Bill Text: MI SB0438 | 2015-2016 | 98th Legislature | Introduced
Bill Title: Energy; alternative sources; renewable energy standards and electric energy optimization standards; eliminate, and establish distributed generation program and on bill financing of residential energy improvements.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2016-12-28 - Assigned Pa 0342'16 [SB0438 Detail]
Download: Michigan-2015-SB0438-Introduced.html
SENATE BILL No. 438
July 1, 2015, Introduced by Senator PROOS and referred to the Committee on Energy and Technology.
A bill to amend 2008 PA 295, entitled
"Clean, renewable, and efficient energy act,"
by amending the title, the headings of subparts B and C of part 2
and part 5, and sections 1, 3, 5, 7, 9, 11, 13, 41, 47, 71, 73, 75,
77, 81, 83, 85, 87, 89, 91, 93, 95, 97, 113, 173, 175, 177, and 179
(MCL 460.1001, 460.1003, 460.1005, 460.1007, 460.1009, 460.1011,
460.1013, 460.1041, 460.1047, 460.1071, 460.1073, 460.1075,
460.1077, 460.1081, 460.1083, 460.1085, 460.1087, 460.1089,
460.1091, 460.1093, 460.1095, 460.1097, 460.1113, 460.1173,
460.1175, 460.1177, and 460.1179), section 93 as amended by 2010 PA
269, and by adding subpart B to part 2, sections 72, 74, 77a, 78,
89a, 91a, 98, and 99, and part 7; and to repeal acts and parts of
acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to require certain providers of electric service to
establish
renewable clean energy programs; to require certain
providers of electric or natural gas service to establish energy
optimization
waste reduction programs; to authorize the use of
certain energy systems to meet the requirements of those programs;
to
provide for the approval of energy optimization waste reduction
service
companies; to provide for certain charges on electric and
natural
gas bills; to promote energy conservation to reduce energy
waste by state agencies and the public; to create a wind energy
resource zone board and provide for its power and duties; to
authorize the creation and implementation of wind energy resource
zones; to provide for expedited transmission line siting
certificates;
to provide for a customer
generation and net metering
program
programs and the responsibilities of certain providers of
electric service and customers with respect to customer generation
and net metering; to provide for fees; to prescribe the powers and
duties of certain state agencies and officials; to require the
promulgation of rules and the issuance of orders; to authorize the
establishment of residential energy improvement programs by
providers of electric or natural gas service; and to provide for
civil sanctions, remedies, and penalties.
Sec. 1. (1) This act shall be known and may be cited as the
"clean ,
renewable, and efficient energy
act".
(2)
The purpose of this act is to promote the development of
clean
energy, renewable energy, and energy optimization through the
implementation
of a clean, renewable, and energy efficient standard
and use of clean energy resources and the reduction of energy waste
through programs that will cost-effectively do all of the
following:
(a) Diversify the resources used to reliably meet the energy
needs of consumers in this state.
(b) Provide greater energy security through the use of
indigenous energy resources available within the state.
(c)
Encourage private investment in renewable clean energy and
energy
efficiency.waste
reduction.
(d)
Provide Coordinate with
federal regulations to provide
improved air quality and other benefits to energy consumers and
citizens of this state.
Sec. 3. As used in this act:
(a) "Advanced cleaner energy" means electricity generated
using an advanced cleaner energy system.
(b)
"Advanced cleaner energy credit" means a credit certified
under
section 43 that represents generated advanced cleaner energy.
(b) (c)
"Advanced cleaner energy
system" means any of the
following:
(i) A gasification facility.
(ii) An industrial A cogeneration
facility.
(iii) A coal-fired electric generating facility if 85% or more
of the carbon dioxide emissions are captured and permanently
geologically sequestered or used for other commercial or industrial
purposes that do not result in release of carbon dioxide to the
atmosphere.
(iv) A hydroelectric pumped storage facility.
(v) (iv) An
electric generating facility or system that uses
technologies
not in commercial operation on the effective date of
this
act.October 6, 2008, and that
the commission determines has
carbon dioxide emissions benefits or will significantly reduce
other regulated air emissions.
(c) (d)
"Affiliated transmission
company" means that term as
defined in section 2 of the electric transmission line
certification act, 1995 PA 30, MCL 460.562.
(d) (e)
"Applicable regional
transmission organization" means
a nonprofit, member-based organization governed by an independent
board
of directors that serves as the federal energy regulatory
commission-approved
regional transmission organization approved by
the Federal Energy Regulatory Commission with oversight
responsibility for the region that includes the provider's service
territory.
(e) (f)
"Biomass" means any
organic matter that is not derived
from fossil fuels, that can be converted to usable fuel for the
production of energy, and that replenishes over a human, not a
geological, time frame, including, but not limited to, all of the
following:
(i) Agricultural crops and crop wastes.
(ii) Short-rotation energy crops.
(iii) Herbaceous plants.
(iv) Trees and wood, but only if derived from sustainably
managed forests or procurement systems, as defined in section 261c
of the management and budget act, 1984 PA 431, MCL 18.1261c.
(v) Paper and pulp products.
(vi) Precommercial wood thinning waste, brush, or yard waste.
(vii) Wood wastes and residues from the processing of wood
products or paper.
(viii) Animal wastes.
(ix) Wastewater sludge or sewage.
(x) Aquatic plants.
(xi) Food production and processing waste.
(xii) Organic by-products from the production of biofuels.
(f) (g)
"Board" means the wind
energy resource zone board
created under section 143.
(h)
"Carbon dioxide emissions benefits" means that the carbon
dioxide
emissions per megawatt hour of electricity generated by the
advanced
cleaner energy system are at least 85% less or, for an
integrated
gasification combined cycle facility, 70% less than the
average
carbon dioxide emissions per megawatt hour of electricity
generated
from all coal-fired electric generating facilities
operating
in this state on January 1, 2008.
(g) "Clean energy" means electricity generated using a clean
energy resource.
(h) "Clean energy resource" means an electric generation
technology that meets all current state and federal air emissions
regulations or qualifies under United States Environmental
Protection Agency regulations as being carbon neutral. Clean energy
resource includes, but is not limited to, a fossil fuel generation
technology in which at least 85% of the carbon dioxide emissions
are captured and permanently sequestered or used for other
commercial or industrial purposes that do not result in the release
of carbon dioxide into the atmosphere.
(i) "Clean energy system" means a facility, electricity
generation system, or set of electricity generation systems that
use 1 or more clean energy resources to generate electricity.
(j) "Cogeneration facility" means a facility that produces
both electricity and another form of useful thermal energy, such as
heat or steam, in a way that is more efficient than the separate
production of those forms of energy.
(k) (i)
"Commission" means the
Michigan public service
commission.
(l) (j)
"Customer meter" means an
electric meter of a
provider's retail customer. Customer meter does not include a
municipal water pumping meter or additional meters at a single site
that were installed specifically to support interruptible air
conditioning, interruptible water heating, net metering, or time-
of-day tariffs.
(m) "Distributed generation program" means the program
established by the commission under section 173.
Sec. 5. As used in this act:
(a)
"Electric provider", subject to sections 21(1), 23(1), and
25(1),
except as used in part 7, means any of the following:
(i) Any person or entity that is regulated by the commission
for the purpose of selling electricity to retail customers in this
state.
(ii) A municipally-owned electric utility in this state.
(iii) A cooperative electric utility in this state.
(iv) Except as used in subpart B C of
part 2, an alternative
electric supplier licensed under section 10a of 1939 PA 3, MCL
460.10a.
(b)
"Eligible electric generator" means that a methane
digester
or renewable clean energy system with a generation
capacity
limited to the customer's electric need and that does not
exceed the following:
(i) For a renewable clean energy
system, 150 kilowatts of
aggregate generation at a single site.
(ii) For a methane digester, 550 kilowatts of aggregate
generation at a single site.
(c) "Energy conservation" means the reduction of customer
energy use through the installation of measures or changes in
energy usage behavior. Energy conservation does not include the use
of advanced cleaner energy systems.
(d) "Energy efficiency" means a decrease in customer
consumption of electricity or natural gas achieved through measures
or programs including prepay energy programs that target customer
behavior, equipment, devices, or materials without reducing the
quality of energy services.
(e) "Energy star" means the voluntary partnership among the
United States Department of Energy, the United States Environmental
Protection Agency, product manufacturers, local utilities, and
retailers to help promote energy efficient products by labeling
with the energy star logo, educate consumers about the benefits of
energy efficiency, and help promote energy efficiency in buildings
by benchmarking and rating energy performance.
(f) (e)
"Energy optimization",
waste reduction", subject to
subdivision
(f), (g), means all of the following:
(i) Energy efficiency.
(ii) Load management, to the extent that the load management
reduces overall energy usage.
(iii) Energy conservation, but only to the extent that the
decreases in the consumption of electricity produced by energy
conservation are objectively measurable and attributable to an
energy
optimization waste
reduction plan.
(g) (f)
Energy optimization waste reduction does not include
electric provider infrastructure projects that are approved for
cost recovery by the commission other than as provided in this act.
(h) (g)
"Energy optimization waste reduction credit" means a
credit certified pursuant to section 87 that represents achieved
energy
optimization.waste
reduction.
(i) (h)
"Energy optimization waste reduction plan" or "EO
plan"
means a plan under section 71 or 72, as applicable.
(j) (i)
"Energy optimization waste reduction standard" means
the minimum energy savings required to be achieved under section 77
or 77a, as applicable.
(j)
"Energy star" means the voluntary partnership among the
United
States department of energy, the United States environmental
protection
agency, product manufacturers, local utilities, and
retailers
to help promote energy efficient products by labeling
with
the energy star logo, educate consumers about the benefits of
energy
efficiency, and help promote energy efficiency in buildings
by
benchmarking and rating energy performance.
(k) "Federal approval" means approval by the applicable
regional transmission organization or other federal energy
regulatory commission approved transmission planning process of a
transmission project that includes the transmission line. Federal
approval may be evidenced in any of the following manners:
(i) The proposed transmission line is part of a transmission
project included in the applicable regional transmission
organization's board-approved transmission expansion plan.
(ii) The applicable regional transmission organization has
informed the electric utility, affiliated transmission company, or
independent transmission company that a transmission project
submitted for an out-of-cycle project review has been approved by
the applicable regional transmission organization, and the approved
transmission project includes the proposed transmission line.
(iii) If, after the effective date of this act, October 6,
2008, the applicable regional transmission organization utilizes
another approval process for transmission projects proposed by an
electric utility, affiliated transmission company, or independent
transmission company, the proposed transmission line is included in
a transmission project approved by the applicable regional
transmission organization through the approval process developed
after
the effective date of this act.October
6, 2008.
(iv) Any other federal energy regulatory commission
approved
Federal Energy Regulatory Commission-approved transmission planning
process for a transmission project.
Sec. 7. As used in this act:
(a) "Gasification facility" means a facility located in this
state
that, uses using a thermochemical
process that does not
involve
direct combustion, to produce produces synthesis gas,
composed of carbon monoxide and hydrogen, from carbon-based
feedstocks (such as coal, petroleum coke, wood, biomass, hazardous
waste, medical waste, industrial waste, and solid waste, including,
but not limited to, municipal solid waste, electronic waste, and
waste described in section 11514 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.11514) and that
uses the synthesis gas or a mixture of the synthesis gas and
methane to generate electricity for commercial use. Gasification
facility includes the transmission lines, gas transportation lines
and facilities, and associated property and equipment specifically
attributable to such a facility. Gasification facility includes,
but is not limited to, an integrated gasification combined cycle
facility and a plasma arc gasification facility.
(b) "Incremental costs of compliance" means the net revenue
required by an electric provider to comply, before the effective
date of the 2015 amendatory act that amended this section, with the
former renewable energy standard, calculated as provided under
section 47.
(c) "Independent transmission company" means that term as
defined in section 2 of the electric transmission line
certification act, 1995 PA 30, MCL 460.562.
(d)
"Industrial cogeneration facility" means a facility that
generates
electricity using industrial thermal energy or industrial
waste
energy.
(e)
"Industrial thermal energy" means thermal energy that is a
by-product
of an industrial or manufacturing process and that would
otherwise
be wasted. For the purposes of this subdivision,
industrial
or manufacturing process does not include the generation
of
electricity.
