HOUSE BILL No. 5524

 

December 4, 2007, Introduced by Reps. Accavitti, Angerer, Mayes, Hopgood, Gaffney, LaJoy and Hune and referred to the Committee on Energy and Technology.

 

     A bill to amend 1939 PA 3, entitled

 

"An act to provide for the regulation and control of public and

certain private utilities and other services affected with a public

interest within this state; to provide for alternative energy

suppliers; to provide for licensing; to include municipally owned

utilities and other providers of energy under certain provisions of

this act; to create a public service commission and to prescribe

and define its powers and duties; to abolish the Michigan public

utilities commission and to confer the powers and duties vested by

law on the public service commission; to provide for the

continuance, transfer, and completion of certain matters and

proceedings; to abolish automatic adjustment clauses; to prohibit

certain rate increases without notice and hearing; to qualify

residential energy conservation programs permitted under state law

for certain federal exemption; to create a fund; to provide for a

restructuring of the manner in which energy is provided in this

state; to encourage the utilization of resource recovery

facilities; to prohibit certain acts and practices of providers of

energy; to allow for the securitization of stranded costs; to

reduce rates; to provide for appeals; to provide appropriations; to

declare the effect and purpose of this act; to prescribe remedies

and penalties; and to repeal acts and parts of acts,"

 

by amending sections 10, 10a, 10b, 10c, 10d, 10e, 10g, 10p, 10r,

 

10x, and 10y (MCL 460.10, 460.10a, 460.10b, 460.10c, 460.10d,


 

460.10e, 460.10g, 460.10p, 460.10r, 460.10x, and 460.10y), sections

 

10, 10b, 10c, 10e, 10p, 10r, 10x, and 10y as added by 2000 PA 141,

 

section 10a as amended by 2004 PA 88, section 10d as amended by

 

2002 PA 609, and section 10g as amended by 2001 PA 48; and to

 

repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 10. (1) Sections 10 through 10bb shall be known and may

 

be cited as the "customer choice and electricity reliability act".

 

     (2) The purpose of sections 10a through 10bb is to do all of

 

the following:

 

     (a) To ensure that all retail customers in this state of

 

electric power have a choice of electric suppliers.

 

     (b) To allow and encourage the Michigan public service

 

commission to foster competition in this state in the provision of

 

electric supply and maintain regulation of electric supply for

 

customers who continue to choose supply from incumbent electric

 

utilities.

 

     (c) To encourage the development and construction of merchant

 

plants which will diversify the ownership of electric generation in

 

this state.

 

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

 

safe, reliable electric power at a reasonable rate.

 

     (e) To improve the opportunities for economic development in

 

this state and to promote financially healthy and competitive

 

utilities in this state.

 

     (3) Subsection (2) does not apply after December 31, 2003.

 

     (2) Within 90 days of the effective date of the amendatory act


 

that added this sentence, all customers of an electric utility

 

shall elect whether they wish to receive electric generation

 

service from an alternative electric supplier. All customers who

 

elect to receive service from an alternative electric supplier

 

shall, within 60 days of that election, certify with the commission

 

that they are in fact receiving service or have contracted to

 

receive service from an alternative electric supplier. A customer

 

who fails to certify will be treated as a returning customer under

 

subsection (3). A customer who does not elect to receive electric

 

generation service from an alternative electric supplier is

 

entitled to receive standard tariff service from the electric

 

utility and is no longer eligible to receive electric generation

 

service from an alternative electric supplier. A customer who

 

elects to receive electric generation service from an alternative

 

electric supplier shall, subject to this section, no longer have

 

the right to receive standard tariff service from the electric

 

utility. Any customer who becomes a customer after the effective

 

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

 

receive standard tariff service from an electric utility and is not

 

eligible to receive electric generation service from an alternative

 

electric supplier.

