Bill Text: MI SB0438 | 2015-2016 | 98th Legislature | Engrossed
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-Engrossed.html
SB-0438, As Passed Senate, November 10, 2016
SUBSTITUTE FOR
SENATE BILL NO. 438
<<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 the heading of part 5, and sections 1, 3, 5, 7, 9, 11, 13, 29, 39,
41, 45, 47, 49, 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, 460.1029, 460.1039, 460.1041,
460.1045, 460.1047, 460.1049, 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 29 as amended by 2008
PA 295, section 93 as amended by 2010 PA 269, and by adding subpart B
to part 2, sections 22, 28, 78, 99, 183, and 185, 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 and recover costs for renewable 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 , and renewable ,
and efficient energy and energy waste
reduction 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 and renewable 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 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.
(e) Remove unnecessary burdens on the appropriate use of solid
waste as a clean energy source.
(3) As a goal, not less than 35% of this state's electric
needs should be met through a combination of energy waste reduction
and renewable energy by 2025, if the investments in energy waste
reduction and renewable energy are the most reasonable means of
meeting an electric utility's energy and capacity needs relative to
other resource options. Both of the following count toward
achievement of the goal:
(a) All renewable energy, including renewable energy credits
purchased or otherwise acquired with or without the associated
renewable energy, and any banked renewable energy credits, that
counted toward the renewable energy standard on the effective date
of the 2016 amendatory act that added this subsection, as well as
renewable energy credits granted as a result of any investments
made in renewable energy by the utility or a utility customer after
that effective date.
(b) The sum of the annual electricity savings since October 6,
2008, as recognized by the commission through annual reconciliation
proceedings, that resulted from energy waste reduction measures
implemented under an energy optimization plan or energy waste
reduction plan approved under section 73.
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.
(c)
"Advanced cleaner energy system" means any of the
following:
(i) A gasification facility.
(ii) An industrial cogeneration facility.
(iii) A coal-fired electric generating facility if 85%
or more
of
the carbon dioxide emissions are captured and permanently
geologically
sequestered.
(iv) An electric generating facility or system that
uses
technologies
not in commercial operation on the effective date of
this
act.
(d)
"Affiliated transmission company" means that term as
defined
in the electric transmission line certification act, 1995
PA
30, MCL 460.562.
(a) (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.
(b) (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.
(c) (g)
"Board" means the wind
energy resource zone board
created under section 143.
(d) (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 or an integrated
pyrolysis 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.
(e) "Cogeneration facility" means a facility that produces
both electricity and useful thermal energy, such as heat or steam,
in a way that is more efficient than the separate production of
those forms of energy.
(f) (i)
"Commission" means the
Michigan public service
commission.
(g) (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.
(h) "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), 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 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 energy system with a generation capacity
limited to the customer's electric need and that does not exceed
the following:
(i) For a renewable 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 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.provider
costs.
(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.
(j) (i)
"Energy optimization waste reduction standard" means
the minimum energy savings required to be achieved under section 77
or 78(1), 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 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 with the 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) (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.
(e) "Integrated pyrolysis combined cycle facility" means a
pyrolysis facility 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 behavior
to result in decreased peak
electricity demand such as by shifting demand from a peak to an
off-peak period.
(h) (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 Under modified net
metering, standby charges for distributed generation 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 under
modified net metering for distributed generation customers on
demand-based rate schedules that provide an equivalent contribution
to utility system costs. A distribution charge shall not be
recovered more than once. This subdivision is subject to section
177(5).
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) "Pet coke" means a solid carbonaceous residue produced
from a coker after cracking and distillation from petroleum
refining operations.
(c) (b)
"Plasma arc gasification
facility" means a
gasification facility that uses a plasma torch to break substances
down into their molecular structures.
(d) (c)
"Provider" means an
electric provider or a natural gas
provider.
(e) (d)
"PURPA" means the public
utility regulatory policies
act of 1978, Public Law 95-617.
(e)
"Qualifying small power production facility" means that
term
as defined in 16 USC 824a-3.
(f) "Pyrolysis facility" means a facility that effects
thermochemical decomposition at elevated temperatures without the
participation of oxygen, from carbon-based feedstocks including,
but not limited to, coal, wood, biomass, industrial waste, or solid
waste, but not including pet coke, hazardous waste, coal waste, or
scrap tires. Pyrolysis facility includes the transmission lines,
gas transportation lines and facilities, and associated property
and equipment specifically attributable to the facility. Pyrolysis
facility includes, but is not limited to, an integrated pyrolysis
combined cycle facility.
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 section 27(2) for a particular year.
(b) (c)
"Renewable energy
contract" means a contract to
acquire renewable energy and the associated renewable energy
credits from 1 or more renewable energy systems.
(c) (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.
(d) (e)
"Renewable energy credit
portfolio" means the sum of
the renewable energy credits achieved by a provider for a
particular year.