(f)
"Industrial waste energy" means exhaust gas or flue gas
that
is a by-product of an industrial or manufacturing process and
that
would otherwise be wasted. For the purposes of this
subdivision,
industrial or manufacturing process does not include
the
generation of electricity.
(d) "Inflow" means the number of metered kilowatt hours that a
customer participating in the distributed generation program
receives from an electric utility during a billing period.
(e) (g)
"Integrated gasification
combined cycle facility"
means a gasification facility that uses a thermochemical process,
including high temperatures and controlled amounts of air and
oxygen, to break substances down into their molecular structures
and that uses exhaust heat to generate electricity.
(f) (h)
"LEED" means the
leadership in energy and
environmental design green building rating system developed by the
United
States green building council.Green
Building Council.
(g) (i)
"Load management" means
measures or programs that
target equipment or devices to result in decreased peak electricity
demand such as by shifting demand from a peak to an off-peak
period.
(j)
"Modified net metering" means a utility billing method
that
applies the power supply component of the full retail rate to
the
net of the bidirectional flow of kilowatt hours across the
customer
interconnection with the utility distribution system,
during
a billing period or time-of-use pricing period. A negative
net
metered quantity during the billing period or during each time-
of-use
pricing period within the billing period reflects net excess
generation
for which the customer is entitled to receive credit
under
section 177(4). Standby charges for modified net metering
customers
on an energy rate schedule shall be equal to the retail
distribution
charge applied to the imputed customer usage during
the
billing period. The imputed customer usage is calculated as the
sum
of the metered on-site generation and the net of the
bidirectional
flow of power across the customer interconnection
during
the billing period. The commission shall establish standby
charges
for modified net metering customers on demand-based rate
schedules
that provide an equivalent contribution to utility system
costs.
Sec. 9. As used in this act:
(a) "Natural gas provider" means an investor-owned business
engaged in the sale and distribution at retail of natural gas
within this state whose rates are regulated by the commission.
However,
as used in subpart B of part 2, natural gas provider does
not
include an alternative gas supplier licensed under section 9b
of
1939 PA 3, MCL 460.9b.
(b) "Net metering" means an electric utility billing method
that applies to customers with an on-site clean energy system that
is interconnected with the utility's distribution system and that
is enrolled in an electric utility's net metering program.
(c) "Outflow" means the number of metered kilowatt hours
delivered into the electric utility's distribution system from
customers participating in the distributed generation program
during a billing period.
(d) (b)
"Plasma arc gasification
facility" means a
gasification facility that uses a plasma torch to break substances
down into their molecular structures.
(e) (c)
"Provider" means an
electric provider or a natural gas
provider.
(f) (d)
"PURPA" means the public
utility regulatory policies
act of 1978, Public Law 95-617.
(g) (e)
"Qualifying small power
production facility" means
that term as defined in 16 USC 824a-3.
Sec. 11. As used in this act:
(a) "Renewable energy" means electricity generated using a
renewable energy system.
(b) "Renewable energy capacity portfolio" means the number of
megawatts calculated under former section 27(2) for a particular
year.
(c) "Renewable energy contract" means a contract to acquire
renewable energy and the associated renewable energy credits from 1
or more renewable energy systems.
(d)
"Renewable energy credit" means a credit granted pursuant
to
under a certification and
tracking program established under
section
41, that which represents generated renewable energy.
(e) "Renewable energy credit portfolio" means the sum of the
renewable energy credits achieved by a provider for a particular
year.
(f)
"Renewable energy credit standard" means a minimum
renewable
energy portfolio required under section 27.
(g)
"Renewable energy generator" means a person that, together
with
its affiliates, has constructed or has owned and operated 1 or
more
renewable energy systems with combined gross generating
capacity
of at least 10 megawatts.
(f) (h)
"Renewable energy plan"
or "plan" , means
a plan
approved under former section 21 or former section 23 or found to
comply with this act under former section 25, with any amendments
adopted under this act.
(g) (i)
"Renewable energy
resource" means a resource that
naturally replenishes over a human, not a geological, time frame
and that is ultimately derived from solar power, water power, or
wind power. Renewable energy resource does not include petroleum,
nuclear, natural gas, or coal. A renewable energy resource comes
from the sun or from thermal inertia of the earth and minimizes the
output of toxic material in the conversion of the energy and
includes, but is not limited to, all of the following:
(i) Biomass.
(ii) Solar and solar thermal energy.
(iii) Wind energy.
(iv) Kinetic energy of moving water, including all of the
following:
(A) Waves, tides, or currents.
(B) Water released through a dam.
(v) Geothermal energy.
(vi) Municipal solid waste.
(vii) Landfill gas produced by municipal solid waste.
(h) (j)
"Renewable energy
standard" means the minimum
renewable energy capacity portfolio, if applicable, and the
renewable energy credit portfolio that was required to be achieved
under former section 27.
(i) (k)
"Renewable energy system"
means a facility,
electricity generation system, or set of electricity generation
systems that use 1 or more renewable energy resources to generate
electricity.
Renewable energy system does not include any of the
following:
(i) A hydroelectric pumped storage facility.
(ii) A hydroelectric facility that uses a dam
constructed
after
the effective date of this act unless the dam is a repair or
replacement
of a dam in existence on the effective date of this act
or
an upgrade of a dam in existence on the effective date of this
act
that increases its energy efficiency.
(iii) An an
incinerator unless the incinerator is a
municipal
solid waste incinerator as defined in section 11504 of the natural
resources and environmental protection act, 1994 PA 451, MCL
324.11504,
that was brought into service before the effective date
of
this act, October 6, 2008, including any of the following:
(i) (A)
Any upgrade of such an incinerator
that increases
energy efficiency.
(ii) (B)
Any expansion of such an
incinerator before the
effective
date of this act.October 6,
2008.
(iii) (C)
Any expansion of such an
incinerator on or after the
effective
date of this act October 6,
2008 to an approximate design
rated capacity of not more than 950 tons per day pursuant to the
terms of a final request for proposals issued on or before October
1, 1986.
(j) (l) "Revenue
recovery mechanism" means the mechanism for
recovery of incremental costs of compliance established under
former section 21.
Sec. 13. As used in this act:
(a) "Site" means a contiguous site, regardless of the number
of meters at that site. A site that would be contiguous but for the
presence
of a street, road, or highway shall be is considered to be
contiguous for the purposes of this subdivision.
(b) "Transmission line" means all structures, equipment, and
real property necessary to transfer electricity at system bulk
supply voltage of 100 kilovolts or more.
(c)
"True net metering" means a utility billing method that
applies
the full retail rate to the net of the bidirectional flow
of
kilowatt hours across the customer interconnection with the
utility
distribution system, during a billing period or time-of-use
pricing
period. A negative net metered quantity during the billing
period
or during each time-of-use pricing period within the billing
period
reflects net excess generation for which the customer is
entitled
to receive credit under section 177(4).
(c) (d)
"Utility system resource cost
test" means a standard
that
is met for an investment in energy optimization waste
reduction if, on a life cycle basis, the total avoided supply-side
costs to the provider, including representative values for
electricity
or natural gas supply,
transmission, distribution, and
other associated costs or, before January 1, 2019, electricity
supply, transmission, distribution, and other associated costs, are
greater than the total costs to the provider of administering and
delivering
the energy optimization waste
reduction program,
including net costs for any provider incentives paid by customers
and capitalized costs recovered under section 89.
(d) (e)
"Wind energy conversion
system" means a renewable
energy
system that uses 1 or more wind
turbines to generate
electricity and has a nameplate capacity of 100 kilowatts or more.
(e) (f)
"Wind energy resource
zone" or "wind zone" means an
area designated by the commission under section 147.
Sec. 41. (1) Renewable energy credits may be traded, sold, or
otherwise transferred.
(2)
An electric provider is responsible for demonstrating that
a
renewable energy credit used to comply with a renewable energy
credit
standard is derived from a renewable energy source and that
the
electric provider has not previously used or traded, sold, or
otherwise
transferred the renewable energy credit.
(3)
The same renewable energy credit may be used by an
electric
provider to comply with both a federal standard for
renewable
energy and the renewable energy standard under this
subpart.
An electric provider that uses a renewable energy credit
to
comply with another state's standard for renewable energy shall
not
use the same renewable energy credit to comply with the
renewable
energy credit standard under this subpart.
(2) (4)
The commission shall establish a
renewable energy
credit certification and tracking program. The certification and
tracking program may be contracted to and performed by a third
party through a system of competitive bidding. The program shall
include all of the following:
(a) A process to certify renewable energy systems, including
all
existing renewable energy systems operating on the effective
date
of this act, October 6, 2008 as eligible to receive renewable
energy credits.
(b) A process for verifying that the operator of a renewable
energy system is in compliance with state and federal law
applicable to the operation of the renewable energy system when
certification is granted. If a renewable energy system becomes
noncompliant with state or federal law, renewable energy credits
shall not be granted for renewable energy generated by that
renewable energy system during the period of noncompliance.
(c) A method for determining the date on which a renewable
energy credit is generated and valid for transfer.
(d) A method for transferring renewable energy credits.
(e) A method for ensuring that each renewable energy credit
transferred under this act is properly accounted for under this
act.
(f) If the system is established by the commission, allowance
for issuance, transfer, and use of renewable energy credits in
electronic form.
(g)
A method for ensuring that both a renewable energy credit
and
an advanced cleaner energy credit are not awarded for the same
megawatt
hour of energy.
(5)
A renewable energy credit purchased from a renewable
energy
system in this state is not required to be used in this
state.
Sec.
47. (1) Subject to the retail rate impact limits under
section
45, the For an electric
provider whose rates are regulated
by the commission, the commission shall determine the appropriate
charges, which shall be included in the electric provider's
tariffs, to permit recovery of the incremental cost of compliance.
The commission shall consider all actual costs reasonably and
prudently incurred in good faith to implement a commission-approved
renewable energy plan by an electric provider whose rates are
regulated by the commission to be a cost of service to be recovered
by
the electric provider. Subject to the retail rate impact limits
under
section 45, an An electric provider whose rates are regulated
by the commission shall recover through its retail electric rates
all of the electric provider's incremental costs of compliance
during the 20-year period beginning when the electric provider's
plan is approved by the commission and all reasonable and prudent
ongoing costs of compliance during and after that period. The
recovery
shall include, but is not limited to, the both of the
following:
(a) The electric provider's authorized rate of return on
equity for costs approved under this section, which shall remain
fixed at the rate of return and debt to equity ratio that was in
effect in the electric provider's base rates when the electric
provider's renewable energy plan was approved.
(b) Costs associated with a facility approved for cost
recovery before the effective date of the 2015 amendatory act that
amended this section.
(2) Incremental costs of compliance shall be calculated as
follows:
(a) Determine the sum of the following costs to the extent
those costs are reasonable and prudent and not already approved for
recovery
in electric rates as of the effective date of this
act:October 6, 2008:
(i) Capital, operating, and maintenance costs of renewable
energy systems or advanced cleaner energy systems, including
property taxes, insurance, and return on equity associated with an
electric provider's renewable energy systems or advanced cleaner
energy systems, including the electric provider's renewable energy
portfolio established to achieve compliance with the renewable
energy standards and any additional renewable energy systems or
advanced cleaner energy systems, that are built or acquired by the
electric provider to maintain compliance with the renewable energy
standards during the 20-year period beginning when the electric
provider's plan is approved by the commission.
(ii) Financing costs attributable to capital, operating, and
maintenance costs of capital facilities associated with renewable
energy systems or advanced cleaner energy systems used to meet the
renewable energy standard.
(iii) Costs that are not otherwise recoverable in rates
approved
by the federal energy regulatory commission Federal Energy
Regulatory Commission and that are related to the infrastructure
required to bring renewable energy systems or advanced cleaner
energy systems used to achieve compliance with the renewable energy
standards on to the transmission system, including interconnection
and substation costs for renewable energy systems or advanced
cleaner energy systems used to meet the renewable energy standard.
(iv) Ancillary service costs determined by the commission to
be necessarily incurred to ensure the quality and reliability of
renewable energy or advanced cleaner energy used to meet the
renewable energy standards, regardless of the ownership of a
renewable energy system or advanced cleaner energy
technology.system.