 

     (3) A customer who, pursuant to subsection (2), elects to

 

receive electric generation service from an alternative electric

 

supplier may subsequently provide notice to the electric utility of

 

the customer's desire to receive standard tariff service from the

 

electric utility. If an adequate and reliable amount of electricity

 

is reasonably available to the electric utility to serve the


 

returning load, that electric utility shall provide standard tariff

 

service to the customer within 90 days from the date of the

 

customer's notice. A customer returning to utility-supplied

 

generation service will be charged the standard tariff service rate

 

for generation service or the market price, whichever is higher,

 

for 1 year from the date of return before being eligible to receive

 

standard tariff service. Once a customer returns to utility-

 

supplied generation service, it is no longer eligible to receive

 

electric generation service from an alternative electric supplier.

 

     (4) A customer who is receiving electric generation service

 

from an alternative electric supplier on the effective date of the

 

amendatory act that added this sentence pursuant to a contract that

 

commenced prior to August 1, 2007 and that has a term that extends

 

more than 90 days after the effective date of the amendatory act

 

that added this sentence, may, within that period, notify the

 

electric utility of its election to receive standard tariff service

 

from the electric utility at the conclusion of the term of its

 

existing contract with the alternative electric supplier. If an

 

adequate and reliable amount of electricity is reasonably available

 

to the electric utility to serve the returning load, an electric

 

utility receiving that notice shall offer standard tariff service

 

to that customer subject to the provisions set forth in subsection

 

(2), effective upon the conclusion of the term of the customer's

 

existing contract with the alternative electric supplier. Once a

 

customer commences receipt of standard tariff service from the

 

utility, it is no longer eligible to receive electric generation

 

service from an alternative electric supplier.


 

     (5) Within 30 days of the effective date of the amendatory act

 

that added this subsection, the commission shall prepare and

 

provide to electric utilities a description of the election

 

available to customers under this section, including a description

 

of the consequences to the customer of the election. Each electric

 

utility shall provide the description prepared by the commission to

 

each customer. Any information provided by alternative electric

 

suppliers or electric utilities to influence a customer's election

 

under this section shall be consistent with the description

 

prepared by the commission.

 

     (6) As used in this section:

 

     (a) "Customer" means the building or facilities served through

 

a single existing electric billing meter and does not mean the

 

person, corporation, partnership, association, governmental body,

 

or other entity owning or having possession of the building or

 

facilities.

 

     (b) "Market price" means the prevailing price for electric

 

energy available in the regional wholesale market as determined by

 

the commission.

 

     (c) "Standard tariff service" means, for each regulated

 

electric utility, the retail rates, terms, and conditions of

 

service approved by the commission for service to customers who do

 

not elect to receive electric generation service from alternative

 

electric suppliers.

 

     Sec. 10a. (1) No later than January 1, 2002, the commission

 

shall issue orders establishing the rates, terms, and conditions of

 

service that allow all retail customers of an electric utility or


 

provider to choose an alternative electric supplier. The orders

 

shall provide for full recovery of a utility's net stranded costs

 

and implementation costs as determined by the commission.

 

     (1) (2) The commission shall issue orders establishing a

 

licensing procedure for all alternative electric suppliers. To

 

ensure adequate service to customers in this state, the commission

 

shall require that an alternative electric supplier maintain an

 

office within this state, shall assure that an alternative electric

 

supplier has the necessary financial, managerial, and technical

 

capabilities, shall require that an alternative electric supplier

 

maintain records which the commission considers necessary, and

 

shall ensure an alternative electric supplier's accessibility to

 

the commission, to consumers, and to electric utilities in this

 

state. The commission also shall require alternative electric

 

suppliers to agree that they will collect and remit to local units

 

of government all applicable users, sales, and use taxes. An

 

alternative electric supplier is not required to obtain any

 

certificate, license, or authorization from the commission other

 

than as required by this act.

 

     (2) (3) The commission shall issue orders to ensure that

 

customers in this state are not switched to another supplier or

 

billed for any services without the customer's consent.

 

     (3) The commission shall allow an electric utility that

 

provided retail open access service from 2002 through the effective

 

date of the amendatory act that added this sentence to recover its

 

restructuring costs and any associated accrued regulatory assets.

