its final order.
The commission shall allocate any refund required by this section
among primary customers based upon their pro rata share of the
total revenue collected through the applicable increase, and among
secondary and residential customers in a manner to be determined by
the commission. The rate of interest for refunds shall equal 5%
plus the London interbank offered rate (LIBOR) for the appropriate
time period. For any portion of the refund which, exclusive of
interest, exceeds 25% of the annual revenue increase awarded by the
commission in its final order, the rate of interest shall be the
authorized rate of return on the common stock of the utility during
the appropriate period. Any refund or interest awarded under this
subsection shall not be included, in whole or in part, in any
application for a rate increase by a utility. Nothing in this
section impairs the commission's ability to issue a show cause
order as part of its rate-making authority. An alteration or
amendment in rates or rate schedules applied for by a public
utility that will not result in an increase in the cost of service
to its customers may be authorized and approved without notice or
hearing. There shall be no increase in rates based upon changes in
cost of fuel or purchased gas unless notice has been given within
the
service area to be affected, and there has been an opportunity
for a full and complete hearing on the cost of fuel or purchased
gas, and in the case of an electric distribution utility, that
recovery is limited to the cost of fuel, purchased gas, or
purchased power the commission determines is necessary for the
electric distribution utility to perform its obligations as an
electric distribution utility in an efficient manner. The rates
charged by any utility pursuant to an automatic fuel or purchased
gas adjustment clause shall not be altered, changed, or amended
unless notice has been given within the service area to be
affected, and there has been an opportunity for a full and complete
hearing on the cost of the fuel or purchased gas.
(2) The commission shall adopt rules and procedures for the
filing, investigation, and hearing of petitions or applications to
increase or decrease utility rates and charges as the commission
finds necessary or appropriate to enable it to reach a final
decision with respect to petitions or applications within a period
of 12 months from the filing of the complete petitions or
applications. The commission shall not authorize or approve
adjustment clauses that operate without notice and an opportunity
for a full and complete hearing, and all such clauses shall be
abolished. The commission may hold a full and complete hearing to
determine the cost of fuel, purchased gas, or purchased power
separately from a full and complete hearing on a general rate case
and may be held concurrently with the general rate case. The
commission shall authorize a utility to recover the cost of fuel,
purchased gas, or purchased power only to the extent that the
purchases are reasonable and prudent, and in the case of an
electric distribution utility, that recovery is limited to the cost
of fuel, purchased gas, or purchased power the commission
determines is necessary for the electric distribution utility to
perform its obligations as an electric distribution utility in an
efficient manner. As used in this section:
(a) "Full and complete hearing" means a hearing that provides
interested parties a reasonable opportunity to present and cross-
examine evidence and present arguments relevant to the specific
element or elements of the request that are the subject of the
hearing.
(b) "General rate case" means a proceeding initiated by a
utility in an application filed with the commission that alleges a
revenue deficiency and requests an increase in the schedule of
rates or charges based on the utility's total cost of providing
service.
(3) Except as otherwise provided in this subsection, if the
commission fails to reach a final decision with respect to a
completed petition or application to increase or decrease utility
rates within the 12-month period following the filing of the
completed petition or application, the petition or application is
considered approved. If a utility makes any significant amendment
to its filing, the commission has an additional 12 months from the
date of the amendment to reach a final decision on the petition or
application. If the utility files for an extension of time, the
commission shall extend the 12-month period by the amount of
additional time requested by the utility.
(4) A utility shall not file a general rate case application
for an increase in rates earlier than 12 months after the date of
the filing of a complete prior general rate case application. A
utility may not file a new general rate case application until the
commission has issued a final order on a prior general rate case or
until the rates are approved under subsection (3).
(5) The commission shall, if requested by a gas utility,
establish load retention transportation rate schedules or approve
gas transportation contracts as required for the purpose of
retaining industrial or commercial customers whose individual
annual transportation volumes exceed 500,000 decatherms on the gas
utility's system. The commission shall approve these rate schedules
or approve transportation contracts entered into by the utility in
good faith if the industrial or commercial customer has the
installed capability to use an alternative fuel or otherwise has a
viable alternative to receiving natural gas transportation service
from the utility, the customer can obtain the alternative fuel or
gas transportation from an alternative source at a price which
would cause them to cease using the gas utility's system, and the
customer, as a result of their use of the system and receipt of
transportation service, makes a significant contribution to the
utility's fixed costs. The commission shall adopt accounting and
rate-making policies to ensure that the discounts associated with
the transportation rate schedules and contracts are recovered by
the gas utility through charges applicable to other customers if
the incremental costs related to the discounts are no greater than
the costs that would be passed on to those customers as the result
of a loss of the industrial or commercial customer's contribution
to a utility's fixed costs.
(6)
Within 90 days of the effective date of the amendatory act
that
added this subsection, the The
commission shall adopt standard
rate application filing forms and instructions for use in all
general rate cases filed by utilities whose rates are regulated by
the commission. For cooperative electric utilities whose rates are
regulated by the commission, in addition to rate applications filed
under this section, the commission shall continue to allow for rate
filings based on the cooperative's times interest earned ratio. The
commission may, in its discretion, modify the standard rate
application forms and instructions adopted under this subsection.
(7) If, on or before January 1, 2008, a merchant plant entered
into a contract with an initial term of 20 years or more to sell
electricity to an electric utility whose rates are regulated by the
commission with 1,000,000 or more retail customers in this state
and if, prior to January 1, 2008, the merchant plant generated
electricity under that contract, in whole or in part, from wood or
solid wood wastes, then the merchant plant shall, upon petition by
the merchant plant, and subject to the limitation set forth in
subsection (8), recover the amount, if any, by which the merchant
plant's reasonably and prudently incurred actual fuel and variable
operation and maintenance costs exceed the amount that the merchant
plant is paid under the contract for those costs. This subsection
does not apply to landfill gas plants, hydro plants, municipal
solid waste plants, or to merchant plants engaged in litigation
against an electric utility seeking higher payments for power
delivered pursuant to contract.
(8) The total aggregate additional amounts recoverable by
merchant
plants pursuant to under subsection (7) in excess of the
amounts paid under the contracts shall not exceed $1,000,000.00 per
month for each affected electric utility. The $1,000,000.00 per
month limit specified in this subsection shall be reviewed by the
commission upon petition of the merchant plant filed no more than
once per year and may be adjusted if the commission finds that the
eligible merchant plants reasonably and prudently incurred actual
fuel and variable operation and maintenance costs exceed the amount
that those merchant plants are paid under the contract by more than
$1,000,000.00 per month. The annual amount of the adjustments shall
not exceed a rate equal to the United States consumer price index.