(e) (f)
"Renewable energy credit
standard" means a minimum
renewable energy credit portfolio required under section 28 or
former 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 section 22 or former section 21 or 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, including the biogenic and
anthropogenic factions.
(vii) Landfill gas produced by municipal solid waste.
(viii) Fuel that has been manufactured in whole or significant
part from waste, including, but not limited to, municipal solid
waste. Fuel that meets the requirements of this subparagraph
includes, but is not limited to, material that is listed under 40
CFR 241.3(b) or 241.4(a) or for which a nonwaste determination is
made by the United States Environmental Protection Agency pursuant
to 40 CFR 241.3(c). Pet coke, hazardous waste, coal waste, or scrap
tires are not fuel that meets the requirements of this
subparagraph.
(h) (j)
"Renewable energy
standard" means the minimum
renewable energy capacity portfolio, if applicable, and the
renewable energy credit portfolio required to be achieved under
section 28 or 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 October
6, 2008 unless the dam
is
a repair or replacement of a dam in existence on the effective
date
of this act October 6, 2008 or an upgrade of a dam in
existence
on the effective date of this act October 6, 2008 that
increases its energy efficiency.
(iii) 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, including any of the following:
(A)
Any upgrade of such an incinerator that increases energy
efficiency.
(B)
Any expansion of such an incinerator before the effective
date
of this act.
(C)
Any expansion of such an incinerator on or after the
effective
date of this act 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
section
21.provided for under section
22.
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). This subdivision
is subject to section 177(5).
(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, 2021, 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.
(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.
(f) "Wind energy resource zone" or "wind zone" means an area
designated by the commission under section 147.
Sec. 22. (1) Renewable energy plans and associated revenue
recovery mechanisms filed by an electric provider, approved under
former section 21 or 23 or found to comply with this act under
former section 25 and in effect on the effective date of the 2016
amendatory act that added this section, remain in effect, subject
to amendments as provided for under subsections (3) and (4).
(2) For an electric provider whose rates are regulated by the
commission, amended renewable energy plans shall establish a
nonvolumetric mechanism for the recovery of the incremental costs
of compliance within the electric provider's customer rates. The
revenue recovery mechanism shall not result in rate impacts that
exceed the monthly maximum retail rate impacts specified under
section 45. The revenue recovery mechanism is subject to adjustment
under sections 47(4) and 49.
(3) Within 1 year after the effective date of the 2016
amendatory act that added this section, the commission shall review
each electric provider's plan. For an electric provider whose rates
are regulated by the commission, 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
Senate Bill No. 438 as amended November 10, 2016
the hearing, the commission shall approve, with any changes
consented to by the electric provider, or reject the plan and any
amendments to the plan. For all other electric providers, the
commission shall provide an opportunity for public comment on the
plan. After the applicable opportunity for public comment, the
commission shall determine whether any amendment to the plan
proposed by the provider complies with this act. For alternative
electric suppliers << >>, the commission shall
approve, with any changes consented to by the electric provider, or
reject any proposed amendments to the plan. For <<cooperative electric
utilities and>> municipally owned
utilities, the proposed amendment is adopted if the commission
determines that it complies with this act.
(4) If an electric provider proposes to amend its plan after
the review process under subsection (3), the electric provider
shall file the proposed amendment with the commission. For an
electric provider whose rates are regulated by the commission, if
the proposed amendment would modify the revenue recovery mechanism,
the commission shall conduct a contested case hearing on the
amendment pursuant to the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328. After the hearing and within 90
days after the amendment is filed, the commission shall approve,
with any changes consented to by the electric provider, or reject
the plan and the proposed amendment or amendments to the plan. For
all other electric providers, the commission shall provide an
opportunity for public comment on the amendment. After the
applicable opportunity for public comment and within 90 days after
the amendment is filed, the commission shall determine whether the
Senate Bill No. 438 as amended November 10, 2016
proposed amendment to the plan complies with this act. For
alternative electric suppliers and cooperative utilities, the
commission shall approve, with any changes consented to by the
electric provider, or reject any proposed amendments to the plan.
For municipally owned utilities, the proposed amendment is adopted
if the commission determines that it complies with this act.
(5) <<For an electric provider whose rates are regulated by the
commission, the>> commission shall approve <<the >> plan
or amendments to the plan or determine that the plan or amendments
comply with this act as appropriate if the commission determines:
(a) That the plan is reasonable and prudent. In making this
determination, the commission shall take into consideration
projected costs and whether or not projected costs in prior plans
were exceeded.
(b) That the plan is consistent with the purpose and goal set
forth in section 1(2) and (3) and meets the renewable energy credit
standard.
(6) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
Sec. 28. (1) An electric provider shall achieve a renewable
energy credit portfolio <<as follows:
(A) In 2016 through 2018, a renewable energy credit portfolio
that consists of at least the same number of renewable energy credits
as were required under former section 27.