 

This includes, but is not limited to, implementation costs,


 

stranded costs, and costs authorized pursuant to section 10d(4) as

 

it existed prior to the effective date of the amendatory act that

 

added this sentence, that have been authorized for recovery by the

 

commission in orders issued prior to the effective date of the

 

amendatory act that added this sentence. The recovery shall be

 

accomplished through a continuation of the currently authorized

 

surcharges for those costs, except that the commission shall ensure

 

that recovery is completed no later than 60 months following the

 

effective date of the amendatory act that added this sentence.

 

     (4) No later than December 2, 2000, the commission shall

 

establish a code of conduct that shall apply to all electric

 

utilities. The code of conduct shall include, but is not limited

 

to, measures to prevent cross-subsidization, information sharing,

 

and preferential treatment, between a utility's regulated and

 

unregulated services, whether those services are provided by the

 

utility or the utility's affiliated entities. The code of conduct

 

established under this subsection shall also be applicable to

 

electric utilities and alternative electric suppliers consistent

 

with section 10, this section, and sections 10b through 10cc.

 

     (5) An electric utility may offer its customers an appliance

 

service program. Except as otherwise provided by this section, the

 

utility shall comply with the code of conduct established by the

 

commission under subsection (4). As used in this section,

 

"appliance service program" or "program" means a subscription

 

program for the repair and servicing of heating and cooling systems

 

or other appliances.

 

     (6) A utility offering a program under subsection (5) shall do


 

all of the following:

 

     (a) Locate within a separate department of the utility or

 

affiliate within the utility's corporate structure the personnel

 

responsible for the day-to-day management of the program.

 

     (b) Maintain separate books and records for the program,

 

access to which shall be made available to the commission upon

 

request.

 

     (c) Not promote or market the program through the use of

 

utility billing inserts, printed messages on the utility's billing

 

materials, or other promotional materials included with customers'

 

utility bills.

 

     (7) All costs directly attributable to an appliance service

 

program allowed under subsection (5) shall be allocated to the

 

program as required by this subsection. The direct and indirect

 

costs of employees, vehicles, equipment, office space, and other

 

facilities used in the appliance service program shall be allocated

 

to the program based upon the amount of use by the program as

 

compared to the total use of the employees, vehicles, equipment,

 

office space, and other facilities. The cost of the program shall

 

include administrative and general expense loading to be determined

 

in the same manner as the utility determines administrative and

 

general expense loading for all of the utility's regulated and

 

unregulated activities. A subsidy by a utility does not exist if

 

costs allocated as required by this subsection do not exceed the

 

revenue of the program.

 

     (8) A utility may include charges for its appliance service

 

program on its monthly billings to its customers if the utility


 

complies with all of the following requirements:

 

     (a) All costs associated with the billing process, including

 

the postage, envelopes, paper, and printing expenses, are allocated

 

as required under subsection (7).

 

     (b) A customer's regulated utility service is not terminated

 

for nonpayment of the appliance service program portion of the

 

bill.

 

     (c) Unless the customer directs otherwise in writing, a

 

partial payment by a customer is applied first to the bill for

 

regulated service.

 

     (9) In marketing its appliance service program to the public,

 

a utility shall do all of the following:

 

     (a) The list of customers receiving regulated service from the

 

utility shall be available to a provider of appliance repair

 

service upon request within 2 business days. The customer list

 

shall be provided in the same electronic format as such information

 

is provided to the appliance service program. A new customer shall

 

be added to the customer list within 1 business day of the date the

 

customer requested to turn on service.

 

     (b) Appropriately allocate costs as required under subsection

 

(7) when personnel employed at a utility's call center provide

 

appliance service program marketing information to a prospective

 

customer.

 

     (c) Prior to enrolling a customer into the program, the

 

utility shall inform the potential customer of all of the

 

following:

 

     (i) That appliance service programs may be available from


 

another provider.

 

     (ii) That the appliance service program is not regulated by the

 

commission.

 

     (iii) That a new customer shall have 10 days after enrollment to

 

cancel his or her appliance service program contract without

 

penalty.

 

     (iv) That the customer's regulated rates and conditions of

 

service provided by the utility are not affected by enrollment in

 

the program or by the decision of the customer to use the services

 

of another provider of appliance repair service.