An adjustment shall not be made by the commission unless each
affected merchant plant files a petition with the commission. As
used in this subsection, "United States consumer price index" means
the United States consumer price index for all urban consumers as
defined and reported by the United States department of labor,
bureau of labor statistics. If the total aggregate amount by which
the eligible merchant plants reasonably and prudently incurred
actual fuel and variable operation and maintenance costs determined
by the commission exceed the amount that the merchant plants are
paid under the contract by more than $1,000,000.00 per month, the
commission shall allocate the additional $1,000,000.00 per month
payment among the eligible merchant plants based upon the
relationship of excess costs among the eligible merchant plants.
The $1,000,000.00 limit specified in this subsection, as adjusted,
shall not apply with respect to actual fuel and variable operation
and maintenance costs that are incurred due to changes in federal
or state environmental laws or regulations that are implemented
after
the effective date of the amendatory act that added this
subsection.
October 6, 2008. The $1,000,000.00 per month payment
limit under this subsection shall not apply to merchant plants
eligible under subsection (7) whose electricity is purchased by a
utility that is using wood or wood waste or fuels derived from
those materials for fuel in their power plants.
(9) The commission shall issue orders to permit the recovery
authorized under subsections (7) and (8) upon petition of the
merchant plant. The merchant plant shall not be required to alter
or amend the existing contract with the electric utility in order
to obtain the recovery under subsections (7) and (8). The
commission shall permit or require the electric utility whose rates
are regulated by the commission to recover from its ratepayers all
fuel and variable operation and maintenance costs that the electric
utility is required to pay to the merchant plant as reasonably and
prudently incurred costs.
Sec.
6q. (1) A Except as
provided in section 10g, a person
shall not acquire, control, or merge, directly or indirectly, in
whole or in part, with a jurisdictional regulated utility nor shall
a jurisdictional regulated utility sell, assign, transfer, or
encumber its assets to another person without first applying to and
receiving the approval of the commission under this section.
(2) After notice and hearing, the commission shall issue an
order stating what constitutes acquisition, transfer of control,
merger activities, or encumbrance of assets that are subject to
this section. This section does not apply to the encumbrance,
assignment, acquisition, or transfer of assets that are encumbered,
assigned, acquired, transferred, or sold in the normal course of
business or to the issuance of securities or other financing
transactions not directly or indirectly involved in an acquisition,
merger, encumbrance, or transfer of control that is governed by
this section.
(3) The commission shall promulgate rules creating procedures
for the application process required under this section. The
application shall include, but is not limited to, all of the
following information:
(a) A concise summary of the terms and conditions of the
proposed acquisition, transfer, merger, or encumbrance.
(b) Copies of the material acquisition, transfer, merger, or
encumbrance documents if available.
(c) A summary of the projected impacts of the acquisition,
transfer, merger, or encumbrance on rates and electric service in
this state.
(d) Pro forma financial statements that are relevant to the
acquisition, transfer, merger, or encumbrance.
(e) Copies of the parties' public filings with other state or
federal regulatory agencies regarding the same acquisition,
transfer, merger, or encumbrance, including any regulatory orders
issued by the agencies regarding the acquisition, transfer, merger,
or encumbrance.
(4) Within 60 days from the date an application is filed under
this section, interested parties, including the attorney general,
may file comments with the commission on the proposed acquisition,
transfer, merger, or encumbrance.
(5) After notice and hearing and within 180 days from the date
an application is filed under this section, the commission shall
issue an order approving or rejecting the proposed acquisition,
transfer of control, merger, or encumbrance.
(6) All parties to an acquisition, transfer, merger, or
encumbrance subject to this section shall provide the commission
and the attorney general access to all books, records, accounts,
documents, and any other data and information the commission
considers necessary to effectively assess the impact of the
proposed acquisition, transfer, merger, or encumbrance.
(7) The commission shall consider among other factors all of
the following in its evaluation of whether or not to approve a
proposed acquisition, transfer, merger, or encumbrance:
(a) Whether the proposed action would have an adverse impact
on the rates of the customers affected by the acquisition,
transfer, merger, or encumbrance.
(b) Whether the proposed action would have an adverse impact
on the provision of safe, reliable, and adequate energy service in
this state.
(c) Whether the action will result in the subsidization of a
nonregulated activity of the new entity through the rates paid by
the customers of the jurisdictional regulated utility.
(d) Whether the action will significantly impair the
jurisdictional regulated utility's ability to raise necessary
capital or to maintain a reasonable capital structure.
(e) Whether the action is otherwise inconsistent with public
policy and interest.
(f) Whether the action will have an adverse impact on the
competitive retail electric market.
(8) In approving an acquisition, transfer, merger, or
encumbrance under this section, the commission may impose
reasonable terms and conditions on the acquisition, transfer,
merger, or encumbrance to protect the jurisdictional regulated
utility, including the division and allocation of the utility's
assets. A jurisdictional regulated utility may reject the terms and
conditions imposed by the commission and not proceed with the
transaction.
(9) In approving an acquisition, transfer, merger, or
encumbrance under this section, the commission may impose
reasonable terms and conditions on the acquisition, transfer,
merger, or encumbrance to protect the customers of the
jurisdictional regulated utility. A jurisdictional regulated
utility may reject the terms and conditions imposed by the
commission and not proceed with the transaction.
(10) Nonpublic information and materials submitted by a
jurisdictional regulated utility under this section clearly
designated by that utility as confidential are exempt from the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. The
commission shall issue protective orders as necessary to protect
information designated by that utility as confidential.
(11) Nothing in this section alters the authority of the
attorney general to enforce federal and state antitrust laws.
(12) As used in this section:
(a) "Commission" means the Michigan public service commission.
(b) "Jurisdictional regulated utility" means a utility whose
rates are regulated by the commission. Jurisdictional regulated
utility does not include a telecommunication provider as defined in
the Michigan telecommunications act, 1991 PA 179, MCL 484.2101 to
484.2604,
484.2603, or a motor carrier as defined in the motor
carrier act, 1933 PA 254, MCL 475.1 to 479.43.
(c) "Person" means an individual, corporation, association,
partnership, utility, or any other legal private or public entity.
Sec. 6s. (1) An electric utility that proposes to construct an
electric generation facility, make a significant investment in an
existing electric generation facility, purchase an existing
electric generation facility, or enter into a power purchase
agreement for the purchase of electric capacity for a period of 6
years or longer may submit an application to the commission seeking
a certificate of necessity for that construction, investment, or
purchase if that construction, investment, or purchase costs
$500,000,000.00 or more and a portion of the costs would be
allocable to retail customers in this state. A significant
investment in an electric generation facility includes a group of
investments reasonably planned to be made over a multiple year
period not to exceed 6 years for a singular purpose such as
increasing the capacity of an existing electric generation plant.
The commission shall not issue a certificate of necessity under
this section for any environmental upgrades to existing electric
generation
facilities, or for a renewable energy system, or for any
electric distribution utility.
(2) The commission may implement separate review criteria and
approval standards for electric utilities with less than 1,000,000
retail customers who seek a certificate of necessity for projects
costing less than $500,000,000.00.
(3) An electric utility submitting an application under this
section may request 1 or more of the following:
(a) A certificate of necessity that the power to be supplied
as a result of the proposed construction, investment, or purchase
is needed.