(B) In 2019 through 2021, a renewable energy credit portfolio of
at least 12.5%, as calculated under subsection (2).
(C) In 2021, a renewable energy credit portfolio of at least 15%,
as calculated under subsection (2).>>
(2) An electric provider's renewable energy credit portfolio
shall be calculated as follows:
(a) Determine the number of renewable energy credits used to
comply with this subpart during the applicable year.
(b) Divide by 1 of the following at the option of the electric
provider as specified in its renewable energy plan:
(i) The number of weather normalized megawatt hours of
electricity sold by the electric provider during the previous year
to retail customers in this state.
(ii) 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.
(c) Multiply the quotient under subdivision (b) by 100.
(3) Subject to subsection (5), each electric provider shall
meet the renewable energy credit standards with renewable energy
credits obtained by 1 or more of the following means:
(a) Generating electricity from renewable energy systems for
sale to retail customers.
(b) Purchasing or otherwise acquiring renewable energy credits
with or without the associated renewable energy.
(4) For an electric provider whose rates are regulated by the
commission, the electric provider shall submit a contract entered
into for the purposes of subsection (3) to the commission for
review and approval. If the commission approves the contract, it
shall be considered consistent with the electric provider's
renewable energy plan. The commission shall not approve a contract
based on an unsolicited proposal unless the commission determines
that the unsolicited proposal provides opportunities that may not
otherwise be available or commercially practical through a
competitive bid process.
(5) An electric provider may substitute energy waste reduction
credits for renewable energy credits otherwise required to meet the
Senate Bill No. 438 as amended November 10, 2016 (1 of 3)
renewable energy credit standards if the substitution is approved
by the commission. Under this subsection, energy waste reduction
credits shall not be used by a provider to meet more than 10% of
the renewable energy credit standard. One renewable energy credit
shall be awarded per 1 energy waste reduction credit.
<<Sec.
29. (1) Subject to subsection (2), a renewable energy system that is the source
of renewable energy credits used to satisfy the renewable energy standards
shall be either located outside of this state in the retail electric customer
service territory of any provider that is not an alternative electric supplier
or located anywhere in this state. For the purposes of this subsection, a
retail electric customer service territory shall be considered to be the
territory recognized by the commission on January 1, 2008 and any expansion of
retail electric customer service territory recognized by the commission after
January 1, 2008 under 1939 PA 3, MCL 460.1 to 460.10cc. 460.11. The commission may also expand a service
territory for the purposes of this subsection if a lack of transmission lines
limits the ability to obtain sufficient renewable energy from renewable energy
systems that meet the location requirement of this subsection.
(2) The renewable energy system location requirements in subsection (1) do not apply if 1 or more of the following requirements are met:
(a) The renewable energy system is a wind energy conversion system and the electricity generated by the wind energy system, or the renewable energy credits associated with that electricity, is being purchased under a contract in effect on January 1, 2008. If the electricity and associated renewable energy credits purchased under such a contract are used by an electric provider to meet renewable energy requirements established after January 1, 2008 by the legislature of the state in which the wind energy conversion system is located, the electric provider may, for the purpose of meeting the renewable energy credit standard under this act, obtain, by any means authorized under former section 27, up to the same number of replacement renewable energy credits from any other wind energy conversion systems located in that state. This subdivision shall not be utilized by an alternative electric supplier unless the alternative electric supplier was licensed in this state on January 1, 2008. Renewable energy credits from a renewable energy system under a contract with an alternative electric supplier under this subdivision shall not be used by another electric provider to meet its requirements under this part.
(b) The renewable energy system is a wind energy conversion system that was under construction or operational and owned by an electric provider on January 1, 2008. This subdivision shall not be utilized by an alternative electric supplier.
(c) The renewable energy system is a wind energy conversion system that includes multiple wind turbines, at least 1 of the wind turbines meets the location requirements of this section, and the remaining wind
(2 OF 3)
turbines are within 15 miles of a wind turbine that is part of that wind energy conversion system and that meets the location requirements of this section.
(d) Before January 1, 2008, an electric provider serving not more than 75,000 retail electric customers in this state filed an application for a certificate of authority for the renewable energy system with a state regulatory commission in another state that is also served by the electric provider. However, renewable energy credits shall not be granted under this subdivision for electricity generated using more than 10.0 megawatts of nameplate capacity of the renewable energy system.
(e) Electricity generated from the renewable energy
system is sold by a not-for-profit entity located in Indiana, Ohio, or Wisconsin to a municipally-owned
electric utility in this state or cooperative electric utility in this state, under a contract in effect on January 1, 2008, and
the electricity is not being used to meet another state's standard for
renewable energy.
(f) Electricity generated from the renewable energy
system is sold by a not-for-profit entity located in Ohio to a
municipally-owned electric utility in this state under a contract approved by
resolution of the governing body of the municipally-owned electric utility by
January 1, 2008, and the electricity is not being used to meet another state's
standard for renewable energy. However, renewable energy credits shall not be
granted for electricity generated using more than 13.4 megawatts of nameplate
capacity of the renewable energy system.