 

     (d) The utility name and logo may be used to market the

 

appliance service program provided that the program is not marketed

 

in conjunction with a regulated service. To the extent that a

 

program utilizes the utility's name and logo in marketing the

 

program, the program shall include language on all material

 

indicating that the program is not regulated by the commission.

 

Costs shall not be allocated to the program for the use of the

 

utility's name or logo.

 

     (10) This section does not prohibit the commission from

 

requiring a utility to include revenues from an appliance service

 

program in establishing base rates. If the commission includes the

 

revenues of an appliance service program in determining a utility's

 

base rates, the commission shall also include all of the costs of

 

the program as determined under this section.

 

     (11) Except as otherwise provided in this section, the code of

 

conduct with respect to an appliance service program shall not

 

require a utility to form a separate affiliate or division to


 

operate an appliance service program, impose further restrictions

 

on the sharing of employees, vehicles, equipment, office space, and

 

other facilities, or require the utility to provide other providers

 

of appliance repair service with access to utility employees,

 

vehicles, equipment, office space, or other facilities.

 

     (12) The orders issued by the commission before June 5, 2000

 

that allow customers of an electric utility to choose an

 

alternative electric supplier, including orders that determine and

 

authorize recovery of net stranded costs and implementation costs

 

and that confirm any voluntary commitments of electric utilities,

 

are in compliance with this act and enforceable by the commission.

 

An electric utility that has not had voluntary commitments to

 

provide customer choice previously approved by orders of the

 

commission shall file a restructuring plan to allow customers to

 

choose an alternative electric supplier no later than the date

 

ordered by the commission. The plan shall propose a methodology to

 

determine the electric utility's net stranded costs and

 

implementation costs.

 

     (12) (13) This act does not prohibit or limit the right of a

 

person to obtain self-service power and does not impose a

 

transition, implementation, exit fee, or any other similar charge

 

on self-service power. A person using self-service power is not an

 

electric supplier, electric utility, or a person conducting an

 

electric utility business. As used in this subsection, "self-

 

service power" means any of the following:

 

     (a) Electricity generated and consumed at an industrial site

 

or contiguous industrial site or single commercial establishment or


 

single residence without the use of an electric utility's

 

transmission and distribution system.

 

     (b) Electricity generated primarily by the use of by-product

 

fuels, including waste water solids, which electricity is consumed

 

as part of a contiguous facility, with the use of an electric

 

utility's transmission and distribution system, but only if the

 

point or points of receipt of the power within the facility are not

 

greater than 3 miles distant from the point of generation.

 

     (c) A site or facility with load existing on June 5, 2000 that

 

is divided by an inland body of water or by a public highway, road,

 

or street but that otherwise meets this definition meets the

 

contiguous requirement of this subdivision regardless of whether

 

self-service power was being generated on June 5, 2000.

 

     (d) A commercial or industrial facility or single residence

 

that meets the requirements of subdivision (a) or (b) meets this

 

definition whether or not the generation facility is owned by an

 

entity different from the owner of the commercial or industrial

 

site or single residence.

 

     (13) (14) This act does not prohibit or limit the right of a

 

person to engage in affiliate wheeling and does not impose a

 

transition, implementation, exit fee, or any other similar charge

 

on a person engaged in affiliate wheeling. As used in this section:

 

     (a) "Affiliate" means a person or entity that directly, or

 

indirectly through 1 or more intermediates, controls, is controlled

 

by, or is under common control with another specified entity. As

 

used in this subdivision, "control" means, whether through an

 

ownership, beneficial, contractual, or equitable interest, the


 

possession, directly or indirectly, of the power to direct or to

 

cause the direction of the management or policies of a person or

 

entity or the ownership of at least 7% of an entity either directly

 

or indirectly.

 

     (b) "Affiliate wheeling" means a person's use of direct access

 

service where an electric utility delivers electricity generated at

 

a person's industrial site to that person or that person's

 

affiliate at a location, or general aggregated locations, within

 

this state that was either 1 of the following:

 

     (i) For at least 90 days during the period from January 1, 1996

 

to October 1, 1999, supplied by self-service power, but only to the

 

extent of the capacity reserved or load served by self-service

 

power during the period.