(b) A certificate of necessity that the size, fuel type, and
other design characteristics of the existing or proposed electric
generation facility or the terms of the power purchase agreement
represent the most reasonable and prudent means of meeting that
power need.
(c) A certificate of necessity that the price specified in the
power purchase agreement will be recovered in rates from the
electric utility's customers.
(d) A certificate of necessity that the estimated purchase or
capital costs of and the financing plan for the existing or
proposed electric generation facility, including, but not limited
to, the costs of siting and licensing a new facility and the
estimated cost of power from the new or proposed electric
generation facility, will be recoverable in rates from the electric
utility's customers subject to subsection (4)(c).
(4) Within 270 days of the filing of an application under this
section, the commission shall issue an order granting or denying
the requested certificate of necessity. The commission shall hold a
hearing on the application. The hearing shall be conducted as a
contested case pursuant to chapter 4 of the administrative
procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.287. The
commission shall allow intervention by interested persons.
Reasonable discovery shall be permitted before and during the
hearing in order to assist parties and interested persons in
obtaining evidence concerning the application, including, but not
limited to, the reasonableness and prudence of the construction,
investment, or purchase for which the certificate of necessity has
been requested. The commission shall grant the request if it
determines all of the following:
(a) That the electric utility has demonstrated a need for the
power that would be supplied by the existing or proposed electric
generation facility or pursuant to the proposed power purchase
agreement through its approved integrated resource plan that
complies with subsection (11).
(b) The information supplied indicates that the existing or
proposed electric generation facility will comply with all
applicable state and federal environmental standards, laws, and
rules.
(c) The estimated cost of power from the existing or proposed
electric generation facility or the price of power specified in the
proposed power purchase agreement is reasonable. The commission
shall find that the cost is reasonable if, in the construction or
investment in a new or existing facility, to the extent it is
commercially practicable, the estimated costs are the result of
competitively bid engineering, procurement, and construction
contracts, or in a power purchase agreement, the cost is the result
of a competitive solicitation. Up to 150 days after an electric
utility makes its initial filing, it may file to update its cost
estimates if they have materially changed. No other aspect of the
initial filing may be modified unless the application is withdrawn
and refiled. A utility's filing updating its cost estimates does
not extend the period for the commission to issue an order granting
or denying a certificate of necessity. An affiliate of an electric
utility that serves customers in this state and at least 1 other
state may participate in the competitive bidding to provide
engineering, procurement, and construction services to that
electric utility for a project covered by this section.
(d) The existing or proposed electric generation facility or
proposed power purchase agreement represents the most reasonable
and prudent means of meeting the power need relative to other
resource options for meeting power demand, including energy
efficiency programs and electric transmission efficiencies.
(e) To the extent practicable, the construction or investment
in a new or existing facility in this state is completed using a
workforce composed of residents of this state as determined by the
commission. This subdivision does not apply to a facility that is
located in a county that lies on the border with another state.
(5) The commission may consider any other costs or information
related to the costs associated with the power that would be
supplied by the existing or proposed electric generation facility
or pursuant to the proposed purchase agreement or alternatives to
the proposal raised by intervening parties.
(6) In a certificate of necessity under this section, the
commission shall specify the costs approved for the construction of
or significant investment in the electric generation facility, the
price approved for the purchase of the existing electric generation
facility, or the price approved for the purchase of power pursuant
to the terms of the power purchase agreement.
(7) The utility shall annually file, or more frequent if
required by the commission, reports to the commission regarding the
status of any project for which a certificate of necessity has been
granted under subsection (4), including an update concerning the
cost and schedule of that project.
(8) If the commission denies any of the relief requested by an
electric utility, the electric utility may withdraw its application
or proceed with the proposed construction, purchase, investment, or
power purchase agreement without a certificate and the assurances
granted under this section.
(9) Once the electric generation facility or power purchase
agreement is considered used and useful or as otherwise provided in
subsection (12), the commission shall include in an electric
utility's retail rates all reasonable and prudent costs for an
electric generation facility or power purchase agreement for which
a certificate of necessity has been granted. The commission shall
not disallow recovery of costs an electric utility incurs in
constructing, investing in, or purchasing an electric generation
facility or in purchasing power pursuant to a power purchase
agreement for which a certificate of necessity has been granted, if
the costs do not exceed the costs approved by the commission in the
certificate. Once the electric generation facility or power
purchase agreement is considered used and useful or as otherwise
provided in subsection (12), the commission shall include in the
electric utility's retail rates costs actually incurred by the
electric utility that exceed the costs approved by the commission
only if the commission finds that the additional costs are
reasonable and prudent. If the actual costs incurred by the
electric utility exceed the costs approved by the commission, the
electric utility has the burden of proving by a preponderance of
the evidence that the costs are reasonable and prudent. The portion
of the cost of a plant, facility, or power purchase agreement which
exceeds 110% of the cost approved by the commission is presumed to
have been incurred due to a lack of prudence. The commission may
include any or all of the portion of the cost in excess of 110% of
the cost approved by the commission if the commission finds by a
preponderance of the evidence that the costs were prudently
incurred.
(10)
Within 90 days of the effective date of the amendatory
act
that added this section, the The
commission shall adopt
standard application filing forms and instructions for use in all
requests for a certificate of necessity under this section. The
commission may, in its discretion, modify the standard application
filing forms and instructions adopted under this section.
(11) The commission shall establish standards for an
integrated resource plan that shall be filed by an electric utility
requesting a certificate of necessity under this section. An
integrated resource plan shall include all of the following:
(a) A long-term forecast of the electric utility's load growth
under various reasonable scenarios.
(b) The type of generation technology proposed for the
generation facility and the proposed capacity of the generation
facility, including projected fuel and regulatory costs under
various reasonable scenarios.
(c) Projected energy and capacity purchased or produced by the
electric utility pursuant to any renewable portfolio standard.
(d) Projected energy efficiency program savings under any
energy efficiency program requirements and the projected costs for
that program.
(e) Projected load management and demand response savings for
the electric utility and the projected costs for those programs.
(f) An analysis of the availability and costs of other
electric resources that could defer, displace, or partially
displace the proposed generation facility or purchased power
agreement, including additional renewable energy, energy efficiency
programs, load management, and demand response, beyond those
amounts contained in subdivisions (c) to (e).
(g) Electric transmission options for the electric utility.
(12) The commission shall allow financing interest cost
recovery in an electric utility's base rates on construction work
in progress for capital improvements approved under this section
prior to the assets being considered used and useful. Regardless of
whether or not the commission authorizes base rate treatment for
construction work in progress financing interest expense, an
electric utility shall be allowed to recognize, accrue, and defer
the allowance for funds used during construction related to equity
capital.
(13) As used in this section, "renewable energy system" means
that term as defined in section 11 of the clean, renewable, and
efficient energy act, 2008 PA 295, MCL 460.1011.