(f)
(g) All of the following requirements are met:
(i) The renewable energy system is a wind energy system, is interconnected to the electric provider's transmission system, and is located in a state in which the electric provider has service territory.
(ii) The electric provider competitively bid any contract for engineering, procurement, or construction of the renewable energy system, if the electric provider owns the renewable energy system, or for purchase of the renewable energy and associated renewable energy credits from the renewable energy system, if the provider does not own the renewable energy system, in a process open to renewable energy systems sited in this state.
(iii) The renewable energy credits from the renewable energy system are only used by that electric provider to meet the renewable energy standard.
(iv) The electric provider is not an alternative electric supplier.
(3) Advanced cleaner energy systems that are the source of the advanced cleaner energy credits used under former section 27 shall be either located outside this state in the service territory of any electric provider that is not an alternative electric supplier or located anywhere in this state.>>
Sec. 39. (1) Except as otherwise provided in section 35(1), 1
renewable energy credit shall be granted to the owner of a
renewable energy system for each megawatt hour of electricity
generated from the renewable energy system, subject to all of the
following:
(3 of 3)
(a) If a renewable energy system uses both a renewable energy
resource and a nonrenewable energy resource to generate
electricity, the number of renewable energy credits granted shall
be based on the percentage of the electricity generated from the
renewable energy resource.
(b)
A renewable energy credit shall not be granted for
renewable
energy generated from a municipal solid waste incinerator
to
the extent that the renewable energy was generated by operating
the
incinerator in excess of the greater of the following, as
applicable:
(i) The incinerator's nameplate capacity rating on
January 1,
2008.
(ii) If the incinerator is expanded after the effective
date
of
this act to an approximate continuous design rated capacity of
not
more than 950 tons per day pursuant to the terms of a final
request
for proposals issued not later than October 1986, the
nameplate
capacity rating required to accommodate that expansion.
(b) (c)
A renewable energy credit shall not
be granted for
renewable energy the renewable attributes of which are used by an
electric provider in a commission-approved voluntary renewable
energy program.
(2)
Subject to subsection (3), the The
following additional
renewable energy credits, to be known as Michigan incentive
renewable energy credits, shall be granted under the following
circumstances:
(a) 2 renewable energy credits for each megawatt hour of
electricity from solar power.
(b) 1/5 renewable energy credit for each megawatt hour of
electricity generated from a renewable energy system, other than
wind, at peak demand time as determined by the commission.
(c) 1/5 renewable energy credit for each megawatt hour of
electricity generated from a renewable energy system during off-
peak hours, stored using advanced electric storage technology or a
hydroelectric pumped storage facility, and used during peak hours.
However, the number of renewable energy credits shall be calculated
based on the number of megawatt hours of renewable energy used to
charge the advanced electric storage technology or fill the pumped
storage facility, not the number of megawatt hours actually
discharged or generated by discharge from the advanced energy
storage facility or pumped storage facility.
(d) 1/10 renewable energy credit for each megawatt hour of
electricity generated from a renewable energy system constructed
using equipment made in this state as determined by the commission.
The additional credit under this subdivision is available for the
Senate Bill No. 438 as amended November 10, 2016
first 3 years after the renewable energy system first produces
electricity on a commercial basis.
(e) 1/10 renewable energy credit for each megawatt hour of
electricity from a renewable energy system constructed using a
workforce composed of residents of this state as determined by the
commission. The additional credit under this subdivision is
available for the first 3 years after the renewable energy system
first produces electricity on a commercial basis.
(3) A renewable energy credit expires at the earliest of the
following times:
(a) When used by an electric provider to comply with its
renewable
energy credit standard.
(b)
When substituted for an energy optimization waste
reduction credit under section 77.
(c) When used by an electric provider <<whose rates are regulated
by the commission>> to contribute to
achievement of the goal under section 1(3).
(d) (c)
Three Five years after the end of the month in which
the renewable energy credit was generated.
(4)
A renewable energy credit associated with renewable energy
generated
within 120 days after the start of a calendar year may be
used
to satisfy the prior year's renewable energy standard and
expires
when so used.
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. 45. (1) For an electric provider whose rates are
regulated by the commission, the commission shall determine the
appropriate charges for the electric provider's tariffs that permit
recovery of the incremental cost of compliance subject to the
retail rate impact limits set forth in subsection (2).
(2) An electric provider shall recover the incremental cost of
compliance
with the renewable energy standards. by an itemized
charge
on the customer's bill for billing periods beginning not
earlier
than 90 days after the commission approves the electric
provider's
renewable energy plan under section 21 or 23 or
determines
under section 25 that the plan complies with this act.
