March 21, 2012, Introduced by Reps. Shirkey, Price, Agema, Opsommer, Genetski, McMillin, Lipton, MacMaster and Meadows 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 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 or a percentage determined by the commission under subdivision
(e) 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% the percentage
set forth in subdivision (a) or the
percentage determined by the commission under subdivision (e) 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% the
percentage set forth in
subdivision (a) or the percentage determined by the commission
under subdivision (e) of the serving electric utility's average
weather-adjusted retail sales.
(e) The electric choice cap for an electric utility that has
implemented securitization charges authorized by the commission
shall be determined as follows:
(i) Within 30 days of the effective date of the amendatory act
that added this subdivision, the commission shall, for the
remainder of that calendar year, set the electric choice cap to be
the greatest of the following:
(A) 10%.
(B) A percentage equal to the percentage of weather-adjusted
retail sales for the preceding calendar year allotted to customers
taking service from an alternative electric supplier on the
effective date of the amendatory act that added this subdivision
plus the percentage of weather-adjusted retail sales for the
preceding calendar year represented by additional customers
requesting service from an alternative electric supplier on the
effective date of the amendatory act that added this subdivision
but who have not received an allotment under this subsection. The
commission shall ensure that any customer requesting service from
an alternative electric supplier on or before the effective date of
the amendatory act that added this subdivision is allowed to
purchase electricity from an alternative electric supplier.
(C) The highest percentage, determined on a calendar-year
basis for years 2000 through 2012, of weather-adjusted retail sales
for the preceding calendar year representing customers who took
service from an alternative electric supplier. The commission shall
ensure that any customer requesting service from an alternative
electric supplier on or before the effective date of the amendatory
act that added this subdivision is allowed to purchase electricity
from an alternative electric supplier.
(ii) For each of the 3 calendar years following the calendar
year in which the amendatory act that added this subdivision takes
effect, the commission shall, at the beginning of each calendar
year, increase the electric choice cap for a utility subject to
this subdivision from its then current percentage by 6%. The
commission shall do each of the following:
(A) Ensure that any and all savings by the utility, including,
but not limited to, fuel, power purchase costs, and increased
wholesale revenues, due to an increase in the retail sales
associated with customers taking service from an alternative
electric supplier are passed through to full-service customers
through the utility's power supply cost recovery proceedings.
(B) In setting rates for the utility, recognize the effect of
an increase or decrease in the retail sales associated with
customers taking service from an alternative electric supplier,
either through a revenue decoupling mechanism or through a test
year used for setting rates that begins after the effective date of
the amendatory act that added this subdivision.
(iii) On and after the beginning of the fourth calendar year
following the calendar year in which the amendatory act that added
this subdivision takes effect, if the electric choice cap has been
reached for an electric utility and the allotment of retail sales
represented by customers requesting service from an alternative
electric supplier who cannot be served under the existing electric
choice cap exceeds 2% of the electric utility's weather-adjusted
retail sales for the preceding calendar year, then the commission
shall, within 30 days, initiate a contested case to determine if
the electric choice cap should be increased. Within 180 days of the
initiation of the contested case, the commission shall issue an
order increasing an electric utility's electric choice cap by the
percentage of weather-adjusted retail sales represented by those
customers requesting service from an alternative electric supplier
plus 3% of the utility's weather-adjusted retail sales for the
preceding calendar year unless it finds, based on the evidentiary
record in the contested case, that increasing the electric choice
cap will cause substantial harm to full-service customers. In
determining whether an increase in the customer choice cap will
result in substantial harm to full-service customers, the
commission shall consider all the costs and savings experienced or
expected to be experienced by full-service customers based on the
difference between costs and savings with and without the proposed
percentage increase in the electric choice cap, including, but not
limited to, the costs and savings of fuel, purchased power,
wholesale sales, investment in new or existing generating
facilities, and purchase, lease, or acquisition of generating
capacity. The commission shall not initiate more than 1 contested
case for an electric utility under this subdivision in any 12-month
period.
(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.
(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 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 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 that
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 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 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 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 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) "Electric choice cap" means the limit on a utility's
weather-adjusted retail sales that may take service from an
alternative electric supplier, as specified in subsection (1)(a) or
as determined by the commission under subsection (1)(e).
(c) "Full-service customer" means a retail customer of an
electric utility who does not take service from an alternative
electric supplier.
(d) "Securitization charges" means that term as defined in
section 10h.
(e) (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.