Sec. 10. (1) Sections 10 through 10bb shall be known and may
be cited as the "customer choice and electricity reliability act".
(2) The purpose of sections 10a through 10bb is to do all of
the following:
(a) To ensure that all retail customers in this state of
electric power have a choice of electric generation suppliers.
(b)
To allow and encourage ensure
that the Michigan public
service
commission to foster fosters
competition in this state in
the
provision of electric supply and maintain maintains regulation
of electric supply for customers who continue to choose supply from
incumbent electric utilities.
(c) To encourage the development and construction of
independently
owned merchant generation plants, which will to
encourage innovation and investment of generation and storage
assets, and to diversify the ownership of electric generation in
this state.
(d) To ensure that all persons in this state are afforded
safe,
reliable electric power at a reasonable rate.fully available
at market competitive rates.
(e) To improve the opportunities for economic development in
this state and to promote financially healthy and competitive
utilities in this state.
(f) To maintain, foster, and encourage robust, reliable, and
economic generation, distribution, and transmission systems to
provide this state's electric suppliers and generators an
opportunity to access regional sources of generation and wholesale
power markets and to ensure a reliable supply of electricity in
this state.
(g) To ensure effective competition in the provision of retail
electric service by avoiding anticompetitive subsidies flowing from
a noncompetitive retail electric service to a competitive retail
electric service or to a product or service other than retail
electric service, and from a competitive retail electric service to
a noncompetitive retail electric service.
(h) To ensure that retail electric service consumers are
protected from unreasonable sales practices, market deficiencies,
and market power.
Sec. 10a. (1) The commission shall issue orders establishing
the rates, terms, and conditions of service that allow all retail
customers of an electric utility or provider with less than
1,000,000 retail customers on the effective date of the 2013
amendatory act that amended this section to choose an alternative
electric supplier. The orders under this subsection shall do all of
the following:
(a) Provide that no more than 10% of an electric utility's
average weather-adjusted retail sales for the preceding calendar
year may take service from an alternative electric supplier at any
time.
(b) Set forth procedures necessary to administer and allocate
the amount of load that will be allowed to be served by alternative
electric suppliers, through the use of annual energy allotments
awarded on a calendar year basis, and shall provide, among other
things, that existing customers who are taking electric service
from
an alternative electric supplier at a facility on the
effective
date of the amendatory act that added this subdivision
October 6, 2008 shall be given an allocated annual energy allotment
for that service at that facility, that customers seeking to expand
usage at a facility served through an alternative electric supplier
will be given next priority, with the remaining available load, if
any, allocated on a first-come first-served basis. The procedures
shall also provide how customer facilities will be defined for the
purpose of assigning the annual energy allotments to be allocated
under this section. The commission shall not allocate additional
annual energy allotments at any time when the total annual energy
allotments for the utility's distribution service territory is
greater than 10% of the utility's weather-adjusted retail sales in
the calendar year preceding the date of allocation. If the sales of
a utility are less in a subsequent year or if the energy usage of a
customer receiving electric service from an alternative electric
supplier exceeds its annual energy allotment for that facility,
that customer shall not be forced to purchase electricity from a
utility, but may purchase electricity from an alternative electric
supplier for that facility during that calendar year.
(c) Notwithstanding any other provision of this section,
customers seeking to expand usage at a facility that has been
continuously served through an alternative electric supplier since
April 1, 2008 shall be permitted to purchase electricity from an
alternative electric supplier for both the existing and any
expanded load at that facility as well as any new facility
constructed
or acquired after the effective date of the amendatory
act
that added this subdivision October
6, 2008 that is similar in
nature if the customer owns more than 50% of the new facility.
(d) Notwithstanding any other provision of this section, any
customer operating an iron ore mining facility, iron ore processing
facility, or both, located in the Upper Peninsula of this state,
shall be permitted to purchase all or any portion of its
electricity from an alternative electric supplier, regardless of
whether the sales exceed 10% of the serving electric utility's
average weather-adjusted retail sales.
(2) The commission shall issue orders establishing the rates,
terms, and conditions of service that allow all retail customers of
an electric utility or provider with more than 1,000,000 retail
customers on the effective date of the 2013 amendatory act that
amended this section to choose an alternative electric supplier.
The orders shall do all of the following:
(a) Provide that all customers of an electric utility with
more than 1,000,000 retail customers and all customers of an
electric distribution utility may take service from an alternative
electric supplier.
(b) Set forth procedures necessary to ensure that customers of
an electric distribution utility or of an electric utility that
does not complete a plan in the time period provided under section
10g are provided, on a comparable and nondiscriminatory basis, a
market-based standard tariff service for electric generation. The
procedures shall include the following provisions:
(i) A competitive bidding process to acquire a wholesale
product consisting of all competitive retail electric services
necessary to maintain essential electric service to standard tariff
service customers, including a firm supply of load following
electric generation service.
(ii) Reasonable financial and technical requirements to
evaluate prospective bidders in advance of a competitive bidding
process to ensure that only bidders that have the financial and
technical integrity to reliably provide standard tariff service are
allowed to participate.
(iii) Rules that prevent an electric distribution utility or
electric utility from providing any portion of standard tariff
service. However, an independent affiliate of an electric
distribution utility or electric utility may be selected as a
standard tariff service provider.
(iv) Rules to prevent the exercise of market power, collusion,
or gaming by entities bidding to supply standard tariff service,
and to prevent an electric distribution utility or electric utility
from providing any other competitive advantage to affiliates of
that electric distribution utility or electric utility in the
competitive bidding process. The commission shall not limit
participation in an auction on the basis of the portion or quantity
of standard tariff service already won or supplied by a particular
bidder.
(v) Commission or independent third-party review to approve
and certify the results and awards under the competitive bidding
process.
(vi) A contingency plan, filed with and approved by the
commission, to ensure the continual availability of standard tariff
service to all customers if a standard tariff service provider
defaults on its obligations or a competitive bid process fails to
attract any bidders. The contingency plan shall be limited to the
shorter of either 1 year in duration or until a new competitive bid
process can be held. A new contingency plan shall be filed with and
approved by the commission for each 1-year period until a
competitive bid process attracts at least 1 acceptable bid.
(3) (2)
The commission shall issue orders
establishing a
licensing procedure for all alternative electric suppliers. To
ensure adequate service to customers in this state, the commission
shall require that an alternative electric supplier maintain an
office within this state, shall assure that an alternative electric
supplier has the necessary financial, managerial, and technical
capabilities, shall require that an alternative electric supplier
maintain records which the commission considers necessary, and
shall ensure an alternative electric supplier's accessibility to
the commission, to consumers, and to electric utilities in this
state. The commission also shall require alternative electric
suppliers to agree that they will collect and remit to local units
of government all applicable users, sales, and use taxes. An
alternative electric supplier is not required to obtain any
certificate, license, or authorization from the commission other
than as required by this act.
(4) (3)
The commission shall issue orders
to ensure that
customers in this state are not switched to another supplier or
billed for any services without the customer's consent.
