Bill Text: MI SB0476 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Energy; alternative sources; energy optimization standard; increase, and eliminate cap. Amends secs. 73, 75, 77 & 78 of 2008 PA 295 (MCL 460.1073 et seq.) & repeals sec. 81 of 2008 PA 295 (MCL 460.1081).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2017-06-21 - Referred To Committee On Energy And Technology [SB0476 Detail]

Download: Michigan-2017-SB0476-Introduced.html

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SENATE BILL No. 476

 

 

June 21, 2017, Introduced by Senators HOPGOOD, WARREN, CONYERS and GREGORY and referred to the Committee on Energy and Technology.

 

 

     A bill to amend 2008 PA 295, entitled

 

"Clean and renewable energy and energy waste reduction act,"

 

by amending sections 73, 75, 77, and 78 (MCL 460.1073, 460.1075,

 

460.1077, and 460.1078), sections 73, 75, and 77 as amended and

 

section 78 as added by 2016 PA 342; and to repeal acts and parts of

 

acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 73. (1) A provider's energy waste reduction plan shall be

 

filed with, reviewed by, and approved or rejected by the

 

commission. 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 waste

 

reduction plan unless the commission determines that the energy

 

waste reduction plan meets the utility system resource cost test

 

and , subject to section 78, is reasonable and prudent. In

 

determining whether the energy waste reduction plan is reasonable

 

and prudent, the commission shall review each element and consider

 

whether it would reduce the future cost of service for the

 

provider's customers. In addition, the commission shall consider at

 

least all of the following:

 

     (a) The specific changes in customers' consumption patterns

 

that the proposed energy waste reduction plan is attempting to

 

influence.

 

     (b) The cost and benefit analysis and other justification for

 

specific programs and measures included in a proposed energy waste

 

reduction plan.

 

     (c) Whether the proposed energy waste reduction plan is

 

consistent with any long-range resource plan filed by the provider

 

with the commission.

 

     (d) Whether the proposed energy waste reduction plan will

 

result in any unreasonable prejudice or disadvantage to any class

 

of customers.

 

     (e) The extent to which the energy waste reduction plan

provides programs that are available, affordable, and useful to all

 

customers.

 

     (3) Every 2 years after initial approval of an energy waste

 

reduction plan under subsection (2), the commission shall review

 

the plan. 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, 2021, this section does not apply to an

 

electric provider whose rates are not regulated by the commission.

 

     Sec. 75. (1) An energy 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 waste reduction standard. Payment of any financial incentive

authorized in the energy waste reduction plan is subject to the

 

approval of the commission.

 

     (2) The total amount of a financial incentive for an electric

 

provider that achieves annual incremental savings in any year

 

through 2021 of greater than 1.5% of its total annual retail

 

electricity sales in megawatt hours in the preceding year or annual

 

incremental savings in 2022 or any year thereafter of greater

 

than 2.5% of its total annual retail electricity sales in megawatt

 

hours in the preceding year or for a natural gas provider that

 

achieves annual incremental savings of greater than 1% of its total

 

annual retail natural gas sales in decatherms in the preceding year

 

shall not exceed the lesser of the following amounts:

 

     (a) 30% of the net present value of life-cycle cost reductions

 

experienced by the provider's customers as a result of

 

implementation, during the year for which the financial incentive

 

is paid, of the energy waste reduction plan.

 

     (b) 20% of the provider's actual energy waste reduction

 

program expenditures for the year.

 

     (3) The total amount of the financial incentive for an

 

electric provider that achieves annual incremental savings in any

 

year through 2021 of greater than 1.25% but not greater than 1.5%

 

of its total annual retail electricity sales in megawatt hours in

 

the preceding year or achieves annual incremental energy savings in

 

2022 or any year thereafter greater than 2.0% but not greater than

 

2.5% of its total annual retail electricity sales in megawatt hours

 

in the preceding year or for a natural gas provider that achieves

 

annual incremental savings of greater than 0.875% but not greater

than 1% of its total annual retail natural gas sales in decatherms

 

in the preceding year shall not exceed the lesser of the following

 

amounts:

 

     (a) 27.5% of the net present value of life-cycle cost

 

reductions experienced by the provider's customers as a result of

 

implementation, during the year for which the financial incentive

 

is paid, of the energy waste reduction plan.

 

     (b) 17.5% of the provider's actual energy waste reduction

 

program expenditures for the year.

 

     (4) The total amount of a financial incentive for an electric

 

provider that achieves annual incremental savings in any year

 

through 2021 of at least 1.0% but not greater than 1.25% of its

 

total annual retail electricity sales in megawatt hours in the

 

preceding year or achieves annual incremental energy savings in

 

2022 or any year thereafter greater than 1.5% but not greater than

 

2.0% of its total annual retail electricity sales in megawatt hours

 

in the preceding year or for a natural gas provider that achieves

 

annual incremental savings of at least 0.75% but not greater than

 

0.875% of its total annual retail natural gas sales in decatherms

 

in the preceding year shall not exceed the lesser of the following

 

amounts:

 

     (a) 25% of the net present value of life-cycle cost reductions

 

experienced by the provider's customers as a result of

 

implementation, during the year for which the financial incentive

 

is paid, of the energy waste reduction plan.

 

     (b) 15% of the provider's actual energy waste reduction

 

program expenditures for the year.

     Sec. 77. (1) Except as provided in section 81 and subject to

 

section 97, Subject to sections 78 and 97, an electric provider's

 

energy waste reduction programs under this subpart shall

 

collectively achieve incremental energy savings each as follows:

 

     (a) Each year through 2021, savings equivalent to 1.0% of

 

total annual retail electricity sales in megawatt hours in the

 

preceding year.

 

     (b) Each year after 2021, savings equivalent to 2.0% 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 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 actual expenditures for implementing its approved energy

 

waste reduction plan and the load management expenditures remains

 

constant.

 

     (3) Subject to section sections 78 and 97, a natural gas

 

provider's energy waste reduction program under this subpart shall

 

achieve annual incremental energy savings each year 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

 

a year shall be determined for a provider by adding the energy

 

savings expected to be achieved by energy waste reduction measures

 

implemented during that year under any energy waste reduction

 

programs consistent with the provider's energy 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 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 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 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 October 6, 2008, load management that reduces

 

overall energy usage, or a combination thereof for energy waste

 

reduction credits otherwise required to meet the energy 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.

 

     (7) Renewable 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 waste reduction

 

standard. Substitutions for energy waste reduction credits shall be

made at the rate of 1 renewable energy credit per energy waste

 

reduction credit.

 

     Sec. 78. (1) By January 1, 2022, and every 2 years thereafter,

 

an electric provider whose rates are regulated by the commission

 

shall file an energy waste reduction plan amendment with the

 

commission under section 73 pursuant to a filing schedule

 

established by the commission. The amendment shall detail the

 

amount of energy waste reduction the electric provider 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.

 

     (1) (3) If over a 2-year period an electric provider whose

 

rates are regulated by the commission or 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.

 

     (2) (4) A petition filed pursuant to subsection (3) (1) 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.

 

     (3) (5) If, based on a review of the petition filed under

 

subsection (3), (1), 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.

 

     Enacting section 1. Section 81 of the clean and renewable

energy and energy waste reduction act, 2008 PA 295, MCL 460.1081,

 

is repealed.

 

     Enacting section 2. This amendatory act takes effect 90 days

 

after the date it is enacted into law.