Bill Text: MI HB5733 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Public utilities; electric utilities; electric customers' ability to choose an alternative electric supplier; modify. Amends title & secs. 10 & 10a of 1939 PA 3 (MCL 460.10 & 460.10a).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-06-14 - Printed Bill Filed 06/14/2012 [HB5733 Detail]

Download: Michigan-2011-HB5733-Introduced.html

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HOUSE BILL No. 5733

 

June 13, 2012, Introduced by Rep. Horn 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 the title and sections 10, and 10a (MCL 460.10 and

 

460.10a), the title as amended by 2005 PA 190 and sections 10 and

 

10a as amended by 2008 PA 286.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     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.

 

     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 suppliers.

 

     (a) (b) To allow and encourage the Michigan public service

 

commission to foster competition in this state in the provision of

 

electric supply and maintain regulation of electric supply for

 

customers who continue to choose supply from incumbent electric

 

utilities.

 

     (c) To encourage the development and construction of merchant

 

plants which will diversify the ownership of electric generation in

 

this state.

 

     (b) (d) To ensure that all persons in this state are afforded

 

safe, reliable electric power at a reasonable rate.

 

     (c) (e) To improve the opportunities for economic development

 

in this state and to promote financially healthy and competitive

 

utilities in this state.

 

     (d) (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.

 

     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 are taking electric service

 

from an alternative electric supplier at a facility on the

 

effective date of the amendatory act that added this subdivision

 

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.

 

     (1) Beginning on the effective date of the amendatory act that

 

added this sentence, all of the following apply to electric service

 

in this state:

 

     (a) A customer who receives electric generation service from

 

an electric utility on the effective date of the amendatory act

 

that added this sentence shall continue to receive electric

 

generation service from that electric utility and is not eligible

 

to receive electric generation service from an alternative electric

 

supplier. Any customer who becomes a customer after the effective

 

date of the amendatory act that added this sentence is entitled to

 

receive standard tariff service and is not eligible to receive

 

electric generation service from an alternative electric supplier.

 

     (b) A customer who receives electric generation service from

 

an alternative electric supplier on the effective date of the

 

amendatory act that added this sentence may subsequently provide

 

notice to an electric utility of the customer's desire to receive

 

standard tariff service from the electric utility during or at the

 

conclusion of the term of its existing contract with the

 

alternative electric supplier. If a customer elects to receive

 

standard tariff service from an electric utility under this

 

subdivision, the customer is no longer eligible to receive electric

 

generation service from an alternative electric supplier.

 

     (c) A customer who receives electric generation service from

 

an alternative electric supplier on the effective date of the

 

amendatory act that added this sentence and enters into a new

 

contract with an alternative electric supplier at the conclusion of

 

the term of its existing contract shall no longer have the right to

 

receive standard tariff service from the electric utility.

 

     (d) (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 that is similar in nature if the

 

customer owns more than 50% of the new facility.

 

     (e) (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 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 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 if 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 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 Except as otherwise provided in subsection (1), 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 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.

 

     (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:

 

     (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.

 

     (c) "Appliance service program" or "program" means a

 

subscription program for the repair and servicing of heating and

 

cooling systems or other appliances.