(v) Except to the extent the costs are allocated under a
different subparagraph, all of the following:
(A) The costs of renewable energy credits purchased under this
act.
(B) The costs of contracts described in former section 33(1).
(vi) Expenses incurred as a result of state or federal
governmental actions related to renewable energy systems or
advanced cleaner energy systems attributable to the renewable
energy standards, including changes in tax or other law.
(vii) Any additional electric provider costs determined by the
commission to be necessarily incurred to ensure the quality and
reliability of renewable energy or advanced cleaner energy used to
meet the renewable energy standards.
(b) Subtract from the sum of costs not already included in
electric rates determined under subdivision (a) the sum of the
following revenues:
(i) Revenue derived from the sale of environmental attributes
associated with the generation of renewable energy or advanced
cleaner energy systems attributable to the renewable energy
standards. Such revenue shall not be considered in determining
power supply cost recovery factors under section 6j of 1939 PA 3,
MCL 460.6j.
(ii) Interest on regulatory liabilities.
(iii) Tax credits specifically designed to promote renewable
energy or advanced cleaner energy.
(iv) Revenue derived from the provision of renewable energy or
advanced cleaner energy to retail electric customers subject to a
power supply cost recovery clause under section 6j of 1939 PA 3,
MCL 460.6j, of an electric provider whose rates are regulated by
the commission. After providing an opportunity for a contested case
hearing for an electric provider whose rates are regulated by the
commission, the commission shall annually establish a price per
megawatt hour. In addition, an electric provider whose rates are
regulated by the commission may at any time petition the commission
to revise the price. In setting the price per megawatt hour under
this subparagraph, the commission shall consider factors including,
but not limited to, projected capacity, energy, maintenance, and
operating costs; information filed under section 6j of 1939 PA 3,
MCL 460.6j; and information from wholesale markets, including, but
not limited to, locational marginal pricing. This price shall be
multiplied by the sum of the number of megawatt hours of renewable
energy and the number of megawatt hours of advanced cleaner energy
used to maintain compliance with the renewable energy standard. The
product shall be considered a booked cost of purchased and net
interchanged power transactions under section 6j of 1939 PA 3, MCL
460.6j. For energy purchased by such an electric provider under a
renewable energy contract or advanced cleaner energy contract, the
price shall be the lower of the amount established by the
commission or the actual price paid and shall be multiplied by the
number of megawatt hours of renewable energy or advanced cleaner
energy purchased. The resulting value shall be considered a booked
cost of purchased and net interchanged power under section 6j of
1939 PA 3, MCL 460.6j.
(v) Revenue from wholesale renewable energy sales and advanced
cleaner energy sales. Such revenue shall not be considered in
determining power supply cost recovery factors under section 6j of
1939 PA 3, MCL 460.6j.
(vi) Any additional electric provider revenue considered by
the commission to be attributable to the renewable energy
standards.
(vii) Any revenues recovered in rates for renewable energy
costs that are included under subdivision (a).
(3)
The commission shall authorize If,
before the effective
date of the 2015 amendatory act that amended this section, the
commission authorized an electric provider whose rates are
regulated by the commission to spend in any given month more to
comply with this act and implement an approved renewable energy
plan than the revenue actually generated by the former revenue
recovery
mechanism, . An electric provider whose rates are
regulated
by the commission the
provider shall recover its
commission approved pre-tax rate of return on regulatory assets
during the appropriate period. An electric provider whose rates are
regulated by the commission shall record interest on regulatory
liabilities at the average short-term borrowing rate available to
the electric provider during the appropriate period. Any regulatory
assets or liabilities resulting from the recovery costs of
renewable energy or advanced cleaner energy attributable to the
former renewable energy standards through the power supply cost
recovery clause under section 6j of 1939 PA 3, MCL 460.6j, shall
continue to be reconciled under that section.
(4)
If an electric provider's incremental costs of compliance
in
any given month during the 20-year period beginning when the
electric
provider's plan is approved by the commission are in
excess
of the revenue recovery mechanism as adjusted under section
49
and in excess of the balance of any accumulated reserve funds,
subject
to the minimum balance established under section 21, the
electric
provider shall immediately notify the commission. The
commission
shall promptly commence a contested case hearing
pursuant
to the administrative procedures act of 1969, 1969 PA 306,
MCL
24.201 to 24.328, and modify the revenue recovery mechanism so
that
the minimum balance is restored. However, if the commission
determines
that recovery of the incremental costs of compliance
would
otherwise exceed the maximum retail rate impacts specified
under
section 45, it shall set the revenue recovery mechanism for
that
electric provider to correspond to the maximum retail rate
impacts.
Excess costs shall be accrued and deferred for recovery.
Not
later than the expiration of the 20-year period beginning when
the
electric provider's plan is approved by the commission, for an
electric
provider whose rates are regulated by the commission, the
commission
shall determine the amount of deferred costs to be
recovered
under the revenue recovery mechanism and the recovery
period,
which shall not extend more than 5 years beyond the
expiration
of the 20-year period beginning when the electric
provider's
plan is approved by the commission. The recovery of
excess
costs shall be proportional to the retail rate impact limits
in
section 45 for each customer class. The recovery of excess costs
alone,
or, if begun before the expiration of the 20-year period, in
combination
with the recovery of incremental costs of compliance
under
the revenue recovery mechanism, shall not exceed the retail
rate
impact limits of section 45 for each customer class.
(4) (5)
If, at the expiration of the
20-year period beginning
when the electric provider's plan is approved by the commission, an
electric provider whose rates are regulated by the commission has a
regulatory liability, the refund to customer classes shall be
proportional to the amounts paid by those customer classes under
the former revenue recovery mechanism.
(5) (6)
After achieving compliance with the
renewable energy
standard for 2015, the actual costs reasonably and prudently
incurred to continue to comply with this subpart both during and
after the conclusion of the 20-year period beginning when the
electric
provider's plan is was approved by the commission shall be
considered costs of service. The commission shall determine a
mechanism for an electric provider whose rates are regulated by the
commission
to recover these costs in its retail electric rates. ,
subject
to the retail rate impact limits in section 45. Remaining
and future regulatory assets shall be recovered consistent with
subsections
(2) and (3). and section 49.
SUBPART B. CUSTOMER-REQUESTED RENEWABLE ENERGY
Sec. 61. An electric provider shall offer to its customers the
opportunity to participate in a voluntary green pricing program
under which the customer may specify, from the options made
available by the electric provider, the percentage of electricity
provided to the customer that will be renewable energy. The
program, including the rates paid for renewable energy, must be
approved by the commission. The customer is responsible for any
additional costs incurred and accrues any additional savings
realized by the electric provider as a result of providing the
customer with a higher percentage of renewable energy than is
provided to customers that do not participate in the program. If an
electric provider has not yet fully recovered the incremental costs
of compliance, both of the following apply:
(a) A customer that receives at least 50% of the customer's
average monthly electricity consumption through the program is
exempt from paying charges for incremental costs of compliance.
(b) Before entering an agreement with a customer to
participate in a commission-approved voluntary green pricing
program with a customer that will not receive at least 50% of the
customer's average monthly electricity consumption through the
program, the electric provider shall notify the customer that the
customer will be responsible for the full applicable charges under
the revenue recovery mechanism and under the voluntary renewable
energy program as provided under this section.
SUBPART B. C. ENERGY OPTIMIZATION WASTE REDUCTION
Sec. 71. (1) A provider shall file a proposed energy
optimization plan with the commission within the following time
period:
(a) For a provider whose rates are regulated by the
commission,
90 days after the commission enters a temporary order
under
section 171.by March 3, 2009.
(b) For a cooperative electric utility that has elected to
become member-regulated under the electric cooperative member
regulation act, 2008 PA 167, MCL 460.31 to 460.39, or a
municipally-owned
electric utility, 120 days after the commission
enters
a temporary order under section 171.by April 2, 2009.
(2) Energy optimization plans filed under subsection (1)
remain in effect, subject to any amendments, as energy waste
reduction plans.
(3) (2)
The overall goal of an energy optimization
waste
reduction plan shall be to reduce the future costs of provider
service
to customers. In particular, an EO energy waste reduction
plan shall be designed to delay the need for constructing new
electric generating facilities and thereby protect consumers from
incurring
the costs of such construction. The proposed energy
optimization
plan shall be subject to approval in the same manner
as
an electric provider's renewable energy plan under subpart A. A
provider
may combine its energy optimization plan with its
renewable
energy plan.
(4) (3)
An energy optimization waste reduction plan shall do
all of the following:
(a)
Propose a set of energy optimization waste reduction
programs that include offerings for each customer class, including
low
income low-income residential. The commission shall allow
providers
a provider flexibility to tailor the relative amount of
effort devoted to each customer class based on the specific
characteristics
of their the provider's service territory.
(b) Specify necessary funding levels.
(c)
Describe how energy optimization waste reduction program
costs will be recovered as provided in section 89(2).
(d) Ensure, to the extent feasible, that charges collected
from a particular customer rate class are spent on energy
optimization
waste reduction programs for that rate class.
(e) Demonstrate that the proposed energy optimization programs
and funding are sufficient to ensure the achievement of applicable
energy
optimization waste
reduction standards.
(f) Specify whether the number of megawatt hours of
electricity or decatherms or MCFs of natural gas used in the
calculation of incremental energy savings under section 77 will be
weather-normalized or based on the average number of megawatt hours
of electricity or decatherms or MCFs of natural gas sold by the
provider annually during the previous 3 years to retail customers
in this state. Once the plan is approved by the commission, this
option shall not be changed.
(g)
Demonstrate that the provider's energy optimization waste
reduction
programs, excluding program offerings
to low income low-
income residential customers, will collectively be cost-effective.
(h) Provide for the practical and effective administration of
the
proposed energy optimization waste
reduction programs. The
commission shall allow providers flexibility in designing their
energy
optimization waste
reduction programs and administrative
approach.
A provider's energy optimization waste reduction programs
or any part thereof, may be administered, at the provider's option,
by the provider, alone or jointly with other providers, by a state
agency, or by an appropriate experienced nonprofit organization
selected after a competitive bid process.
(i) Include a process for obtaining an independent expert
evaluation
of the actual energy optimization waste reduction
programs to verify the incremental energy savings from each energy
optimization
waste reduction program for purposes of section 77.
All such evaluations shall be subject to public review and
commission oversight.
(5) (4)
Subject to subsection (5), (6), an
energy optimization
waste reduction plan may do 1 or more of the following:
(a) Utilize educational programs designed to alter consumer
behavior or any other measures that can reasonably be used to meet
the
goals set forth in subsection (2).(3).
(b) Propose to the commission measures that are designed to
meet
the goals set forth in subsection (1) (3) and that provide
additional customer benefits.
(6) (5)
Expenditures under subsection (4)
(5) shall not exceed
3%
of the costs of implementing the energy optimization waste
reduction plan.
(7) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(8) This section is repealed effective January 1, 2019.
Sec. 72. (1) A natural gas provider was required to file a
proposed energy optimization plan with the commission by March 3,
2009. Those plans remain in effect, subject to any amendments, as
energy waste reduction plans.
(2) The overall goal of an energy waste reduction plan shall
be to reduce the future costs of natural gas provider service to
customers.
(3) An energy waste reduction plan shall do all of the
following:
(a) Propose a set of energy waste reduction programs that
include offerings for each customer class, including low-income
residential. The commission shall allow a provider flexibility to
tailor the relative amount of effort devoted to each customer class
based on the specific characteristics of the provider's service
territory.
(b) Specify necessary funding levels.
(c) Describe how energy waste reduction program costs will be
recovered as provided in section 89a(2), including specifying
whether the charges to recover costs under section 89a(2) will be
volumetric or fixed per-meter charges.
(d) Ensure, to the extent feasible, that charges collected
from a particular customer rate class are spent on energy waste
reduction programs for that rate class.
(e) Demonstrate that the proposed energy waste reduction
programs and funding are sufficient to ensure the achievement of
applicable energy waste reduction standards.