 

     (ii) Capable of being supplied by a person's cogeneration

 

capacity within this state that has had since January 1, 1996 a

 

rated capacity of 15 megawatts or less, was placed in service

 

before December 31, 1975, and has been in continuous service since

 

that date. A person engaging in affiliate wheeling is not an

 

electric supplier, an electric utility, or conducting an electric

 

utility business when a person engages in affiliate wheeling.

 

     (14) (15) The rights of parties to existing contracts and

 

agreements in effect as of January 1, 2000 between electric

 

utilities and qualifying facilities, including the right to have

 

the charges recovered from the customers of an electric utility, or

 

its successor, shall not be abrogated, increased, or diminished by

 

this act, nor shall the receipt of any proceeds of the

 

securitization bonds by an electric utility be a basis for any


 

regulatory disallowance. Further, any securitization or financing

 

order issued by the commission that relates to a qualifying

 

facility's power purchase contract shall fully consider that

 

qualifying facility's legal and financial interests.

 

     (16) The commission shall, after a contested case proceeding,

 

issue annually an order approving for each electric utility a true-

 

up adjustment to reconcile any overcollections or undercollections

 

of the preceding 12 months to ensure the recovery of all amounts of

 

net stranded costs. The rates for customers remaining with an

 

incumbent electric utility will not be affected by the true-up

 

process under this subsection. The commission shall review the

 

electric utility's stranded cost recovery charges and

 

securitization charges implemented for the preceding 12 months, and

 

adjust the stranded cost recovery charge, by way of supplemental

 

surcharges or credits, to allow the netting of stranded costs.

 

     (17) The commission shall consider the reasonableness and

 

appropriateness of various methods to determine net stranded costs,

 

including, but not limited to, all of the following:

 

     (a) Evaluating the relationship of market value to the net

 

book value of generation assets and purchased power contracts.

 

     (b) Evaluating net stranded costs based on the market price of

 

power in relation to prices assumed by the commission in prior

 

orders.

 

     (c) Any other method the commission considers appropriate.

 

     (18) The true-up adjustment adopted under subsection (16)

 

shall not result in a modification to the securitization charge.

 

The commission shall not adjust or change in any manner


 

securitization charges authorized by the commission in a financing

 

order issued under section 10i as a result of its review and any

 

action taken under subsection (16).

 

     (19) After the time period described in section 10d(2), the

 

rates for retail customers that remain with or leave and later

 

return to the incumbent electric utility shall be determined in the

 

same manner as the rates were determined before the effective date

 

of this section.

 

     Sec. 10b. (1) The commission shall establish rates, terms, and

 

conditions of electric service that promote and enhance the

 

development of new generation, transmission, and distribution

 

technologies.

 

     (2) No later than 1 year from the effective date of the

 

amendatory act that added this section June 5, 2000, each electric

 

utility shall file an application with the commission to unbundle

 

its existing commercial and industrial rate schedules and

 

separately identify and charge for their discrete services. No

 

earlier than 1 year from the effective date of the amendatory act

 

that added this section June 5, 2000, the commission may order the

 

electric utility to file an application to unbundle existing

 

residential rate schedules. The commission may allow the unbundled

 

rates to be expressed on residential billings in terms of

 

percentages in order to simplify residential billing. The

 

commission shall allow recovery by electric utilities of all just

 

and reasonable costs incurred by electric utilities to implement

 

and administer the provisions of this subsection.

 

     (3) The orders issued under this act shall include, but are


 

not limited to, the providing of reliable and lower cost

 

competitive rates for all customers in this state.

 

     (4) An electric utility is obligated, with commission

 

oversight, to provide standby generation service for open access

 

load on a best efforts basis until December 31, 2001 or the date

 

established under section 10d(2) as it existed prior to the

 

effective date of the amendatory act that added this sentence,

 

whichever is later. The pricing for the electric generation standby

 

service is equal to the retail market price of comparable standby

 

service allowed under subsection (5). An electric utility is not

 

required to interrupt firm off-system sales or firm service

 

customers to provide standby generation service. Until the date

 

established under section 10d(2) as it existed prior to the

 

effective date of the amendatory act that added this sentence,

 

standby generation service shall continue to be provided to nonopen

 

access customers under regulated tariffs.

