Bill Text: MI HB5042 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Public utilities; electric utilities; eligibility to purchase electricity from an alternative electric supplier; include facilities owned or leased by this state or its political subdivisions. Amends sec. 10a of 1939 PA 3 (MCL 460.10a).

Spectrum: Partisan Bill (Republican 5-0)

Status: (Introduced - Dead) 2015-11-04 - Printed Bill Filed 11/04/2015 [HB5042 Detail]

Download: Michigan-2015-HB5042-Introduced.html

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HOUSE BILL No. 5042

November 3, 2015, Introduced by Reps. Chatfield, Glenn, Kelly, Hooker and Runestad and referred to the Committee on Energy Policy.

 

     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 section 10a (MCL 460.10a), as amended by 2008 PA 286.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 to choose an

 

alternative electric supplier. The orders 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 that 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 may 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 may 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.

 

     (e) Notwithstanding any other provision of this section, a

 

facility owned or leased by this state or a political subdivision

 

of this state may 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. Any customer purchasing electricity from an

 

alternative electric supplier under this subdivision, or any behind

 

the meter generation or supply, shall not count toward any limit

 

set forth in subdivision (a). As used in this subdivision,

 

"political subdivision" means a county, city, village, township, or

 

authority.

 

     (f) A retail customer purchasing its electricity under

 

subdivision (e) shall submit an affidavit to the commission

 

affirming that the customer meets at least 1 of the criteria set

 

forth in subdivision (e). Any challenges to the affidavit or the

 

eligibility of the retail customer shall be submitted to the

 

commission within 10 days of the affidavit being filed. If the

 

commission finds reasonable cause for the challenge, it shall

 

commence an investigation, hold hearings, and issue its findings

 

and order on the matter under the contested case provisions of

 

chapter 4 of the administrative procedures act of 1969, 1969 PA

 

306, MCL 24.271 to 24.287.

 

     (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 that 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.

 

     (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.

 

     (4) No later than December 2, 2000, the The commission shall

 

establish a code of conduct that shall apply applies 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 is also be

 

applicable to electric utilities and alternative electric suppliers

 

consistent with section 10, this section, and sections 10b through

 

10cc.

 

     (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). 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.

 

     (6) A utility offering a program under subsection (5) 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.

 

     (7) All costs directly attributable to an appliance service

 

program allowed under subsection (5) 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.

 

     (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).

 

     (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.

 

     (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 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) 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 If 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.

 

     (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.

 

     (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.

 

     (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

 

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 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.

 

     (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.

 

     (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 are 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.

 

     (15) A customer who that 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.

 

     (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 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.

 

     (17) As used in subsections (1) and (15):

 

     (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.

 

     (18) 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.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.