(f) Specify whether the number of decatherms or MCFs of
natural gas used in the calculation of incremental energy savings
under section 77a will be weather-normalized or based on the
average number of decatherms or MCFs of natural gas sold by the
provider annually during the previous 3 years to retail customers
in this state. Once the plan is approved by the commission, this
option shall not be changed.
(g) Demonstrate that the provider's energy waste reduction
programs, excluding program offerings to low-income residential
customers, will collectively be cost-effective.
(h) Provide for the practical and effective administration of
the proposed energy waste reduction programs. The commission shall
allow natural gas providers flexibility in designing their energy
waste reduction programs and administrative approach, including the
flexibility to determine the relative amount of effort to be
devoted to each customer class based on the specific
characteristics of the natural gas provider's service territory. A
natural gas provider's energy waste reduction programs or any part
thereof may be administered, at the natural gas provider's option,
by the provider, alone or jointly with other natural gas providers,
by a state agency, or by an appropriate experienced nonprofit
organization selected after a competitive bid process.
(i) Include a process for obtaining an independent expert
evaluation of the actual energy waste reduction programs to verify
the incremental energy savings from each energy waste reduction
program for purposes of section 77a. All such evaluations shall be
subject to public review and commission oversight.
(4) Subject to subsection (5), an energy waste reduction plan
may do 1 or more of the following:
(a) Utilize educational programs designed to alter consumer
behavior or any other measures that can reasonably be used to meet
the goal set forth in subsection (2).
(b) Propose to the commission measures that are designed to
meet the goal set forth in subsection (2) and that provide
additional customer benefits.
(5) Expenditures under subsection (4) shall not exceed 3% of
the costs of implementing the energy waste reduction plan.
(6) This section takes effect January 1, 2019.
Sec.
73. (1) A natural gas provider's energy optimization
waste
reduction plan shall be filed , with and reviewed,
and
approved
or rejected, and enforced by the commission. and enforced
subject
to the same procedures that apply to a renewable energy
plan.
(2) The commission shall not approve a proposed energy
optimization
waste reduction plan unless the commission determines
that the EO plan meets the utility system resource cost test and is
reasonable
and prudent. In determining whether the EO energy waste
reduction plan is reasonable and prudent, the commission shall
review each element and consider whether it would reduce the future
cost of service for the natural gas provider's customers. In
addition, the commission shall consider at least all of the
following:
(a) The specific changes in customers' consumption patterns
that
the proposed EO energy
waste reduction plan is attempting to
influence.
(b) The cost and benefit analysis and other justification for
specific
programs and measures included in a proposed EO energy
waste reduction plan.
(c)
Whether the proposed EO energy
waste reduction plan is
consistent with any long-range resource plan filed by the provider
with the commission.
(d)
Whether the proposed EO energy
waste reduction plan will
result in any unreasonable prejudice or disadvantage to any class
of customers.
(e)
The extent to which the EO energy
waste reduction plan
provides programs that are available, affordable, and useful to all
customers.
(3) Every 2 years after initial approval of an energy waste
reduction plan under subsection (2), the commission shall review
the plan. The commission shall conduct a contested case hearing on
the plan pursuant to the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328. After the hearing, the
commission shall approve, with any changes consented to by the
natural gas provider, or reject the plan and any proposed
amendments to the plan.
(4) If a natural gas provider proposes to amend its plan at a
time other than during the biennial review process under subsection
(3), the provider shall file the proposed amendment with the
commission. After the hearing and within 90 days after the
amendment is filed, the commission shall approve, with any changes
consented to by the provider, or reject the plan and the proposed
amendment or amendments to the plan.
(5) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
(6) This section, as amended by the 2015 amendatory act that
added this subsection, takes effect January 1, 2019.
Sec. 74. (1) A provider's energy waste reduction plan shall be
filed with and reviewed, approved or rejected, and enforced by the
commission.
(2) The commission shall not approve a proposed energy waste
reduction plan unless the commission determines that the energy
waste reduction plan meets the utility system resource cost test
and is reasonable and prudent. In determining whether the energy
waste reduction plan is reasonable and prudent, the commission
shall review each element and consider whether it would reduce the
future cost of service for the provider's customers. In addition,
the commission shall consider at least all of the following:
(a) The specific changes in customers' consumption patterns
that the proposed energy waste reduction plan is attempting to
influence.
(b) The cost and benefit analysis and other justification for
specific programs and measures included in a proposed energy waste
reduction plan.
(c) Whether the proposed energy waste reduction plan is
consistent with any long-range resource plan filed by the provider
with the commission.
(d) Whether the proposed energy waste reduction plan will
result in any unreasonable prejudice or disadvantage to any class
of customers.
(e) The extent to which the energy waste reduction plan
provides programs that are available, affordable, and useful to all
customers.
(3) Every 2 years after initial approval of an energy waste
reduction plan under subsection (2), the commission shall review
the plan. The commission shall conduct a contested case hearing on
the plan pursuant to the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328. After the hearing, the
commission shall approve, with any changes consented to by the
provider, or reject the plan and any proposed amendments to the
plan.
(4) If a provider proposes to amend its plan at a time other
than during the biennial review process under subsection (3), the
provider shall file the proposed amendment with the commission.
After the hearing and within 90 days after the amendment is filed,
the commission shall approve, with any changes consented to by the
provider, or reject the plan and the proposed amendment or
amendments to the plan.
(5) By 270 days after the effective date of the 2015
amendatory act that added this section, an electric provider shall
file with the commission a proposed plan amendment under subsection
(3) or (4) to reflect the phaseout of the energy waste reduction
standard under section 77.
(6) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
(7) This section takes effect 90 days after the effective date
of the 2015 amendatory act that added this section.
(8) This section is repealed effective January 1, 2019.
Sec.
75. (1) An energy optimization waste reduction plan of a
provider whose rates are regulated by the commission may authorize
a commensurate financial incentive for the provider for exceeding
the
energy optimization waste
reduction performance standard.
Payment
of any financial incentive authorized in the EO energy
waste reduction plan is subject to the approval of the commission.
The
total amount of a financial incentive shall not exceed the
lesser
of the following amounts:
(a)
25% of the net cost reductions experienced by the
provider's
customers as a result of implementation of the energy
optimization
plan.
(b)
15% percent 20% of the provider's actual energy efficiency
waste reduction program expenditures for the year.
(2) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
Sec. 77. (1) Except as provided in section 81 and subject to
the sales revenue expenditure limits in section 89, an electric
provider's
energy optimization waste
reduction programs under this
subpart
shall collectively achieve the following minimum energy
savings:
(a)
Biennial incremental energy savings in 2008-2009
equivalent
to 0.3% of total annual retail electricity sales in
megawatt
hours in 2007.
(b)
Annual incremental energy savings in 2010 equivalent to
0.5%
of total annual retail electricity sales in megawatt hours in
2009.
(c)
Annual incremental energy savings in 2011 equivalent to
0.75%
of total annual retail electricity sales in megawatt hours in
2010.
(d)
Annual annual incremental energy savings in 2012, 2013,
2014,
and 2015 and, subject to section
97, each year thereafter
2016, 2017, and 2018 equivalent to 1.0% of total annual retail
electricity sales in megawatt hours in the preceding year.
(2) If an electric provider uses load management to achieve
energy
savings under its energy optimization waste reduction plan,
the minimum energy savings required under subsection (1) shall be
adjusted by an amount such that the ratio of the minimum energy
savings to the sum of maximum expenditures under section 89 and the
load management expenditures remains constant.
(3)
A natural gas provider shall meet the following minimum
energy
optimization standards using energy efficiency programs
under
this subpart:
(a)
Biennial incremental energy savings in 2008-2009
equivalent
to 0.1% of total annual retail natural gas sales in
decatherms
or equivalent MCFs in 2007.
(b)
Annual incremental energy savings in 2010 equivalent to
0.25%
of total annual retail natural gas sales in decatherms or
equivalent
MCFs in 2009.
(c)
Annual incremental energy savings in 2011 equivalent to
0.5%
of total annual retail natural gas sales in decatherms or
equivalent
MCFs in 2010.
(3) (d)
Annual Subject to the sales
revenue expenditure limits
in section 89, a natural gas provider's energy waste reduction
program under this subpart shall achieve annual incremental energy
savings
in 2012, 2013, 2014, and 2015 and, subject to section 97,
each year thereafter equivalent to 0.75% of total annual retail
natural gas sales in decatherms or equivalent MCFs in the preceding
year.
(4) Incremental energy savings under subsection (1) or (3) for
the
2008-2009 biennium or any year thereafter a year shall be
determined for a provider by adding the energy savings expected to
be
achieved during a 1-year period by energy optimization waste
reduction
measures implemented during the
2008-2009 biennium or any
year
thereafter that year under any energy efficiency programs
consistent
with the provider's energy efficiency waste reduction
plan. The energy savings expected to be achieved shall be
determined using the 2015 "Michigan Energy Measures Database"
supplied by Morgan Marketing Partners, subject to any updates that
the commission approves as being reasonable and consistent with the
purposes of this subpart.
(5) For purposes of calculations under subsection (1) or (3),
total annual retail electricity or natural gas sales in a year
shall be based on 1 of the following at the option of the provider
as
specified in its energy optimization waste reduction plan:
(a) The number of weather-normalized megawatt hours or
decatherms or equivalent MCFs sold by the provider to retail
customers
in this state during the year preceding the biennium or
year for which incremental energy savings are being calculated.
(b) The average number of megawatt hours or decatherms or
equivalent MCFs sold by the provider during the 3 years preceding
the
biennium or year for which incremental energy savings are being
calculated.
(6)
For any year after 2012, an electric provider may
substitute
renewable energy credits associated with renewable
energy
generated that year from a renewable energy system
constructed
after the effective date of this act, advanced cleaner
energy
credits other than credits from industrial cogeneration
using
industrial waste energy, load management that reduces overall
energy
usage, or a combination thereof for energy optimization
credits
otherwise required to meet the energy optimization
performance
standard, if the substitution is approved by the
commission.
The commission shall not approve a substitution unless
the
commission determines that the substitution is cost-effective
and,
if the substitution involves advanced cleaner energy credits,
that
the advanced cleaner energy system provides carbon dioxide
emissions
benefits. In determining whether the substitution of
advanced
cleaner energy credits is cost-effective compared to other
available
energy optimization measures, the commission shall
consider
the environmental costs related to the advanced cleaner
energy
system, including the costs of environmental control
equipment
or greenhouse gas constraints or taxes. The commission's
determinations
shall be made after a contested case hearing that
includes
consultation with the department of environmental quality
on
the issue of carbon dioxide emissions benefits, if relevant, and
environmental
costs.
(7)
Renewable energy credits, advanced cleaner energy credits,
load
management that reduces overall energy usage, or a combination
thereof
shall not be used by a provider to meet more than 10% of
the
energy optimization standard. Substitutions for energy
optimization
credits shall be made at the following rates per
energy
optimization credit:
(a)
1 renewable energy credit.
(b)
1 advanced cleaner energy credit from plasma arc
gasification.
(c)
4 advanced cleaner energy credits other than from plasma
arc
gasification.
(6) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(7) This section is repealed effective January 1, 2019.
Sec. 77a. (1) Subject to the sales revenue expenditure limits
in section 89, a natural gas provider's energy waste reduction
program under this subpart shall achieve annual incremental energy
savings in 2019 and, subject to section 97, each year thereafter
equivalent to 0.75% of total annual retail natural gas sales in
decatherms or equivalent MCFs in the preceding year.
(2) Incremental energy savings under subsection (1) for a year
shall be determined for a natural gas provider by adding the energy
savings expected to be achieved by energy waste reduction measures
implemented during that year under any energy efficiency programs
consistent with the provider's energy waste reduction plan. The
energy savings expected to be achieved shall be determined using
the 2015 "Michigan Energy Measures Database" supplied by Morgan
Marketing Partners, subject to any updates that the commission
approves as being reasonable and consistent with the purposes of
this subpart.
(3) For purposes of calculations under subsection (1), total
annual retail natural gas sales in a year shall be based on 1 of
the following at the option of the natural gas provider as
specified in its energy waste reduction plan:
(a) The number of weather-normalized decatherms or equivalent
MCFs sold by the provider to retail customers in this state during
the year preceding the year for which incremental energy savings
are being calculated.