 

     (5) The methodology for identifying the retail market price

 

for electric generation service to be applied under this section

 

shall be determined by the commission based upon market indices

 

commonly relied upon in the electric generation industry, adjusted

 

as appropriate to reflect retail market prices in the relevant

 

market.

 

     Sec. 10c. (1) Except for a violation under section 10a(3)

 

10a(2) and as otherwise provided under this section, upon a

 

complaint or on the commission's own motion, if the commission

 

finds, after notice and hearing, that an electric utility or an

 

alternative electric supplier has not complied with a provision or


 

order issued under sections 10 through 10bb, the commission shall

 

order such remedies and penalties as necessary to make whole a

 

customer or other person who has suffered damages as a result of

 

the violation, including, but not limited to, 1 or more of the

 

following:

 

     (a) Order the electric utility or alternative electric

 

supplier to pay a fine for the first offense of not less than

 

$1,000.00 or more than $20,000.00. For a second offense, the

 

commission shall order the person to pay a fine of not less than

 

$2,000.00 or more than $40,000.00. For a third and any subsequent

 

offense, the commission shall order the person to pay a fine of not

 

less than $5,000.00 or more than $50,000.00.

 

     (b) Order a refund to the customer of any excess charges.

 

     (c) Order any other remedies that would make whole a person

 

harmed, including, but not limited to, payment of reasonable

 

attorney fees.

 

     (d) Revoke the license of the alternative electric supplier if

 

the commission finds a pattern of violations.

 

     (e) Issue cease and desist orders.

 

     (2) Upon a complaint or the commission's own motion, the

 

commission may conduct a contested case to review allegations of a

 

violation under section 10a(3) 10a(2).

 

     (3) If the commission finds that a person has violated section

 

10a(3) 10a(2), the commission shall order remedies and penalties to

 

protect customers and other persons who have suffered damages as a

 

result of the violation, including, but not limited to, 1 or more

 

of the following:


 

     (a) Order the person to pay a fine for the first offense of

 

not less than $20,000.00 or more than $30,000.00. For a second and

 

any subsequent offense, the commission shall order the person to

 

pay a fine of not less than $30,000.00 or more than $50,000.00. If

 

the commission finds that the second or any of the subsequent

 

offenses were knowingly made in violation of section 10a(3) 10a(2),

 

the commission shall order the person to pay a fine of not more

 

than $70,000.00. Each unauthorized action made in violation of

 

section 10a(3) 10a(2) shall be a separate offense under this

 

subdivision.

 

     (b) Order an unauthorized supplier to refund to the customer

 

any amount greater than the customer would have paid to an

 

authorized supplier.

 

     (c) Order an unauthorized supplier to reimburse an authorized

 

supplier an amount equal to the amount paid by the customer that

 

should have been paid to the authorized supplier.

 

     (d) Order the refund of any amounts paid by the customer for

 

unauthorized services.

 

     (e) Order a portion between 10% to 50% of the fine ordered

 

under subdivision (a) be paid directly to the customer who suffered

 

the violation under section 10a(3) 10a(2).

 

     (f) If the person is licensed under this act, revoke the

 

license if the commission finds a pattern of violations of section

 

10a(3) 10a(2).

 

     (g) Issue cease and desist orders.

 

     (4) Notwithstanding subsection (3), a fine shall not be

 

imposed for a violation of section 10a(3) 10a(2) if the supplier


 

has otherwise fully complied with section 10a(3) 10a(2) and shows

 

that the violation was an unintentional and bona fide error which

 

occurred notwithstanding the maintenance of procedures reasonably

 

adopted to avoid the error. Examples of a bona fide error include

 

clerical, calculation, computer malfunction, programming, or

 

printing errors. An error in legal judgment with respect to a

 

supplier's obligations under section 10a(3) 10a(2) is not a bona

 

fide error. The burden of proving that a violation was an

 

unintentional and bona fide error is on the supplier.