(5) (4)
No later than December 2, 2000, the The commission
shall establish a code of conduct that shall apply to all electric
utilities. The code of conduct shall include, but is not limited
to, measures to prevent cross-subsidization, information sharing,
and preferential treatment, between a utility's regulated and
unregulated services, whether those services are provided by the
utility or the utility's affiliated entities. The code of conduct
established under this subsection shall also be applicable to
electric utilities, electric distribution utilities, independent
affiliates of electric distribution utilities, and alternative
electric suppliers consistent with section 10, this section, and
sections 10b through 10cc.
(6) (5)
An electric utility may offer its
customers an
appliance service program. Except as otherwise provided by this
section, the utility shall comply with the code of conduct
established
by the commission under subsection (4). (5). As used in
this section, "appliance service program" or "program" means a
subscription program for the repair and servicing of heating and
cooling systems or other appliances.
(7) (6)
A utility offering a program under
subsection (5) (6)
shall do all of the following:
(a) Locate within a separate department of the utility or
affiliate within the utility's corporate structure the personnel
responsible for the day-to-day management of the program.
(b) Maintain separate books and records for the program,
access to which shall be made available to the commission upon
request.
(c) Not promote or market the program through the use of
utility billing inserts, printed messages on the utility's billing
materials, or other promotional materials included with customers'
utility bills.
(8) (7)
All costs directly attributable to
an appliance
service
program allowed under subsection (5) (6) shall be allocated
to the program as required by this subsection. The direct and
indirect costs of employees, vehicles, equipment, office space, and
other facilities used in the appliance service program shall be
allocated to the program based upon the amount of use by the
program as compared to the total use of the employees, vehicles,
equipment, office space, and other facilities. The cost of the
program shall include administrative and general expense loading to
be determined in the same manner as the utility determines
administrative and general expense loading for all of the utility's
regulated and unregulated activities. A subsidy by a utility does
not exist if costs allocated as required by this subsection do not
exceed the revenue of the program.
(9) (8)
A utility may include charges for
its appliance
service program on its monthly billings to its customers if the
utility complies with all of the following requirements:
(a) All costs associated with the billing process, including
the postage, envelopes, paper, and printing expenses, are allocated
as
required under subsection (7).(8).
(b) A customer's regulated utility service is not terminated
for nonpayment of the appliance service program portion of the
bill.
(c) Unless the customer directs otherwise in writing, a
partial payment by a customer is applied first to the bill for
regulated service.
(10) (9)
In marketing its appliance service
program to the
public, a utility shall do all of the following:
(a) The list of customers receiving regulated service from the
utility shall be available to a provider of appliance repair
service upon request within 2 business days. The customer list
shall
be provided in the same electronic format as such the
information is provided to the appliance service program. A new
customer shall be added to the customer list within 1 business day
of the date the customer requested to turn on service.
(b) Appropriately allocate costs as required under subsection
(7)
(8) when personnel employed at a utility's call center
provide
appliance service program marketing information to a prospective
customer.
(c)
Prior to Before enrolling a customer into the program, the
utility shall inform the potential customer of all of the
following:
(i) That appliance service programs may be available from
another provider.
(ii) That the appliance service program is not regulated by the
commission.
(iii) That a new customer shall have has 10
days after
enrollment to cancel his or her appliance service program contract
without penalty.
(iv) That the customer's regulated rates and conditions of
service provided by the utility are not affected by enrollment in
the program or by the decision of the customer to use the services
of another provider of appliance repair service.
(d) The utility name and logo may be used to market the
appliance service program provided that the program is not marketed
in conjunction with a regulated service. To the extent that a
program utilizes the utility's name and logo in marketing the
program, the program shall include language on all material
indicating that the program is not regulated by the commission.
Costs shall not be allocated to the program for the use of the
utility's name or logo.
(11) (10)
This section does not prohibit the
commission from
requiring a utility to include revenues from an appliance service
program in establishing base rates. If the commission includes the
revenues of an appliance service program in determining a utility's
base rates, the commission shall also include all of the costs of
the program as determined under this section.
(12) (11)
Except as otherwise provided in
this section, the
code of conduct with respect to an appliance service program shall
not require a utility to form a separate affiliate or division to
operate an appliance service program, impose further restrictions
on the sharing of employees, vehicles, equipment, office space, and
other facilities, or require the utility to provide other providers
of appliance repair service with access to utility employees,
vehicles, equipment, office space, or other facilities.
(13) (12)
This act does not prohibit or limit
the right of a
person to obtain self-service power and does not impose a
transition, implementation, exit fee, or any other similar charge
on self-service power. A person using self-service power is not an
electric supplier, electric utility, or a person conducting an
electric utility business. As used in this subsection, "self-
service power" means any of the following:
(a) Electricity generated and consumed at an industrial site
or contiguous industrial site or single commercial establishment or
single residence without the use of an electric utility's or
electric distribution utility's transmission and distribution
system.
(b) Electricity generated primarily by the use of by-product
fuels, including waste water solids, which electricity is consumed
as part of a contiguous facility, with the use of an electric
utility's or electric distribution utility's transmission and
distribution system, but only if the point or points of receipt of
the power within the facility are not greater than 3 miles distant
from the point of generation.
(c) A site or facility with load existing on June 5, 2000 that
is divided by an inland body of water or by a public highway, road,
or street but that otherwise meets this definition meets the
contiguous requirement of this subdivision regardless of whether
self-service power was being generated on June 5, 2000.
(d) A commercial or industrial facility or single residence
that meets the requirements of subdivision (a) or (b) meets this
definition whether or not the generation facility is owned by an
entity different from the owner of the commercial or industrial
site or single residence.
(14) (13)
This act does not prohibit or limit
the right of a
person to engage in affiliate wheeling and does not impose a
transition, implementation, exit fee, or any other similar charge
on a person engaged in affiliate wheeling. As used in this section:
(a) "Affiliate" means a person or entity that directly, or
indirectly through 1 or more intermediates, controls, is controlled
by, or is under common control with another specified entity. As
used in this subdivision, "control" means, whether through an
ownership, beneficial, contractual, or equitable interest, the
possession, directly or indirectly, of the power to direct or to
cause the direction of the management or policies of a person or
entity or the ownership of at least 7% of an entity either directly
or indirectly.
(b) "Affiliate wheeling" means a person's use of direct access
service where an electric utility delivers electricity generated at
a person's industrial site to that person or that person's
affiliate at a location, or general aggregated locations, within
this state that was either 1 of the following:
(i) For at least 90 days during the period from January 1, 1996
to October 1, 1999, supplied by self-service power, but only to the
extent of the capacity reserved or load served by self-service
power during the period.
(ii) Capable of being supplied by a person's cogeneration
capacity within this state that has had since January 1, 1996 a
rated capacity of 15 megawatts or less, was placed in service
before December 31, 1975, and has been in continuous service since
that date. A person engaging in affiliate wheeling is not an
electric supplier, an electric utility, or conducting an electric
utility business when a person engages in affiliate wheeling.