(b) The average number of decatherms or equivalent MCFs sold
by the provider during the 3 years preceding the year for which
incremental energy savings are being calculated.
(4) This section takes effect January 1, 2019.
Sec. 78. (1) If over a 2-year period a natural gas provider
cannot achieve the energy waste reduction standard in a cost-
effective manner, the natural gas provider may petition the
commission to establish alternative energy waste reduction
standards.
(2) A petition filed pursuant to this section shall:
(a) Identify the efforts taken by the natural gas provider to
meet the energy waste reduction standard.
(b) Explain why the energy waste reduction standard cannot
reasonably and cost-effectively be achieved.
(c) Propose a revised energy waste reduction to be achieved by
the natural gas provider.
(3) If, based on a review of the petition filed under this
section, the commission determines that the natural gas provider
has been unable to reasonably and cost-effectively achieve the
energy waste reduction standard, the commission shall revise the
energy waste reduction standard as applied to the natural gas
provider to a level that can reasonably and cost-effectively be
achieved.
(4) This section takes effect 90 days after the date the 2015
amendatory act that added this section is enacted into law.
Sec. 81. (1) This section applies to electric providers that
meet both of the following requirements:
(a) Serve not more than 200,000 customers in this state.
(b) Had average electric rates for residential customers using
1,000
kilowatt hours per month that are were less than 75% of the
average electric rates for residential customers using 1,000
kilowatt hours per month for all electric utilities in this state,
according to the January 1, 2007, "comparison of average rates for
MPSC-regulated electric utilities in Michigan" compiled by the
commission.
(2) Beginning 2 years after a provider described in subsection
(1)
begins implementation of its energy optimization waste
reduction plan, the provider may petition the commission to
establish
alternative energy optimization waste
reduction
standards. The petition shall identify the efforts taken by the
provider
to meet the electric provider energy optimization waste
reduction
standards and demonstrate why the
energy optimization
waste reduction standards cannot reasonably be met with energy
optimization
waste reduction programs that are collectively cost-
effective. If the commission finds that the petition meets the
requirements of this subsection, the commission shall revise the
energy
optimization waste
reduction standards as applied to that
electric provider to a level that can reasonably be met with energy
optimization
waste reduction programs that are collectively cost-
effective.
(3) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(4) This section is repealed effective January 1, 2019.
Sec.
83. (1) One energy optimization waste
reduction credit
shall
be granted to a an
electric provider for each megawatt
hour
of annual incremental energy savings achieved through energy
optimization.waste reduction.
(2)
An energy optimization waste
reduction credit expires as
follows:
(a) When used by a provider to comply with its energy
optimization
waste reduction performance standard.
(b)
When substituted for a renewable energy credit under
section
27.
(b) (c)
As provided in subsection (3).
(3) If a provider's incremental energy savings in the 2008-
2009 biennium or any year thereafter exceed the applicable energy
optimization
waste reduction standard, the associated energy
optimization
waste reduction credits may be carried forward and
applied
to the next year's energy optimization waste reduction
standard. However, all of the following apply:
(a)
The number of energy optimization waste reduction credits
carried forward shall not exceed 1/3 of the next year's standard.
Any
energy optimization waste
reduction credits carried forward to
the
next year shall expire that year. Any remaining energy
optimization
credits shall expire at the end of the year in which
the
incremental energy savings were achieved, unless substituted,
by
an electric provider, for renewable energy credits under section
27.
(b)
Energy optimization waste
reduction credits shall not be
carried forward if, for its performance during the same biennium or
year, the provider accepts a financial incentive under section 75.
The
excess energy optimization waste
reduction credits shall expire
at the end of the year in which the incremental energy savings were
achieved. ,
unless substituted, by an electric provider, for
renewable
energy credits under section 27.
(4) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(5) This section is repealed effective January 1, 2019.
Sec.
85. (1) An energy optimization waste
reduction credit is
not transferable to another entity.
(2)
The commission, in the 2011 report under section 97, shall
make
recommendations concerning a program for transferability of
energy
optimization credits.
(2) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(3) This section is repealed effective January 1, 2019.
Sec. 87. (1) The commission shall establish an energy
optimization
waste reduction credit certification and tracking
program. The certification and tracking program may be contracted
to and performed by a third party through a system of competitive
bidding. The program shall include all of the following:
(a) A determination of the date after which energy
optimization
waste reduction must be achieved to be eligible for an
energy
optimization waste
reduction credit.
(b)
A method for ensuring that each energy optimization credit
substituted
for a renewable energy credit under section 27 or
carried
forward under section 83 is properly accounted for.
(b) (c)
If the system is established by the
commission,
allowance
for issuance and use of energy optimization waste
reduction credits in electronic form.
(2) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(3) This section is repealed effective January 1, 2019.
Sec. 89. (1) The commission shall allow a provider whose rates
are regulated by the commission to recover the actual costs of
implementing
its approved energy optimization waste reduction plan.
However, costs exceeding the overall funding levels specified in
the
energy optimization waste
reduction plan are not recoverable
unless those costs are reasonable and prudent and meet the utility
system resource cost test. Furthermore, costs for load management
undertaken
pursuant to an energy optimization waste reduction plan
are
not recoverable as energy optimization waste reduction program
costs under this section, but may be recovered as described in
section 95.
(2) Under subsection (1), costs shall be recovered from all
natural
gas customers and from residential electric customers by
volumetric
charges , from all other metered electric customers by
per-meter
charges, and from unmetered electric customers by an
appropriate
charge, applied to utility bills as an itemized
charge.or fixed, per-meter charges. Fixed, per-meter
charges under
this subsection may vary by rate class. Charges under this
subsection shall not be itemized on utility bills.
(3) For the electric primary customer rate class customers of
electric providers and customers of natural gas providers with an
aggregate annual natural gas billing demand of more than 100,000
decatherms or equivalent MCFs for all sites in the natural gas
utility's service territory, the cost recovery under subsection (1)
shall not exceed 1.7% of total retail sales revenue for that
customer class. For electric secondary customers and for
residential customers, the cost recovery shall not exceed 2.2% of
total retail sales revenue for those customer classes.
(4) Upon petition by a provider whose rates are regulated by
the commission, the commission shall authorize the provider to
capitalize all energy efficiency and energy conservation equipment,
materials, and installation costs with an expected economic life
greater than 1 year incurred in implementing its energy
optimization
waste reduction plan, including such costs paid to
third parties, such as customer rebates and customer incentives.
The provider shall also propose depreciation treatment with respect
to
its capitalized costs in its energy optimization waste reduction
plan, and the commission shall order reasonable depreciation
treatment related to these capitalized costs. A provider shall not
capitalize
payments made to an independent energy optimization
waste reduction program administrator under section 91.
(5) The established funding level for low income residential
programs shall be provided from each customer rate class in
proportion to that customer rate class's funding of the provider's
total
energy optimization waste
reduction programs. Charges shall
be applied to distribution customers regardless of the source of
their electricity or natural gas supply.
(6) The commission shall authorize a natural gas provider that
spends a minimum of 0.5% of total natural gas retail sales
revenues, including natural gas commodity costs, in a year on
commission-approved
energy optimization waste
reduction programs to
implement a symmetrical revenue decoupling true-up mechanism that
adjusts for sales volumes that are above or below the projected
levels that were used to determine the revenue requirement
authorized in the natural gas provider's most recent rate case. In
determining the symmetrical revenue decoupling true-up mechanism
utilized for each provider, the commission shall give deference to
the proposed mechanism submitted by the provider. The commission
may approve an alternative mechanism if the commission determines
that the alternative mechanism is reasonable and prudent. The
commission shall authorize the natural gas provider to decouple
rates regardless of whether the natural gas provider's energy
optimization
waste reduction programs are administered by the
provider
or an independent energy optimization waste reduction
program administrator under section 91.
(7)
A To comply with the
energy waste reduction standard in
any year, a natural gas provider or an electric provider shall not
spend
more than the following percentage 2.0% of total utility
retail sales revenues, including electricity or natural gas
commodity
costs, in any year to comply with the energy optimization
performance
standard without specific approval from the
commission:for the second year preceding.
(a)
In 2009, 0.75% of total retail sales revenues for 2007.
(b)
In 2010, 1.0% of total retail sales revenues for 2008.
(c)
In 2011, 1.5% of total retail sales revenues for 2009.
(d)
In 2012 and each year thereafter, 2.0% of total retail
sales
revenues for the 2 years preceding.
(8) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(9) This section is repealed effective January 1, 2019.
Sec. 89a. (1) The commission shall allow a natural gas
provider whose rates are regulated by the commission to recover the
actual costs of implementing its approved energy waste reduction
plan. However, costs exceeding the overall funding levels specified
in the energy waste reduction plan are not recoverable unless those
costs are reasonable and prudent and meet the utility system
resource cost test.
(2) Under subsection (1), costs shall be recovered from all
natural gas customers by volumetric charges or fixed, per-meter
charges as specified in the energy waste reduction plan. Fixed,
per-meter charges under this subsection may vary by rate class.
Charges under this subsection shall not be itemized on utility
bills.
(3) For customers of natural gas providers with an aggregate
annual natural gas billing demand of more than 100,000 decatherms
or equivalent MCFs for all sites in the natural gas utility's
service territory, the cost recovery under subsection (1) shall not
exceed 1.7% of total retail sales revenue for that customer class.
For residential customers, the cost recovery shall not exceed 2.2%
of total retail sales revenue for that customer class.
(4) Upon petition by a natural gas provider whose rates are
regulated by the commission, the commission shall authorize the
provider to capitalize all energy efficiency and energy
conservation equipment, materials, and installation costs with an
expected economic life greater than 1 year incurred in implementing
its energy waste reduction plan, including such costs paid to third
parties, such as customer rebates and customer incentives. The
provider shall also propose depreciation treatment with respect to
its capitalized costs in its energy waste reduction plan, and the
commission shall order reasonable depreciation treatment related to
these capitalized costs. A natural gas provider shall not
capitalize payments made to an independent energy waste reduction
program administrator under section 91a.
(5) The established funding level for low-income residential
programs shall be provided from each customer rate class in
proportion to that customer rate class's funding of the natural gas
provider's total energy waste reduction programs. Charges shall be
applied to distribution customers regardless of the source of their
natural gas supply.
(6) The commission shall authorize a natural gas provider that
spends a minimum of 0.5% of total natural gas retail sales
revenues, including natural gas commodity costs, in a year on
commission-approved energy waste reduction programs to implement a
symmetrical revenue decoupling true-up mechanism that adjusts for
sales volumes that are above or below the projected levels that
were used to determine the revenue requirement authorized in the
natural gas provider's most recent rate case. In determining the
symmetrical revenue decoupling true-up mechanism utilized for each
natural gas provider, the commission shall give deference to the
proposed mechanism submitted by the natural gas provider. The
commission may approve an alternative mechanism if the commission
determines that the alternative mechanism is reasonable and
prudent. The commission shall authorize the natural gas provider to
decouple rates regardless of whether the natural gas provider's
energy waste reduction programs are administered by the provider or
an independent energy waste reduction program administrator under
section 91a.
(7) A natural gas provider shall not spend in any year more
than 2.0% of total utility retail sales revenues, including natural
gas commodity costs, for the second year preceding to comply with
the energy waste reduction performance standard without specific
approval from the commission.
(8) This section takes effect January 1, 2019.
Sec. 91. (1) Except for section 89(6), sections 71 to 89 do
not apply to a provider that pays the following percentage of total
utility sales revenues, including electricity or natural gas
commodity
costs, each year to an independent energy optimization
waste reduction program administrator selected by the commission:
(a)
In 2009, 0.75% of total retail sales revenues for 2007.
(b)
In 2010, 1.0% of total retail sales revenues for 2008.
(c)
In 2011, 1.5% of total retail sales revenues for 2009.
(d)
In 2012 and each year thereafter, 2.0% of total retail
sales
revenues for the 2 years preceding.
(a) For a natural gas provider, 2.0% of total retail sales
revenues for the second year preceding.
(b) For an electric provider, as follows:
(i) For each year through 2016, 2.0% of total retail sales
revenues for 2014.
(ii) For 2017, 1.0% of total retail sales revenues for 2015.