An electric provider shall not comply with the renewable energy
standards to the extent that, as determined by the commission,
recovery of the incremental cost of compliance will have a retail
rate impact that exceeds any of the following:
(a) $3.00 per month per residential customer meter.
(b) $16.58 per month per commercial secondary customer meter.
(c) $187.50 per month per commercial primary or industrial
customer meter.
(3) The retail rate impact limits of subsection (2) apply only
to the incremental costs of compliance and do not apply to costs
approved for recovery by the commission other than as provided in
this act.
(4) The incremental cost of compliance shall be calculated for
a 20-year period beginning with approval of the renewable energy
plan and shall be recovered on a levelized basis.
(5)
In its billing statements for a residential customer, each
provider
shall report to the residential customer all of the
following
in a format consistent with other information on the
customer
bill:
(a)
An itemized monthly charge, expressed in dollars and
cents,
collected from the customer for implementing the renewable
energy
program requirements of this act. In the first bill issued
after
the close of the previous year, an electric provider shall
notify
each residential customer that the customer may be entitled
to
an income tax credit to offset some of the annual amounts
collected
for the renewable energy program.
(b)
An itemized monthly charge, expressed in dollars and
cents,
collected from the customer for implementing the energy
optimization
program requirements of this act.
(c)
An estimated monthly savings, expressed in dollars and
cents,
for that customer to reflect the reductions in the monthly
energy
bill produced by the energy optimization program under this
act.
(d)
An estimated monthly savings, expressed in dollars and
cents,
for that customer to reflect the long-term, life-cycle,
levelized
costs of building and operating new conventional coal-
fired
electric generating power plants avoided under this act as
determined
by the commission.
(e)
The website address at which the commission's annual
report
under section 51 is posted.
(6)
For the first year of the programs under this part, the
values
reported under subsection (5) shall be estimates by the
commission.
The values in following years shall be based on the
provider's
actual customer experiences. If the provider is unable
to
provide customer-specific information under subsection (5)(b) or
(c),
it shall instead specify the state average itemized charge or
savings,
as applicable, for residential customers. The provider
shall
make this calculation based on a method approved by the
commission.
(7)
In determining long-term, life-cycle, levelized costs of
building
and operating and acquiring nonrenewable electric
generating
capacity and energy for the purpose of subsection
(5)(d),
the commission shall consider historic and predicted costs
of
financing, construction, operation, maintenance, fuel supplies,
environmental
protection, and other appropriate elements of energy
production.
For purposes of this comparison, the capacity of
avoided
new conventional coal-fired electric generating facilities
shall
be expressed in megawatts and avoided new conventional coal-
fired
electricity generation shall be expressed in megawatt hours.
Avoided
costs shall be measured in cents per kilowatt hour.
Sec. 47. (1) Subject to the retail rate impact limits under
section 45, 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 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
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.
(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.
(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 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 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 revenue
recovery mechanism. An electric provider whose rates are regulated
by the commission 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 of costs of renewable energy or
advanced cleaner energy attributable to 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, 49,
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.
(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 revenue recovery mechanism.
(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 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 (4) and section 49.
(7) As used in this section:
(a) "Advanced cleaner energy" means electricity generated
using an advanced cleaner energy system.
(b) "Advanced cleaner energy system" means any of the
following:
(i) A gasification facility.
(ii) 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) An electric generating facility or system that uses
technologies not in commercial operation on October 6, 2008 and
that the commission determines has carbon dioxide emissions
benefits or will significantly reduce other regulated air
emissions.
Sec. 49. (1) This section applies only to an electric provider
whose
rates are regulated by the commission. Concurrent with the
submission
of each report under section 51, the The commission
shall commence an annual proceeding, to be known as a renewable
cost reconciliation, for each electric provider whose rates are
regulated by the commission. The renewable cost reconciliation
proceeding shall be conducted as a contested case pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328. Reasonable discovery shall be permitted before and during
the reconciliation proceeding to assist in obtaining evidence
concerning reconciliation issues including, but not limited to, the
reasonableness and prudence of expenditures and the amounts
collected pursuant to the revenue recovery mechanism.
(2) At the renewable cost reconciliation, an electric provider
may propose any necessary modifications of the revenue recovery
mechanism to ensure the electric provider's recovery of its
incremental cost of compliance with the renewable energy standards.
(3) The commission shall reconcile the pertinent revenues
recorded and the allowance for the nonvolumetric revenue recovery
mechanism with the amounts actually expensed and projected
according to the electric provider's renewable energy plan. for
compliance. The commission shall consider any issue regarding the
reasonableness and prudence of expenses for which customers were
charged in the relevant reconciliation period. In its order, the
commission shall do all of the following:
(a) Make a determination of an electric provider's compliance
with the renewable energy standards.,
subject to section 31.