(15) (14)
The rights of parties to existing contracts
and
agreements in effect as of January 1, 2000 between electric
utilities and qualifying facilities, including the right to have
the charges recovered from the customers of an electric utility, or
its successor, shall not be abrogated, increased, or diminished by
this act, nor shall the receipt of any proceeds of the
securitization bonds by an electric utility be a basis for any
regulatory disallowance. Further, any securitization or financing
order issued by the commission that relates to a qualifying
facility's power purchase contract shall fully consider that
qualifying facility's legal and financial interests.
(16) (15)
A customer who elects to receive
service from an
alternative electric supplier may subsequently provide notice to
the electric utility of the customer's desire to receive standard
tariff service from the electric utility. The procedures in place
for each electric utility as of January 1, 2008 that set forth the
terms
pursuant to under which a customer receiving service from an
alternative electric supplier may return to full service from the
electric utility are ratified and shall remain in effect and may be
amended by the commission as needed. If an electric utility did not
have the procedures in place as of January 1, 2008, the commission
shall adopt those procedures.
(17) (16)
The commission shall authorize
rates that will
ensure that an electric utility that offered retail open access
service
from 2002 through the effective date of the amendatory act
that
added this subsection October
6, 2008 fully recovers its
restructuring costs and any associated accrued regulatory assets.
This includes, but is not limited to, implementation costs,
stranded
costs, and costs authorized pursuant to under section
10d(4)
as it existed prior to the effective date of the amendatory
act
that added this subsection, before
October 6, 2008, that have
been authorized for recovery by the commission in orders issued
prior
to the effective date of the amendatory act that added this
subsection.
before October 6, 2008. The commission shall approve
surcharges
that will ensure full recovery of all such costs within
5
years of the effective date of the amendatory act that added this
subsection.by October 6, 2013.
(18) Within 6 months after the effective date of the
amendatory act that added this subsection, an electric utility with
1,000,000 or more retail customers or an electric distribution
utility shall file a tariff with the commission that provides
qualifying alternative electric suppliers with the option to have
the utility purchase their receivables for electric sales that are
made to residential customers and small commercial customers and
charged on the utility's bill.
(19) Utilities shall purchase the receivables for energy
service of alternative electric suppliers under subsection (18) at
a just and reasonable discount rate to be reviewed and approved by
the commission, after notice and hearing. The discount rate shall
be designed to recover all start-up and ongoing costs, including
uncollectible amounts associated with the electric supply provided
by the alternative electric supplier to its customers, that are
incrementally incurred by the utility in providing the purchase of
receivables services provided for in this section. The commission
shall base the initial discount rates, to be established separately
for residential and commercial classes that receive service from an
alternative electric supplier but are not transport customers, on
all of the following:
(a) The utility's historical bad debt experience for a similar
period and rate class.
(b) Any working capital costs arising from the lag in
collections of receivables associated with the utility's purchase
of receivables.
(c) Estimated incremental start-up costs.
(d) Administrative costs associated with the utility's
purchase of receivables.
(20) In subsequent discount rates, following the setting of
the initial discount rate under subsection (19), the commission
shall use the average of the historical bad debt experience for all
participating alternative electric suppliers, without accounting
for the historical bad debt of the utility. The commission shall
retain continuing jurisdiction and prescribe reconciliation
procedures to annually reconcile the utility's actual bad debt
experience limited to the purchase of receivables program by
residential and small commercial customers within the program and
the actual incurred incremental costs to provide purchase of
receivables services with the cost estimates employed in setting
the initial or any subsequent discount rate, implementing
corresponding adjustments to the discount rate as necessary to
effect the reconciliations or new costs related to the program that
were not part of the original approved costs. The utility shall use
similar processes for collection from alternative electric supplier
customers whose receivables are purchased as those used for utility
customers. The commission shall not allow the utility to recover
uncollectible amounts associated with the electric supply provided
by the alternative electric supplier to its customers unless the
utility demonstrates to the commission that it has instituted
collection methods that reflect best practices as determined by the
commission.
(21) As used in subsections (18) to (20):
(a) "Administrative costs" means all of the electric utility's
or electric distribution utility's costs incurred in its
administration of the purchase of receivables program.
(b) "Qualifying alternative electric supplier" means an
alternative electric supplier that includes its charges for
electric sales made in a utility's service area on that utility's
bill.
(22) (17)
As used in subsections (1) and (15):(16):
(a) "Customer" means the building or facilities served through
a single existing electric billing meter and does not mean the
person, corporation, partnership, association, governmental body,
or other entity owning or having possession of the building or
facilities.
(b) "Standard tariff service" means, for each regulated
electric utility, the retail rates, terms, and conditions of
service approved by the commission for service to customers who do
not elect to receive generation service from alternative electric
suppliers.
Sec.
10c. (1) Except for a violation under section 10a(3)
10a(4) and as otherwise provided under this section, upon a
complaint or on the commission's own motion, if the commission
finds, after notice and hearing, that an electric utility or an
alternative electric supplier has not complied with a provision or
order issued under sections 10 through 10bb, the commission shall
order such remedies and penalties as necessary to make whole a
customer or other person who has suffered damages as a result of
the violation, including, but not limited to, 1 or more of the
following:
(a) Order the electric utility or alternative electric
supplier to pay a fine for the first offense of not less than
$1,000.00 or more than $20,000.00. For a second offense, the
commission shall order the person to pay a fine of not less than
$2,000.00 or more than $40,000.00. For a third and any subsequent
offense, the commission shall order the person to pay a fine of not
less than $5,000.00 or more than $50,000.00.
(b) Order a refund to the customer of any excess charges.
(c) Order any other remedies that would make whole a person
harmed, including, but not limited to, payment of reasonable
attorney fees.
(d) Revoke the license of the alternative electric supplier if
the commission finds a pattern of violations.
(e) Issue cease and desist orders.
(2) Upon a complaint or the commission's own motion, the
commission may conduct a contested case to review allegations of a
violation
under section 10a(3).10a(4).
(3) If the commission finds that a person has violated section
10a(3),
10a(4), the commission shall order remedies and penalties
to protect customers and other persons who have suffered damages as
a result of the violation, including, but not limited to, 1 or more
of the following:
(a) Order the person to pay a fine for the first offense of
not less than $20,000.00 or more than $30,000.00. For a second and
any subsequent offense, the commission shall order the person to
pay a fine of not less than $30,000.00 or more than $50,000.00. If
the commission finds that the second or any of the subsequent
offenses
were knowingly made in violation of section 10a(3),
10a(4), the commission shall order the person to pay a fine of not
more than $70,000.00. Each unauthorized action made in violation of
section
10a(3) 10a(4) shall be a separate offense under this
subdivision.
(b) Order an unauthorized supplier to refund to the customer
any amount greater than the customer would have paid to an
authorized supplier.