(iii) For 2018, 1.0% of total retail sales revenues for 2016.
(2) An alternative compliance payment received from a provider
by
the energy optimization waste
reduction program administrator
under subsection (1) shall be used to administer energy efficiency
programs for the provider. Money unspent in a year shall be carried
forward to be spent in the subsequent year.
(3) The commission shall allow a provider to recover an
alternative compliance payment under subsection (1). This cost
shall
be recovered from residential customers by volumetric charges
,
from all other metered customers by per-meter charges, and from
unmetered
customers by an appropriate charge, applied to or fixed,
per-meter charges. Fixed, per-meter charges under this subsection
may vary by rate class. Charges under this subsection shall not be
itemized on utility bills.
(4) An alternative compliance payment under subsection (1)
shall
only be used to fund energy optimization waste reduction
programs for that provider's customers. To the extent feasible,
charges collected from a particular customer rate class and paid to
the
energy optimization waste
reduction program administrator under
subsection
(1) shall be devoted to energy optimization waste
reduction programs and services for that rate class.
(5)
Money paid to the energy optimization waste reduction
program administrator under subsection (1) and not spent by the
administrator that year shall remain available for expenditure the
following year, subject to the requirements of subsection (4).
(6) The commission shall select a qualified nonprofit
organization
to serve as an energy optimization waste reduction
program administrator under this section, through a competitive bid
process.
(7) The commission shall arrange for a biennial independent
audit
of the energy optimization waste
reduction program
administrator.
(8) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(9) This section is repealed effective January 1, 2019.
Sec. 91a. (1) Except for section 89a(6), sections 71 to 89a do
not apply to a natural gas provider that each year pays 2.0% of
total utility sales revenues, including electricity or natural gas
commodity costs, for the second year preceding to an independent
energy waste reduction program administrator selected by the
commission.
(2) An alternative compliance payment received from a natural
gas provider by the energy waste reduction program administrator
under subsection (1) shall be used to administer energy waste
reduction programs for the provider. Money unspent in a year shall
be carried forward to be spent in the subsequent year.
(3) The commission shall allow a natural gas provider to
recover an alternative compliance payment under subsection (1).
This cost shall be recovered from customers by volumetric charges
or fixed, per-meter charges. Fixed, per-meter charges under this
subsection may vary by rate class. Charges under this subsection
shall not be itemized on utility bills.
(4) An alternative compliance payment under subsection (1)
shall only be used to fund energy waste reduction programs for that
provider's customers. To the extent feasible, charges collected
from a particular customer rate class and paid to the energy waste
reduction program administrator under subsection (1) shall be
devoted to energy waste reduction programs and services for that
rate class.
(5) Money paid to the energy waste reduction program
administrator under subsection (1) and not spent by the
administrator that year shall remain available for expenditure the
following year, subject to subsection (4).
(6) The commission shall select a qualified nonprofit
organization to serve as an energy waste reduction program
administrator under this section through a competitive bid process.
(7) The commission shall arrange for a biennial independent
audit of the energy waste reduction program administrator.
(8) This section takes effect January 1, 2019.
Sec. 93. (1) An eligible electric customer is exempt from
charges the customer would otherwise incur as an electric customer
under section 89 or 91 if the customer files with its electric
provider
and implements a self-directed energy optimization waste
reduction plan as provided in this section.
(2) Subject to subsection (3), an electric customer is not
eligible under subsection (1) unless it is a commercial or
industrial
electric customer and meets all of the following
requirements:
(a)
In 2009 or 2010, the customer must have had an annual peak
demand
in the preceding year of at least 2 megawatts at each site
to
be covered by the self-directed plan or 10 megawatts in the
aggregate
at all sites to be covered by the plan.
(b)
In 2011, 2012, or 2013, the customer or customers must
have
had an annual peak demand in the preceding year of at least 1
megawatt
at each site to be covered by the self-directed plan or 5
megawatts
in the aggregate at all sites to be covered by the plan.
(c)
In 2014 or any year thereafter, the customer or customers
must
have had an annual peak demand in
the preceding year of at
least 1 megawatt in the aggregate at all sites to be covered by the
self-directed plan.
(3) The eligibility requirements of subsection (2) do not
apply to a commercial or industrial customer that installs or
modifies an electric energy efficiency improvement under a property
assessed clean energy program pursuant to the property assessed
clean energy act, 2010 PA 270, MCL 460.931 to 460.949.
(4) The commission shall by order establish the rates, terms,
and conditions of service for customers related to this subpart.
(5) The commission shall by order do all of the following:
(a) Require a customer to utilize the services of an energy
optimization
waste reduction service company to develop and
implement a self-directed plan. This subdivision does not apply to
a customer that had an annual peak demand in the preceding year of
at least 2 megawatts at each site to be covered by the self-
directed plan or 10 megawatts in the aggregate at all sites to be
covered by the self-directed plan.
(b) Provide a mechanism to recover from customers under
subdivision (a) the costs for provider level review and evaluation.
(c)
Provide a mechanism to cover the costs of the low income
low-income
energy optimization waste reduction program under
section 89.
(6) All of the following apply to a self-directed energy
optimization
waste reduction plan under subsection (1):
(a) The self-directed plan shall be a multiyear plan for an
ongoing
energy optimization waste
reduction program.
(b) The self-directed plan shall provide for aggregate energy
savings
that each year meet or exceed the energy optimization waste
reduction standards based on the electricity purchases in the
previous year for the site or sites covered by the self-directed
plan.
(c)
Under the self-directed plan, energy optimization waste
reduction shall be calculated based on annual electricity usage.
Annual electricity usage shall be normalized so that none of the
following are included in the calculation of the percentage of
incremental energy savings:
(i) Changes in electricity usage because of changes in
business activity levels not attributable to energy
optimization.waste reduction.
(ii) Changes in electricity usage because of the installation,
operation, or testing of pollution control equipment.
(d) The self-directed plan shall specify whether electricity
usage will be weather-normalized or based on the average number of
megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the self-directed plan is submitted to the provider,
this option shall not be changed.
(e) The self-directed plan shall outline how the customer
intends to achieve the incremental energy savings specified in the
self-directed plan.
(7)
A self-directed energy optimization waste reduction plan
shall be incorporated into the relevant electric provider's energy
optimization
waste reduction plan. The self-directed plan and
information submitted by the customer under subsection (10) are
confidential and exempt from disclosure under the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246. Projected
energy savings from measures implemented under a self-directed plan
shall
be attributed to the relevant provider's energy optimization
waste reduction programs for the purposes of determining annual
incremental energy savings achieved by the provider under section
77 or 81, as applicable.
(8) Once a customer begins to implement a self-directed plan
at a site covered by the self-directed plan, that site is exempt
from
energy optimization waste
reduction program charges under
section 89 or 91 and is not eligible to participate in the relevant
electric
provider's energy optimization waste
reduction programs.
(9) A customer implementing a self-directed energy
optimization
waste reduction plan under this section shall annually
submit to the customer's electric provider a brief report
documenting the energy efficiency measures taken under the self-
directed plan during the previous year, and the corresponding
energy savings that will result. The report shall provide
sufficient information for the provider and the commission to
monitor progress toward the goals in the self-directed plan and to
develop reliable estimates of the energy savings that are being
achieved from self-directed plans. The customer report shall
indicate the level of incremental energy savings achieved for the
year covered by the report and whether that level of incremental
energy savings meets the goal set forth in the customer's self-
directed plan. If a customer submitting a report under this
subsection wishes to amend its self-directed plan, the customer
shall submit with the report an amended self-directed plan. A
report under this subsection shall be accompanied by an affidavit
from a knowledgeable official of the customer that the information
in the report is true and correct to the best of the official's
knowledge and belief. If the customer has retained an independent
energy
optimization waste
reduction service company, the
requirements of this subsection shall be met by the energy
optimization
waste reduction service company.
(10) An electric provider shall provide an annual report to
the commission that identifies customers implementing self-directed
energy
optimization waste
reduction plans and summarizes the
results achieved cumulatively under those self-directed plans. The
commission may request additional information from the electric
provider. If the commission has sufficient reason to believe the
information is inaccurate or incomplete, it may request additional
information from the customer to ensure accuracy of the report.
(11) If the commission determines after a contested case
hearing
that the minimum energy optimization waste reduction goals
under subsection (6)(b) have not been achieved at the sites covered
by a self-directed plan, in aggregate, the commission shall order
the customer or customers collectively to pay to this state an
amount calculated as follows:
(a) Determine the proportion of the shortfall in achieving the
minimum
energy optimization waste
reduction goals under subsection
(6)(b).
(b) Multiply the figure under subdivision (a) by the energy
optimization
waste reduction charges from which the customer or
customers collectively were exempt under subsection (1).
(c) Multiply the product under subdivision (b) by a number not
less than 1 or greater than 2, as determined by the commission
based on the reasons for failure to meet the minimum energy
optimization
waste reduction goals.
(12) If a customer has submitted a self-directed plan to an
electric
provider, the customer, the customer's energy optimization
waste reduction service company, if applicable, or the electric
provider shall provide a copy of the self-directed plan to the
commission upon request.
(13) By September 1, 2010, following a public hearing, the
commission shall establish an approval process for energy
optimization
waste reduction service companies. The approval
process
shall ensure that energy optimization waste reduction
service companies have the expertise, resources, and business
practices
to reliably provide energy optimization waste reduction
services that meet the requirements of this section. The commission
may adopt by reference the past or current standards of a national
or regional certification or licensing program for energy
optimization
waste reduction service companies. However, the
approval process shall also provide an opportunity for energy
optimization
waste reduction service companies that are not
recognized by such a program to be approved by posting a bond in an
amount determined by the commission and meeting any other
requirements adopted by the commission for the purposes of this
subsection.
The approval process for energy optimization waste
reduction service companies shall require adherence to a code of
conduct
governing the relationship between energy optimization
waste reduction service companies and electric providers.
(14)
The department of energy, labor, and economic growth
licensing and regulatory affairs shall maintain on the department's
website
a list of energy optimization waste
reduction service
companies approved under subsection (13).
(15) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
(16) This section is repealed effective January 1, 2019.
Sec. 95. (1) The commission shall do all of the following:
(a) Promote load management in appropriate circumstances,
including encouraging the establishment of load management programs
in which an electric provider may remotely shut down air
conditioning or other energy intensive systems of participating
customers. Electric provider participation and customer enrollment
in such programs shall be voluntary. The programs may provide
incentives for customer participation and shall include customer
protection provisions as required by the commission.
(b) Actively pursue increasing public awareness of load
management techniques.
(c) Engage in regional load management efforts to reduce the
annual demand for energy whenever possible.
(d) Work with residential, commercial, and industrial
customers to reduce annual demand and conserve energy through load
management techniques and other activities it considers
appropriate.
The commission shall file a report with the
legislature
by December 31, 2010 on the effort to reduce peak
demand.
The report shall also include any recommendations for
legislative
action concerning load management that the commission
considers
necessary.
(2) The commission may allow a provider whose rates are
regulated by the commission to recover costs for load management
undertaken
pursuant to an energy optimization plan through base
rates as part of a proceeding under section 6 of 1939 PA 3, MCL
460.6, if the costs are reasonable and prudent and meet the utility
systems resource cost test.
(3)
The commission shall do all of the following:
(a)
Promote energy efficiency and energy conservation.
(b)
Actively pursue increasing public awareness of energy
conservation
and energy efficiency.
(c)
Actively engage in energy conservation and energy
efficiency
efforts with providers.
(d)
Engage in regional efforts to reduce demand for energy
through
energy conservation and energy efficiency.
(e)
By November 30, 2009, and each year thereafter, submit to
the
standing committees of the senate and house of representatives
with
primary responsibility for energy and environmental issues a
report
on the effort to implement energy conservation and energy
efficiency
programs or measures. The report may include any
recommendations
of the commission for energy conservation
legislation.
(3) (4)
This subpart does not limit the
authority of the
commission, following an integrated resource plan proceeding and as
part of a rate-making process, to allow a provider whose rates are
regulated by the commission to recover for additional prudent
energy efficiency and energy conservation measures not included in
the
provider's energy optimization waste
reduction plan if the
provider
has met the requirements of the energy optimization waste
reduction program.