(b) Adjust the revenue recovery mechanism for the incremental
costs of compliance. The commission shall ensure that the retail
rate impacts under this renewable cost reconciliation revenue
recovery mechanism do not exceed the maximum retail rate impacts
specified under section 45. The commission shall ensure that the
recovery mechanism is projected to maintain a minimum balance of
accumulated reserve so that a regulatory asset does not accrue.
(c) Establish the price per megawatt hour for renewable energy
and advanced cleaner energy capacity and for renewable energy and
advanced cleaner energy to be recovered through the power supply
cost recovery clause under section 6j of 1939 PA 3, MCL 460.6j, as
outlined in section 47(2)(b)(iv).
(d) Adjust, if needed, the minimum balance of accumulated
reserve funds established under section 21.described in subdivision
(b).
(4) If an electric provider has recorded a regulatory
liability in any given month during the 20-year period beginning
when
the electric provider's renewable
energy plan is was approved
by the commission, interest on the regulatory liability balance
shall be accrued at the average short-term borrowing rate available
to the electric provider during the appropriate period, and shall
be used to fund incremental costs of compliance incurred in
subsequent periods within the 20-year period beginning when the
electric
provider's plan is was approved by the commission.
(5) As used in this section, "advanced cleaner energy" means
that term as defined in section 47.
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 amount of electricity
attributable to the customer that will be renewable energy. If the
electric provider's rates are regulated by the commission, 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 shall accrue any additional savings
realized by the electric provider as a result of the customer's
participation 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 surcharges for incremental costs of compliance.
(b) Before entering into an agreement 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 for the incremental
costs of compliance and for participation in 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
member-regulation act, 2008 PA 167, MCL 460.31 to
460.39,
or a municipally-owned 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 help the provider's customers reduce
energy waste and to reduce the future costs of provider service to
customers.
In particular, an EO electric
provider's 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), including
specifying whether the charges to recover costs under section 89(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
optimization
waste reduction programs for that benefit that rate
class.
(e)
Demonstrate that the proposed energy optimization waste
reduction 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, including the flexibility to determine the relative
amount of effort to be devoted to each customer class based on the
specific characteristics of the provider's service territory. 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 are
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.
Sec.
73. (1) A provider's energy optimization waste reduction
plan shall be filed with, reviewed by, and approved or rejected by
the
commission. and enforced subject to the same procedures that
apply
to a renewable energy plan.For
a provider whose rates are
regulated by the commission, the plan shall be enforced by the
commission. For a provider whose rates are not regulated by the
commission, the plan shall be enforced as provided in section 99.
Notwithstanding any other provision of this subpart, the commission
shall allow municipally owned electric utilities to design and
administer energy waste reduction plans in a manner consistent with
the administrative changes approved in the commission's April 17,
2012 order in case nos. U-16688 to U-16728 and U-17008.
(2) The commission shall not approve a proposed energy
optimization
waste reduction plan unless the commission determines
that
the EO energy waste
reduction plan meets the utility system
resource cost test and, subject to section 78, 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 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. For a provider whose rates are regulated by the
commission, 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) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
(6) After December 31, 2020, this section does not apply to an
electric provider whose rates are not regulated by the commission.
Sec.
75. 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% 20% of the net cost reductions experienced by the
provider's customers as a result of implementation of the energy
optimization plan.
(b)
15% percent 25% of the provider's actual energy efficiency
waste reduction program expenditures for the year.
Sec. 77. (1) Except as provided in section 81 and subject to
the
sales revenue expenditure limits in section 89, section 97, 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 incremental energy savings in 2012, 2013, 2014, and
2015
and, subject to section 97, each year thereafter incremental
energy savings each year through 2020 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 actual
expenditures under section 89
for implementing its approved energy waste reduction plan 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 section 97,
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 waste
reduction
programs consistent with the provider's
energy efficiency
waste reduction plan. The energy savings expected to be achieved
shall be determined using a savings database or other savings
measurement approach as determined reasonable by the commission.
(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, October
6, 2008, load management
that reduces overall energy usage, or a combination thereof for
energy
optimization waste
reduction credits otherwise required to
meet
the energy optimization performance waste reduction 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 waste reduction standard. Substitutions for
energy optimization waste reduction credits shall be made at the
following rates rate of 1 renewable energy credit per energy
optimization waste reduction 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.
Sec. 78. (1) By January 1, 2021, and every 2 years thereafter,
an electric provider whose rates are regulated by the commission
shall file with the commission under section 73 an energy waste
reduction plan amendment detailing the amount of energy waste
reduction it proposes to achieve for the succeeding 2-year period.
If the electric provider whose rates are regulated by the
commission proposes a level of energy waste reduction that is
higher than the level specified in the provider's current energy
waste reduction plan, the commission may approve the proposed
higher level if the commission finds that it is the most reasonable
and prudent. If the electric provider whose rates are regulated by
the commission proposes a level of energy waste reduction that is
lower than the level specified in the provider's current energy
waste reduction plan, the commission may approve the proposed lower
level if the commission finds that it is the most reasonable and
prudent. If the commission finds that the proposed lower level of
energy waste reduction is not the most reasonable and prudent, the
level of energy waste reduction to be achieved by the electric
provider whose rates are regulated by the commission for the
succeeding 2-year period under the energy waste reduction plan
shall be the same as the level specified in the provider's current
energy waste reduction plan.