(c) Order an unauthorized supplier to reimburse an authorized
supplier an amount equal to the amount paid by the customer that
should have been paid to the authorized supplier.
(d) Order the refund of any amounts paid by the customer for
unauthorized services.
(e) Order a portion between 10% to 50% of the fine ordered
under subdivision (a) be paid directly to the customer who suffered
the
violation under section 10a(3).10a(4).
(f) If the person is licensed under this act, revoke the
license if the commission finds a pattern of violations of section
10a(3).10a(4).
(g) Issue cease and desist orders.
(4) Notwithstanding subsection (3), a fine shall not be
imposed
for a violation of section 10a(3) 10a(4) if the supplier
has
otherwise fully complied with section 10a(3) 10a(4) and
shows
that the violation was an unintentional and bona fide error which
occurred notwithstanding the maintenance of procedures reasonably
adopted to avoid the error. Examples of a bona fide error include
clerical, calculation, computer malfunction, programming, or
printing errors. An error in legal judgment with respect to a
supplier's
obligations under section 10a(3) 10a(4) is not a bona
fide error. The burden of proving that a violation was an
unintentional and bona fide error is on the supplier.
(5) If the commission finds that a party's position in a
complaint filed under subsection (2) is frivolous, the commission
shall award to the prevailing party their costs, including
reasonable attorney fees, against the nonprevailing party and their
attorney.
Sec. 10e. (1) An electric utility shall take all necessary
steps to ensure that merchant plants are connected to the
transmission and distribution systems within their operational
control. If the commission finds, after notice and hearing, that an
electric utility has prevented or unduly delayed the ability of the
plant to connect to the facilities of the utility, the commission
shall order remedies designed to make whole the merchant plant,
including, but not limited to, reasonable attorney fees. The
commission may also order fines of not more than $50,000.00 per day
that the electric utility is in violation of this subsection.
(2) A merchant plant may sell its capacity to alternative
electric suppliers, electric utilities, municipal electric
utilities, retail customers, or other persons. A merchant plant
making sales to retail customers is an alternative electric
supplier
and shall obtain a license under section 10a(2).10a(3).
(3) The commission shall establish standards for the
interconnection of merchant plants with the transmission and
distribution systems of electric utilities. The standards shall not
require an electric utility to interconnect with generating
facilities with a capacity of less than 100 kilowatts for parallel
operations. The standards shall be consistent with generally
accepted industry practices and guidelines and shall be established
to ensure the reliability of electric service and the safety of
customers, utility employees, and the general public. The merchant
plant will be responsible for all costs associated with the
interconnection unless the commission has otherwise allocated the
costs and provided for cost recovery.
(4) This section does not apply to interconnections or
transactions that are subject to the jurisdiction of the federal
energy regulatory commission.
Sec.
10g. (1) As used in sections 10 through 10bb:this act:
(a) "Alternative electric supplier" means a person selling
electric generation service to retail customers in this state.
Alternative electric supplier does not include a person who
physically delivers electricity directly to retail customers in
this state. An alternative electric supplier is not a public
utility.
(b) "Commission" means the Michigan public service commission
created in section 1.
(c) "Electric distribution utility" means an electric utility
that has divested or transferred its electric generating facilities
under this section.
(d) (c)
"Electric utility" means
that term as defined in
section 2 of the electric transmission line certification act, 1995
PA 30, MCL 460.562. Electric utility does not include an electric
distribution utility.
(e) "Independent affiliate" means a person or entity that
directly, or indirectly through 1 or more intermediates, is
controlled by, or is under common control with, another specified
entity.
(f) (d)
"Independent transmission
owner" means an independent
transmission company as that term is defined in section 2 of the
electric transmission line certification act, 1995 PA 30, MCL
460.562.
(g) "Interested party" means any person or alternative
electric supplier directly or indirectly affected by the proposed
divestiture or transfer.
(h) (e)
"Merchant plant" means
electric generating equipment
and associated facilities with a capacity of more than 100
kilowatts located in this state that are not owned and operated by
an electric utility.
(i) (f)
"Relevant market" means
either the Upper Peninsula or
the Lower Peninsula of this state.
(j) (g)
"Renewable energy source"
means energy generated by
solar, wind, geothermal, biomass, including waste-to-energy and
landfill gas, or hydroelectric.
(2) A school district aggregating electricity for school
properties or an exclusive aggregator for public or private school
properties is not an electric utility or a public utility for the
purpose of that aggregation.
(k) "Undue market power" means anticompetitive or
discriminatory conduct or influence, including, but not limited to,
unlawful acts of collusion, that prevents retail electric customers
in this state from obtaining the benefits of a properly functioning
and fully available competitive retail electric market.
(3) Within 90 days of the effective date of the amendatory act
that added this subsection, the commission shall promulgate rules
to ensure that all retail customers in this state of an electric
utility with 1,000,000 or more retail customers have a choice of
electric suppliers and that no such electric utility exhibits undue
market power. Within 60 days of the promulgation of the rules under
this subsection, an electric utility with 1,000,000 or more retail
customers shall file a plan with the commission to mitigate any
undue market power and ensure that all retail customers in this
state have a choice of electric suppliers. A plan may include, but
is not limited to, 1 of the following:
(a) Divestiture of the electric utility's electric generating
facilities in a competitive sale.
(b) Transfer of the electric utility's electric generating
facilities to an independent affiliate of the electric utility.
(4) The commission shall promulgate rules creating procedures
for the plan required under this section. The plan shall include,
but is not limited to, all of the following information:
(a) A concise summary of the terms and conditions of the
proposed plan.
(b) Copies of any material divestiture or transfer documents
if available.
(c) A summary of any projected impacts of the plan on electric
service in this state.
(d) Financial statements that are relevant to any divestiture
or transfer.
(5) Within 60 days from the date a plan is filed under this
section, interested parties, including the attorney general, may
file comments with the commission on the proposed plan.
(6) After notice and hearing and within 180 days from the date
a plan is filed under this section, the commission shall issue an
order approving or rejecting the proposed plan.
(7) An electric utility subject to this section shall provide
all interested parties access to all books, records, accounts,
documents, and any other data and information the commission
considers necessary to effectively assess the impact of the
proposed plan.
(8) In ensuring that all retail customers in this state of any
electric utility with 1,000,000 or more retail customers have a
choice of electric suppliers and that no such electric utility
exhibits undue market power, the commission shall consider all of
the following in its order and determination of whether or not to
approve a proposed plan:
(a) Whether the proposed action would have an adverse impact
on the rates of the customers affected by the plan.
(b) Whether the proposed action would have an adverse impact
on the provision of safe, reliable, and adequate electric service
in this state.
(c) Whether the proposed action is otherwise inconsistent with
public policy and interest.
(9) In approving a plan under this section, the commission may
impose reasonable terms and conditions on the plan to protect
electric customers in this state. If the commission determines that
a utility should recover stranded costs, the terms and conditions
shall include a requirement that net stranded costs are recovered
in a way that results in the lowest total costs for the customers
who are required to pay those net stranded costs.