(4) This section as amended by the 2015 amendatory act that
added this subsection takes effect 90 days after the date that act
is enacted into law.
Sec. 97. (1) By a time determined by the commission, each
provider shall submit to the commission an annual report that
provides information relating to the actions taken by the provider
to
comply with the energy optimization waste reduction standards.
By that same time, a municipally-owned electric utility shall
submit a copy of the report to the governing body of the
municipally-owned electric utility, and a cooperative electric
utility shall submit a copy of the report to its board of
directors.
(2) An annual report under subsection (1) shall include all of
the following information:
(a)
The number of energy optimization waste reduction credits
that the provider generated during the reporting period.
(b) Expenditures made in the past year and anticipated future
expenditures to comply with this subpart.
(c) Any other information that the commission determines
necessary.
(3) Concurrent with the submission of each report under
subsection (1), a municipally-owned electric utility shall submit a
summary of the report to its customers in their bills with a bill
insert and to its governing body. Concurrent with the submission of
each report under subsection (1), a cooperative electric utility
shall submit a summary of the report to its members in a periodical
issued by an association of rural electric cooperatives and to its
board of directors. A municipally-owned electric utility or
cooperative electric provider shall make a copy of the report
available at its office and shall post a copy of the report on its
website. A summary under this section shall indicate that a copy of
the report is available at the office or website.
(4)
Not later than 1 year after the effective date of this
act,
the commission shall submit a report on the potential rate
impacts
on all classes of customers if the electric providers whose
rates
are regulated by the commission decouple rates. The report
shall
be submitted to the standing committees of the senate and
house
of representatives with primary responsibility for energy and
environmental
issues. The commission's report shall review whether
decoupling
would be cost-effective and would reduce the overall
consumption
of fossil fuels in this state.
(5)
By October 1, 2010, the commission shall submit to the
committees
described in subsection (4) any recommendations for
legislative
action to increase energy conservation and energy
efficiency
based on reports under subsection (1), the energy
optimization
plans approved under section 89, and the commission's
own
investigation. By March 1, 2013, the commission shall submit to
those
committees a report on the progress of electric providers in
achieving
reductions in energy use. The commission may use an
independent
evaluator to review the submissions by electric
providers.
(4) (6)
By February 15, 2011 and each year thereafter and by
September
30, 2015, the The commission shall submit to the standing
committees
described in subsection (4) of
the senate and house of
representatives with primary responsibility for energy issues a
report
that evaluates and determines whether this subpart and
subpart
A have each has been cost-effective and makes
recommendations
to the legislature. The report shall may be
combined
with any concurrent report by the commission under section
51.the annual report under section 5a of 1939 PA
3, MCL 460.5a.
(7)
The report required by September 30, 2015 under subsection
(6)
shall also review the opportunities for additional cost-
effective
energy optimization programs and make any recommendations
the
commission may have for legislation providing for the
continuation,
expansion, or reduction of energy optimization
standards.
That report shall also include the commission's
determinations
of all of the following:
(a)
The percentage of total energy savings required by the
energy
optimization standards that have actually been achieved by
each
electric provider and by all electric providers cumulatively.
(b)
The percentage of total energy savings required by the
energy
optimization standards that have actually been achieved by
each
natural gas provider and by all natural gas providers
cumulatively.
(c)
For each provider, whether that provider's program under
this
subpart has been cost-effective.
(5) (8)
If the commission determines in
its report required by
September
30, 2015 under subsection (6) or determines subsequently
that
a provider's energy optimization waste reduction program
under
this subpart has not been cost-effective, the provider's program is
suspended
beginning 180 days after the date of the report or
subsequent
determination. If a provider's
energy optimization waste
reduction program is suspended under this subsection, both of the
following apply:
(a) The provider shall maintain cumulative incremental energy
savings in megawatt hours or decatherms or equivalent MCFs in
subsequent years at the level actually achieved during the year
preceding the year in which the commission's determination is made.
(b)
The provider shall not impose energy optimization waste
reduction charges in subsequent years except to the extent
necessary
to recover unrecovered energy optimization waste
reduction expenses incurred under this subpart before suspension of
the provider's program.
(6) This section is repealed effective January 1, 2019.
Sec. 98. (1) By a time determined by the commission, each
natural gas provider shall submit to the commission an annual
report that provides information relating to the actions taken by
the provider to comply with the energy waste reduction standards.
(2) An annual report under subsection (1) shall include all of
the following information:
(a) The amount of energy waste reduction achieved during the
reporting period.
(b) Expenditures made in the past year and anticipated future
expenditures to comply with this subpart.
(c) Any other information that the commission determines
necessary.
(3) The commission shall submit to the standing committees of
the senate and house of representatives with primary responsibility
for energy and environmental issues a report that evaluates and
determines whether this subpart has been cost-effective and makes
recommendations to the legislature. The report shall be combined
with the annual report under section 5a of 1939 PA 3, MCL 460.5a.
(4) If the commission determines that a natural gas provider's
energy waste reduction program under this subpart has not been
cost-effective, the natural gas provider's program is suspended
beginning 180 days after the date of the subsequent determination.
If a provider's energy waste reduction program is suspended under
this subsection, both of the following apply:
(a) The natural gas provider shall maintain cumulative
incremental energy savings in decatherms or equivalent MCFs in
subsequent years at the level actually achieved during the year
preceding the year in which the commission's determination is made.
(b) The natural gas provider shall not impose energy waste
reduction charges in subsequent years except to the extent
necessary to recover unrecovered energy waste reduction expenses
incurred under this subpart before suspension of the provider's
program.
(5) This section takes effect January 1, 2019.
Sec. 99. (1) The attorney general or any customer of a
cooperative electric utility that has elected to become member-
regulated under the electric cooperative member-regulation act,
2008 PA 167, MCL 460.31 to 460.39, may commence a civil action for
injunctive relief against such a cooperative electric utility if
the electric provider fails to meet the applicable requirements of
this subpart or an order issued or rule promulgated under this
subpart.
(2) An action under subsection (1) shall be commenced in the
circuit court for the circuit in which the principal office of the
cooperative electric utility that has elected to become member-
regulated is located. An action shall not be filed under subsection
(1) unless the prospective plaintiff has given the prospective
defendant and the commission at least 60 days' written notice of
the prospective plaintiff's intent to sue, the basis for the suit,
and the relief sought. Within 30 days after the prospective
defendant receives written notice of the prospective plaintiff's
intent to sue, the prospective defendant and plaintiff shall meet
and make a good faith attempt to determine if there is a credible
basis for the action. If both parties agree that there is a
credible basis for the action, the prospective defendant shall take
all reasonable and prudent steps necessary to comply with the
applicable requirements of this subpart within 90 days of the
meeting.
(3) In issuing a final order in an action brought under
subsection (1), the court may award costs of litigation, including
reasonable attorney and expert witness fees, to the prevailing or
substantially prevailing party.
(4) Upon receipt of a complaint by any customer of a
municipally-owned electric utility or upon the commission's own
motion, the commission may review allegations that the municipally-
owned electric utility has violated this subpart or an order issued
or rule promulgated under this subpart. If the commission finds,
after notice and hearing, that a municipally-owned electric utility
has violated this subpart or an order issued or rule promulgated
under this subpart, the commission shall advise the attorney
general. The attorney general may commence a civil action for
injunctive relief against the municipally-owned electric utility in
the circuit court for the circuit in which the principal office of
the municipally-owned electric utility is located.
(5) In issuing a final order in an action brought under
subsection (4), the court may award costs of litigation, including
reasonable attorney and expert witness fees, to the prevailing or
substantially prevailing party.
(6) This section takes effect 90 days after the date the 2015
amendatory act that added this section is enacted into law.
(7) This section is repealed effective January 1, 2019.
SUBPART C.D.
MISCELLANEOUS
Sec. 113. (1) Notwithstanding any other provision of this
part,
electricity or natural gas used in the installation,
operation, or testing of any pollution control equipment is exempt
from the requirements of, and calculations of compliance required
under, this part.
(2) This section, as amended by the 2015 amendatory act that
added this subsection, takes effect January 1, 2019.
PART 5.
DISTRIBUTED GENERATION AND NET METERING
Sec.
173. (1) The commission shall establish a statewide net
metering
distributed generation program by order issued not later
than
180 90 days after the effective date of this act. No
later
than
180 days after the effective date of this act, the commission
shall
promulgate rules regarding any time limits on the submission
of
net metering applications or inspections of net metering
equipment
and any other matters the commission considers necessary
to
implement this part. the 2015
amendatory act that amended this
section. The commission may promulgate rules the commission
considers necessary to implement this program. Any rules adopted
regarding time limits for approval of parallel operation shall
recognize reliability and safety complications including those
arising from equipment saturation, use of multiple technologies,
and proximity to synchronous motor loads. The program shall apply
to all electric utilities and alternative electric suppliers in
this state.
(2)
Except as otherwise provided under this
part, customers a
customer
of any class are is eligible
to interconnect an eligible
electric
generators generator with the customer's local electric
utility
and operate the generators eligible
electric generator in
parallel with the distribution system. The program shall be
designed for a period of not less than 10 years and limit each
customer
to generation capacity designed to meet only the
customer's
electric needs. up to 110% of
the customer's average
annual electricity consumption. The commission may waive the
application, interconnection, and installation requirements of this
part for customers participating in the net metering program under
the commission's March 29, 2005 order in case no. U-14346 or the
distributed generation program under this part.
(3) (2)
An electric utility or alternative
electric supplier
is
not required to allow for net metering distributed generation
that
is greater than 1% 10% of its average
in-state peak load for
the
preceding 5 calendar year. years. The electric utility
or
alternative electric supplier shall notify the commission if its
net
metering distributed
generation program reaches the 1%
requirement
10% limit under this subsection. The 1% 10% limit
under
this subsection shall be allocated as follows:
(a)
No more than 0.5% 5% for customers with a system an
eligible electric generator capable of generating 20 kilowatts or
less.
(b)
No more than 0.25% 2.5% for customers with a system an
eligible electric generator capable of generating more than 20
kilowatts but not more than 150 kilowatts.
(c)
No more than 0.25% 2.5% for customers with a system an
eligible electric generator capable of generating more than 150
kilowatts.
(4) (3)
Selection of customers for
participation in the net
metering
distributed generation program shall be based on the order
in
which the applications for participation in the net metering
program are received by the electric utility or alternative
electric supplier.
(5) (4)
An electric utility or alternative
electric supplier
shall
not discontinue or refuse to provide or discontinue electric
service
to a customer solely for the reason that because the
customer
participates in the net metering distributed generation
program.
(6) (5)
The distributed generation program
created under
subsection (1) shall include all of the following:
(a) Statewide uniform interconnection requirements for all
eligible electric generators. The interconnection requirements
shall be designed to protect electric utility workers and equipment
and the general public.
(b)
Net metering Distributed
generation equipment and its
installation
must shall meet all current local and state electric
and
construction code requirements. Any equipment that is certified
by
a nationally recognized testing laboratory to IEEE 1547.1
testing
standards and in compliance with UL 1741 scope 1.1A,
effective
May 7, 2007, and installed in compliance with this part
is
considered to be eligible equipment. Within
the time provided by
the commission in rules promulgated under subsection (1) and
consistent with good utility practice, and the protection of
electric
utility workers, protection of electric utility equipment,
and
protection of the general public, an electric utility may
study, confirm, and ensure that an eligible electric generator
installation at the customer's site meets the IEEE 1547 anti-
islanding requirements. If necessary to promote reliability or
safety, the commission may promulgate rules that require the use of
inverters that perform specific automated grid-balancing functions
to integrate distributed generation onto the electric grid.
Inverters that interconnect distributed generation resources may be
owned and operated by electric utilities. Utility testing and
approval of the interconnection and execution of a parallel
operating agreement must be completed prior to the equipment
operating in parallel with the distribution system of the utility.
(c) A uniform application form and process to be used by all
electric utilities and alternative electric suppliers in this
state. Customers who are served by an alternative electric supplier
shall submit a copy of the application to the electric utility for
the customer's service area.
(d)
Net metering customers with a system capable of generating
20
kilowatts or less qualify for true net metering.