(2) If over a 2-year period an electric provider whose rates
are regulated by the commission cannot achieve the level of energy
waste reduction provided for in the energy waste reduction plan
pursuant to subsection (1) in a cost-effective manner, the provider
may petition the commission in a contested case hearing under
section 73 to establish an alternative energy waste reduction level
for that provider.
(3) 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 an alternative energy waste reduction standard for that
provider.
(4) A petition filed pursuant to subsection (3) shall do all
of the following:
(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 standard to be
achieved by the natural gas provider.
(5) If, based on a review of the petition filed under
subsection (3), 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.
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 is repealed effective January 1, 2021.
Sec.
83. (1) One energy optimization waste
reduction credit
shall be granted to a 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
performance waste reduction standard.
(b) When substituted for a renewable energy credit under
section
27.28.
(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
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 27.28.
(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 27.28.
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.
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 waste
reduction credit substituted for a renewable energy credit under
section
27 28 or carried forward under section 83 is properly
accounted for.
(c) If the system is established by the commission, allowance
for
issuance and use of energy optimization waste reduction credits
in electronic form.
(2) One energy waste reduction credit shall be granted to an
electric provider for each megawatt hour of annual incremental
energy savings achieved through energy waste reduction.
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 by an electric provider 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 as specified in
the energy waste
reduction plan. Fixed, per-meter charges under this subsection may
vary by rate class. Charges under this subsection may be itemized
on utility bills but shall not be itemized on or after January 1,
2021.
(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.
(3) (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.
(4) (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.
(5) (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. However, a natural gas
provider that implements revenue decoupling under section 6a of
1939 PA 3, MCL 460.6a, shall not also implement revenue decoupling
under this section.
(7)
A natural gas provider or an electric provider shall not
spend
more than the following percentage 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:
(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.
Sec.
91. (1) Except for section 89(6), 89(5), sections 71 to
89
do not apply to a provider that pays the following percentage
each year pays 2.0% of total utility sales revenues for the second
year preceding, 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.
(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 may be
itemized on utility bills, but shall not be itemized on or after
January 1, 2021.
(4)
An A provider's 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.
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
Senate Bill No. 438 as amended November 10, 2016
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).
Sec.
95. (1) The Subject to
subsection (2), the commission
shall do all of the following:
(a) Promote load management in appropriate circumstances,
including expansion of existing and establishment of new load
management programs in which an electric provider may manage the
operation of energy consuming devices and remotely shut down air
conditioning or other energy intensive systems of participating
customers, demand response programs that use time of day pricing
and dynamic rate pricing, and similar programs, for utility
customers that have advanced metering infrastructure. Electric
provider participation and customer enrollment in such programs are
voluntary. However, electric providers <<whose rates are regulated by
the commission and>> whose rates include the cost
of advanced metering infrastructure shall offer commission-approved
demand response programs. The programs may provide incentives for
customer participation and shall include customer protection
provisions as required by the commission. To participate in a
program, a customer shall agree to remain in the program for at
least 1 year.
(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) Subsection (1) shall not be construed to prevent an
electric utility from doing any of the following:
(a) Recovering the full cost associated with providing
electric service and load management programs.
(b) Installing metering and retrieving metering data necessary
to properly, accurately, and efficiently bill for the electric
utility's services without manual intervention or manual
calculation.
(3) (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 6a of 1939 PA 3, MCL
460.6,
460.6a, 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.
(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.
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 municipally owned electric
utility shall submit a copy of the report to the governing body of
the
municipally-owned 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 credits that the
provider
generated 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) Concurrent with the submission of each report under
subsection
(1), a municipally-owned 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
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) a of
the senate and house of
representatives with primary responsibility for energy issues an
annual 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 Subject to subsection (6),
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) Subsection (5) does not apply to an electric provider on
or after January 1, 2021.
Sec. 99. The attorney general or any customer of a municipally
owned electric utility or a cooperative electric utility that is
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 that municipally owned electric
utility or cooperative electric utility if the municipally owned
electric utility or cooperative electric utility fails to meet the
applicable requirements of this subpart or an order issued or rule
promulgated under this subpart. The attorney general or customer
shall commence an action under this subsection in the circuit court
for the circuit in which the principal office of the municipally
owned electric utility or cooperative electric utility is located.