(10) Nonpublic information and materials submitted by an
electric utility under this section clearly designated by that
utility as confidential are exempt from the freedom of information
act, 1976 PA 442, MCL 15.231 to 15.246. The commission shall issue
protective orders as necessary to protect information designated by
that utility as confidential.
(11) If an electric utility has divested or transferred its
electric generating facilities according to a plan approved under
this section, the electric utility shall become an electric
distribution utility. Except as otherwise provided in subsection
(13), an electric distribution utility shall not own, operate, or
control any electric generation facility.
(12) An electric distribution utility has an obligation to
connect and provide regulated distribution service to retail
customers within the electric distribution utility's assigned
service area at rates and on terms and conditions as authorized by
the commission.
(13) Except as otherwise provided in this section, within 2
years from the effective date of the amendatory act that added this
subsection, an electric utility with 1,000,000 or more retail
customers or an electric distribution utility may not sell or offer
for sale generation service to any retail consumer of electric
energy in this state, either directly or through an affiliate,
unless the utility implements and operates under a plan that is
approved by the commission under this section, is consistent with
the policies specified in section 10, and does all of the
following:
(a) If the commission requires divestiture or transfer, at a
minimum, divests or transfers all generation assets and generation-
related business activities except for an ownership interest in a
generation asset that the commission determines is necessary for
the electric distribution utility to perform its obligations as an
electric distribution utility in an efficient manner. Divestiture
or transfer may be in whole or in part to an independent affiliate
of the electric distribution utility for the provision of
competitive retail electric service, if the plan includes separate
accounting requirements, the code of conduct, and other measures
necessary to effectuate the policies in section 10.
(b) Proposes a methodology to determine the electric
distribution utility's net stranded costs and implementation costs,
if any.
(c) Satisfies the public interest in preventing unfair
competitive advantage and preventing undue market power.
(d) Ensures that the electric distribution utility will not
extend any undue preference or advantage to any affiliate,
division, or part of the electric distribution utility engaged in
the business of supplying standard tariff service, competitive
retail electric service, or any nonelectric product or service,
including, but not limited to, utility resources such as trucks,
tools, office equipment, office space, supplies, customer and
marketing information, advertising, billing and mailing systems,
personnel, and training, without compensation based upon fully
loaded embedded costs charged to the affiliate.
(e) Ensures that any affiliate, division, or part of an
electric distribution utility will not receive undue preference or
advantage from any other affiliate, division, or part of the
electric distribution utility engaged in the business of supplying
noncompetitive retail electric service.
(14) An electric utility may reject the terms and conditions
imposed by the commission under subsection (9) by filing different
terms and conditions within 30 days of the commission's proposal.
If the different terms and conditions proposed by the electric
utility are not approved by the commission, then the electric
utility must comply with the terms and conditions imposed by the
commission at that time and proceed with the transaction.
(15) If an electric utility has not completed a plan under
this section within 2 years from the effective date of the
amendatory act that added this subsection, the commission shall
obtain electric service for the customers of that electric utility
as provided in section 10a(2)(b).
(16) The commission shall, after a contested case proceeding,
annually issue an order approving for each electric distribution
utility a true-up adjustment to reconcile any overcollections or
undercollections of the preceding 12 months to ensure the recovery
of all amounts of net stranded costs in a competitively neutral
manner. The commission shall review the electric distribution
utility's net stranded cost recovery charges and securitization
charges implemented for the preceding 12 months and adjust the
stranded cost recovery charge, by way of supplemental surcharges or
credits, to allow the netting of stranded costs. The commission
shall consider the reasonableness and appropriateness of various
methods to determine net stranded costs, including, but not limited
to, all of the following:
(a) Evaluating the relationship of market value to the net
book value of generation assets and purchased power contracts.
(b) Evaluating net stranded costs based on the market price of
power plus any revenues from a regional transmission organization
or other sources in relation to revenues assumed by the commission
under cost of service regulation.
(c) Any other method the commission considers appropriate.
(17) If the commission finds that a utility exhibits undue
market power, the commission shall conduct an investigation and
refer its findings to the attorney general, the United States
department of justice, the United States securities and exchange
commission, or the federal energy regulatory commission, as
appropriate.
Sec. 10q. (1) A person shall not engage in the business of an
alternative electric supplier in this state unless the person
obtains and maintains a license issued under section 10a.
(2) In addition to any other information required by the
commission in connection with a licensing application, the
applicant shall be required to do both of the following:
(a) Provide information, including information as to the
applicant's safety record and its history of service quality and
reliability, as to the applicant's technical ability, as defined
under regulations of the commission, to safely and reliably
generate or otherwise obtain and deliver electricity and provide
any other proposed services.
(b) Demonstrate that the employees of the applicant that will
be installing, operating, and maintaining generation or
transmission facilities within this state, or any entity with which
the applicant has contracted to perform those functions within this
state, have the requisite knowledge, skills, and competence to
perform those functions in a safe and responsible manner in order
to provide safe and reliable service.
(3) The commission shall order the applicant to post a bond or
provide a letter of credit or other financial guarantee in a
reasonable amount established by the commission of not less than
$40,000.00, if the commission finds after an investigation and
review that the requirement of a bond would be in the public
interest.
(4)
Only investor-owned, cooperative, or municipal electric
utilities, or electric distribution utilities shall own, construct,
or operate electric distribution facilities or electric meter
equipment used in the distribution of electricity in this state.
This subsection does not prohibit a self-service power provider
from owning, constructing, or operating electric distribution
facilities or electric metering equipment for the sole purpose of
providing or utilizing self-service power. This act does not affect
the current rights, if any, of a nonutility to construct or operate
a private distribution system on private property or private
easements. This does not preclude crossing of public rights-of-way.
(5) The commission shall not prohibit an electric utility from
metering and billing its customers for services provided by the
electric utility.
Sec. 10bb. (1) Aggregation may be used for the purchasing of
electricity and related services from an alternative electric
supplier.
(2) Local units of government, public and private schools,
universities, and community colleges may aggregate for the purpose
of purchasing electricity for themselves or for residential
customers and small commercial customers within their boundaries.
with
the written consent of each customer aggregated. Customers
Residential customers and small commercial customers within a local
unit
of government shall continue to have the right to choose their
electricity
supplier and are not required to may
choose not to
purchase electricity through the aggregator. Local units of
government may aggregate for the purpose of purchasing electricity
for large commercial customers and industrial customers within
their boundaries with the written or electronic consent of each of
those customers aggregated.
(3)
As used in this section: , "aggregation"
(a) "Aggregation" means the combining of electric loads of
multiple retail customers or a single customer with multiple sites
to
facilitate the provision of electric service to such those
customers.
(b) "Large commercial customer" means a commercial customer
with an electric demand of greater than 25 kilowatts.
(c) "Small commercial customer" means a commercial customer
with an electric demand of 25 kilowatts or less.