(e)
Net metering customers with a system capable of generating
more
than 20 kilowatts qualify for modified net metering.
(7) (6)
Each electric utility and
alternative electric
supplier shall maintain records of all applications and up-to-date
records of all active eligible electric generators located within
their service area.
Sec. 175. (1) An electric utility or alternative electric
supplier
may charge a fee not to exceed $100.00 $50.00 to process
an
application for net metering. A customer with a system capable
of
generating more than 20 kilowatts to
participate in the
distributed generation program. The customer shall pay all
interconnection
costs. A customer with a system capable of
generating
more than 150 kilowatts shall pay standby costs. The
commission shall recognize the reasonable cost for each electric
utility
and alternative electric supplier to operate a net metering
distributed generation program. For an electric utility with
1,000,000 or more retail customers in this state, the commission
shall include in that electric utility's nonfuel base rates all
costs of meeting all program requirements except that all energy
costs of the program shall be recovered through the utility's power
supply
cost recovery mechanism under sections section 6j and 6k of
1939
PA 3, MCL 460.6j. and 460.6k. For an electric utility with
less
fewer than 1,000,000 base distribution customers in this
state, the commission shall allow that electric utility to recover
all energy costs of the program through the power supply cost
recovery
mechanism under sections section
6j and 6k of 1939 PA 3,
MCL
460.6j, and 460.6k, and shall develop a cost
recovery mechanism
for that utility to contemporaneously recover all other costs of
meeting the program requirements.
(2)
The interconnection requirements of the net metering
distributed generation program shall provide that an electric
utility or alternative electric supplier shall, subject to any time
requirements imposed by the commission and upon reasonable written
notice
to the net metering distributed
generation customer, perform
testing and inspection of an interconnected eligible electric
generator as is necessary to determine that the system complies
with all applicable electric safety, power quality, and
interconnection requirements. The costs of testing and inspection
are
considered a cost of operating a net metering distributed
generation program and shall be recovered under subsection (1).
(3) The interconnection requirements shall require all
eligible electric generators, alternative electric suppliers, and
electric utilities to comply with all applicable federal, state,
and local laws, rules, or regulations, and any national standards
as determined by the commission.
Sec. 177. (1) Electric meters shall be used to determine the
amount
of the customer's energy electricity
use in each billing
period ,
net of any excess energy the customer's generator delivers
to
the utility distribution system during that same billing period.
For
a customer with a generation system capable of generating more
than
20 kilowatts, the utility shall install and utilize a
generation
meter and a meter or meters capable of measuring the
flow
of energy in both directions. A customer with a system capable
of
generating more than 150 kilowatts shall pay the costs of
installing
any new meters.and the amount
of electricity produced by
the eligible electric generator on the customer's site.
(2)
An electric utility serving over 1,000,000 customers in
this
state may shall provide its customers participating in the net
metering
distributed generation program, at no additional charge,
cost, a meter or meters capable of measuring the flow of energy in
both directions.
(3)
An electric utility serving fewer than 1,000,000 customers
in
this state shall provide a meter or meters described in
subsection
(2) to customers participating in the net metering
program
at cost. Only the incremental cost above that for meters
provided
by the electric utility to similarly situated
nongenerating
customers shall be paid by the eligible customer.
(3)
(4) If the quantity of electricity
generated and delivered
to
the utility distribution system by an eligible electric
generator
during a billing period exceeds the quantity of
electricity
supplied from the electric utility or alternative
electric
supplier during the billing period, the eligible customer
shall
be credited by their supplier of electric generation service
for
the excess kilowatt hours generated during the billing period.
The
credit shall appear on the bill for the following billing
period
and shall be limited to the total power supply charges on
that
bill. Any excess kilowatt hours not used to offset electric
generation
charges in the next billing period will be carried
forward
to subsequent billing periods. A
customer participating in
the distributed generation program shall purchase all of the
electricity the customer consumes from the electric utility or
alternative electric supplier at the applicable retail electricity
rates and charges. If participating in net metering, the customer
shall receive a bill credit for all electricity produced by the
eligible electric generator on the customer's site. The bill credit
shall be the value of the energy avoided by the electric utility or
alternative electric supplier as a result of the customer's
participation. The value of the energy avoided by the electric
utility or alternative electric supplier shall be determined by
applying the day-ahead wholesale energy market clearing price at
the appropriate pricing node for each kilowatt-hour produced by the
eligible electric generator. The value of the energy avoided shall
be determined by applying the relevant independent system
operator's monthly capacity auction clearing price for each
kilowatt per month, discounted for variable generating units
according to the methodology used by the independent system
operator. If the bill credit exceeds the charges for the customer's
electric consumption, the bill credit shall carry over to
subsequent billing periods indefinitely until fully utilized to
offset charges for the customer's electric consumption. The
electric utility or alternative electric supplier may, upon
approval by the commission, charge a minimum bill amount to support
the customer's use of the electric grid for any month in which a
customer's monthly bill credit exceeds the charges for the
customer's
consumption. Notwithstanding any law or
regulation, net
metering
distributed generation
program customers shall not receive
credits for electric utility transmission or distribution charges.
The
credit per kilowatt hour for kilowatt hours delivered into the
utility's
distribution system shall be either of the following:
(a)
The monthly average real-time locational marginal price
for
energy at the commercial pricing node within the electric
utility's
distribution service territory, or for net metering
customers
on a time-based rate schedule, the monthly average real-
time
locational marginal price for energy at the commercial pricing
node
within the electric utility's distribution service territory
during
the time-of-use pricing period.
(b)
The electric utility's or alternative electric supplier's
power
supply component of the full retail rate during the billing
period
or time-of-use pricing period.
(4) A customer participating in the distributed generation
program shall be charged the electric utility's or alternative
electric supplier's full retail rate for all inflow. For total
customer generation minus outflow, the customer shall pay all
delivery charges applicable to the electric utility's or
alternative electric supplier's retail rate, plus the nonfuel
portion of the electric utility's or alternative electric
supplier's power supply rates.
Sec.
179. An eligible electric generator A customer shall own
any renewable energy credits granted for electricity generated on
the
customer's site under the net
metering distributed
generation
program created in this part.
PART 7.
RESIDENTIAL ENERGY IMPROVEMENTS
Sec. 201. As used in this part:
(a) "Energy waste reduction improvement" means equipment,
devices, or materials intended to decrease energy consumption,
including, but not limited to, all of the following:
(i) Insulation in walls, roofs, floors, foundations, or
heating and cooling distribution systems.
(ii) Storm windows and doors; multi-glazed windows and doors;
heat-absorbing or heat-reflective glazed and coated window and door
systems; and additional glazing, reductions in glass area, and
other window and door system modifications that reduce energy
consumption.
(iii) Automated energy control systems.
(iv) Heating, ventilating, or air-conditioning and
distribution system modifications or replacements.
(v) Air sealing, caulking, and weather-stripping.
(vi) Lighting fixtures that reduce the energy use of the
lighting system.
(vii) Energy recovery systems.
(viii) Day lighting systems.
(ix) Electrical wiring or outlets to charge a motor vehicle
that is fully or partially powered by electricity.
(x) Measures to reduce the usage of water or increase the
efficiency of water usage.
(xi) Any other installation or modification of equipment,
devices, or materials approved as a utility cost-savings measure by
the governing body.
(b) "Energy project" means the installation or modification of
an energy waste reduction improvement or the acquisition,
installation, or improvement of a clean energy system.
(c) "Home energy audit" means an evaluation of the energy
performance of a residential structure, by a qualified person using
building-performance diagnostic equipment and complying with
American National Standards Institute-approved home energy audit
standards, that meets both of the following requirements:
(i) Determines how best to optimize energy performance while
maintaining or improving human comfort, health, and safety and the
durability of the structure.
(ii) Includes a baseline energy model and cost-benefit
analysis for recommended energy waste reduction improvements.
(d) "Property" means privately owned residential real
property.
(e) "Record owner" means the person or persons possessed of
the most recent fee title or land contract vendee's interest in
property as shown by the records of the county register of deeds.
(f) "Residential energy projects program" or "program" means a
program as described in section 203(2).
Sec. 203. (1) Pursuant to section 205, a provider may
establish a residential energy projects program.
(2) Under a residential energy projects program, if a record
owner of property in the provider's service territory obtains
financing or refinancing of an energy project on the property from
a commercial lender or other legal entity, including an independent
subsidiary of the provider, the loan is repaid through itemized
charges on the provider's utility bill for that property. The
itemized charges may cover the cost of materials and labor
necessary for installation, home energy audit costs, permit fees,
inspection fees, application and administrative fees, bank fees,
and all other fees that may be incurred by the record owner for the
installation on a specific or pro rata basis, as determined by the
provider.
Sec. 205. (1) A residential energy projects program shall be
established and implemented pursuant to a plan approved by the
commission. A provider seeking to establish a residential energy
projects program shall file a proposed plan with the commission.
(2) A plan under subsection (1) shall include all of the
following:
(a) The estimated costs of administration of the residential
energy projects program.
(b) Whether the residential energy projects program will be
administered by a third party.
(c) An application process and eligibility requirements for a
record owner to participate in the residential energy projects
program.
(d) An application form governing the terms and conditions for
a record owner's participation in the program, including an
explanation of billing under subdivision (f) and of the provisions
of section 207.
(e) A description of any fees to cover application,
administration, or other program costs to be charged to a record
owner participating in the program, including the amount of each
fee, if known, or procedures to determine the amount. A fee shall
not exceed the costs incurred by the provider for the activity for
which the fees are charged.
(f) Provisions for billing customers of the provider any fees
under subdivision (e) and the monthly installment payments as a
per-meter charge on the bill for electric or natural gas services.
(g) Provisions for marketing and participant education.
(3) The commission shall not approve a provider's proposed
residential energy projects plan unless the commission determines
that the plan is reasonable and prudent.
(4) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
(5) Every 4 years after initial approval of a plan under
subsection (1), the commission shall review the plan.
Sec. 207. (1) A baseline home energy audit shall be conducted
before an energy project is undertaken. After the energy project is
completed, the provider shall obtain verification that the energy
project was properly installed and is operating as intended.
(2) Electric or natural gas service may be shut off for
nonpayment of the per-meter charge described under section 205 in
the same manner and pursuant to the same procedures as used to
enforce nonpayment of other charges for the provider's electric or
natural gas service. If notice of a loan under the program is
recorded with the register of deeds for the county in which the
property is located, the obligation to pay the per-meter charge
shall run with the land and be binding on future customers
contracting for electric service or natural gas service, as
applicable, to the property.
Sec. 209. (1) The term of a loan paid through a residential
energy projects program shall not exceed the anticipated useful
life of the energy project financed by the loan or 180 months,
whichever is less. The loan shall be repaid in monthly
installments.
(2) The lender shall comply with all state and federal laws
applicable to the extension of credit for home improvements.
(3) If a nonprofit corporation makes loans to owners of
property to be repaid under a residential energy project program,
interest shall be charged on the unpaid balance at a rate of not
more than the adjusted prime rate as determined under section 23 of
1941 PA 122, MCL 205.23, plus 4%.
Sec. 211. (1) Pursuant to the administrative procedures act of
1969, 1969 PA 306, MCL 24.201 to 24.328, the commission shall
promulgate rules to implement this part within 1 year after the
effective date of this section.
(2) Every 5 years after the promulgation of rules under
subsection (1), the commission shall submit a report to the
standing committees of the senate and house of representatives with
primary responsibility for energy issues on the implementation of
this part and any recommendations for legislation to amend this
part. The report may be combined with the annual report under
section 5a of 1939 PA 3, MCL 460.5a.
Enacting section 1. Sections 21, 23, 25, 27, 29, 31, 33, 35,
37, 39, 43, 45, 49, 51, 53, and 79 of the clean, renewable, and
efficient energy act, 2008 PA 295, MCL 460.1021, 460.1023,
460.1025, 460.1027, 460.1029, 460.1031, 460.1033, 460.1035,
460.1037, 460.1039, 460.1043, 460.1045, 460.1049, 460.1051,
460.1053, and 460.1079, are repealed.
Enacting section 2. Except as otherwise provided in this
amendatory act, this amendatory act takes effect 90 days after the
date it is enacted into law.