The attorney general or customer shall not file an action under
this subsection unless the attorney general or customer has given
the municipally owned electric utility or cooperative electric
utility at least 60 days' written notice of the intent to sue, the
basis for the suit, and the relief sought. Within 30 days after the
municipally owned electric utility or cooperative electric utility
receives written notice of the intent to sue, the municipally owned
electric utility or cooperative electric utility and the attorney
general or customer shall meet and make a good-faith attempt to
determine if there is a credible basis for the action. The
municipally owned electric utility or cooperative electric utility
shall take all reasonable and prudent steps necessary to comply
with the applicable requirements of this subpart or an order issued
or rule promulgated under this subpart within 90 days after the
meeting if there is a credible basis for the action. If the parties
do not agree as to whether there is a credible basis for the
action, the attorney general or customer may proceed to file the
suit.
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 act that added this
subsection, takes effect January 1, 2021.
PART 5.
NET
METERINGDISTRIBUTED
GENERATION
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 2016
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 whose rates are regulated by the commission and
alternative electric suppliers in this state.
(2)
Except as otherwise provided under this
part, customers an
electric
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 100% of
the customer's electricity
consumption for the previous 12 months. 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.
(3) (2)
An electric utility or alternative
electric supplier
is
not required to allow for net metering a distributed generation
program that is greater than 1% 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
limit under this subsection. The 1% limit under this
subsection shall be allocated as follows:
(a)
No more than 0.5% for customers with a system an eligible
electric generator capable of generating 20 kilowatts or less.
(b)
No more than 0.25% 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% for customers with a system methane
digester 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. compliant. 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 . Utility testing and approval of the
interconnection
and execution of a parallel operating agreement or
any applicable successor anti-islanding requirements determined by
the commission to be reasonable and consistent with the purposes of
this subdivision. 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. Both of the following
must
be completed prior to before
the equipment operating is
operated
in parallel with the distribution
system of the utility: .
(i) Utility testing and approval of the interconnection,
including all metering.
(ii) Execution of a parallel operating agreement.
(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 Distributed
generation customers with a
system capable of generating 20 kilowatts or less qualify for true
net metering.
(e) Net metering Distributed generation 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, including metering, 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 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.
(2) An electric utility serving over 1,000,000 customers in
this
state may provide its customers participating in the net
metering
distributed generation program, at no additional charge, 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
distributed generation 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.
(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. Notwithstanding any law or regulation,
net
metering distributed
generation 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
distributed generation 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, excluding transmission charges, of the full
retail rate during the billing period or time-of-use pricing
period.
(5) The grid usage charge established pursuant to section 6a
of 1939 PA 3, MCL 460.6a, shall not be reduced by any credit or
other ratemaking mechanism for distributed generation under this
section.
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.
Sec. 183. (1) A customer participating in a net metering
program approved by the commission before the effective date of
this section may elect to continue to receive service under the
terms and conditions of that program for up to 10 years from the
date of enrollment.
(2) Subsection (1) does not apply to an increase in the
generation capacity of the customer's eligible electric generator
beyond the capacity on the effective date of this section.
Sec. 185. Notwithstanding any other provision of this act,
this act does not limit or restrict an industrial customer's
ability to build, own, operate, or have a third party build, own,
and operate 1 or more self-generation or cogeneration facilities.
PART 7.
RESIDENTIAL ENERGY IMPROVEMENTS
Sec. 201. As used in this part:
(a) "Energy project" means the installation or modification of
an energy waste reduction improvement or the acquisition,
installation, or improvement of a renewable energy system.
(b) "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 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.
(c) "Home energy audit" means an evaluation of the energy
performance of a residential structure that meets all of the
following requirements:
(i) Is performed by a qualified person using building-
performance diagnostic equipment.
(ii) Complies with American National Standards Institute-
approved home energy audit standards.
(iii) Determines how best to optimize energy performance while
maintaining or improving human comfort, health, and safety and the
durability of the structure.
(iv) 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 whose rates
are regulated by the commission 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.
(3) This act does not limit the right of a provider to propose
a residential energy improvement program with elements that differ
from those required for a residential energy projects program under
this part or the authority of the commission to approve such a
residential energy improvement program as reasonable and prudent.
Sec. 205. (1) A residential energy projects program may only
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 fee is 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 that will be paid for through charges on
the utility bill under this part 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
Senate Bill No. 438 as amended November 10, 2016
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 projects 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.
(3) This act does not limit the right of a provider to propose
a residential energy improvement program with elements that differ
from those required for a residential energy projects program under
this part or the authority of the commission to approve such a
residential energy improvement program as reasonable and prudent.
<<Enacting section 1. Sections 21, 23, 25, 27, 31, 33, 37, 43,
Senate Bill No. 438 as amended November 10, 2016
51, 53, 79, and 155 of the clean, renewable, and efficient energy act,
2008 PA 295, MCL 460.1021, 460.1023, 460.1025, 460.1027, 460.1031,
460.1033, 460.1037, 460.1043, 460.1051, 460.1053, 460.1079, and
460.1155, 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.
Enacting section 3. This amendatory act does not take effect
unless Senate Bill No. 437 of the 98th Legislature is enacted into
law.