 

     (5) If the commission finds that a party's position in a

 

complaint filed under subsection (2) is frivolous, the commission

 

shall award to the prevailing party their costs, including

 

reasonable attorney fees, against the nonprevailing party and their

 

attorney.

 

     Sec. 10d. (1) Except as otherwise provided under subsection

 

(3) or unless otherwise reduced by the commission under subsection

 

(5), the commission shall establish the residential rates for each

 

electric utility with 1,000,000 or more retail customers in this

 

state as of May 1, 2000 that will result in a 5% rate reduction

 

from the rates that were authorized or in effect on May 1, 2000.

 

Notwithstanding any other provision of law or commission order,

 

rates for each electric utility with 1,000,000 or more retail

 

customers established under this subsection become effective on

 

June 5, 2000 and remain in effect until December 31, 2003 and all

 

other electric retail rates of an electric utility with 1,000,000

 

or more retail customers authorized or in effect as of May 1, 2000

 

shall remain in effect until December 31, 2003.


 

     (2) On and after December 31, 2003, rates for an electric

 

utility with 1,000,000 or more retail customers in this state as of

 

May 1, 2000 shall not be increased until the earlier of December

 

31, 2013 or until the commission determines, after notice and

 

hearing, that the utility meets the market test under section 10f

 

and has completed the transmission expansion provided for in the

 

plan required under section 10v. The rates for commercial or

 

manufacturing customers of an electric utility with 1,000,000 or

 

more retail customers with annual peak demands of less than 15

 

kilowatts shall not be increased before January 1, 2005. There

 

shall be no cost shifting from customers with capped rates to

 

customers without capped rates as a result of this section. In no

 

event shall residential rates be increased before January 1, 2006

 

above the rates established under subsection (1).

 

     (3) Subsections (1) and (2) do not apply to rates or charges

 

authorized by the commission under subsection (13).

 

     (4) Beginning January 1, 2004, annual return of and on capital

 

expenditures in excess of depreciation levels incurred during and

 

before the time period described in subsection (2), and expenses

 

incurred as a result of changes in taxes, laws, or other state or

 

federal governmental actions incurred by electric utilities during

 

the period described in subsection (2), shall be accrued and

 

deferred for recovery. After notice and hearing, the commission

 

shall determine the amount of reasonable and prudent costs, if any,

 

to be recovered and the recovery period, which shall not exceed 5

 

years, and shall not commence until after the expiration of the

 

period described in subsection (2).


 

     (5) If the commission authorizes an electric utility to use

 

securitization financing under section 10i, any savings resulting

 

from securitization shall be used to reduce retail electric rates

 

from those authorized or in effect as of May 1, 2000 as required

 

under subsection (1). A rate reduction under this subsection shall

 

not be less than the 5% required under subsection (1). The

 

financing order may provide that a utility shall only issue

 

securitization bonds in an amount equal to or less than requested

 

by the utility, but the commission shall not preclude the issuance

 

of an amount of securitization bonds sufficient to fund the rate

 

reduction required under subsection (1).

 

     (6) Except for savings assigned to the low-income and energy

 

efficiency fund under subsection (7), securitization savings

 

greater than those used to achieve the 5% rate reduction under

 

subsection (1) shall be allocated by the commission to further rate

 

reductions or to reduce the level of any charges authorized by the

 

commission to recover an electric utility's stranded costs. The

 

commission shall allocate approved securitization, transition,

 

stranded, and other related charges and credits in a manner that

 

does not result in a reallocation of cost responsibility among the

 

different customer classes.

 

     (7) If securitization savings exceed the amount needed to

 

achieve a 5% rate reduction for all customers, then, for a period

 

of 6 years, 100% of the excess savings, up to 2% of the electric

 

utility's commercial and industrial revenues, shall be allocated to

 

the low-income and energy efficiency fund administered by the

 

commission. The commission shall establish standards for the use of


 

the fund to provide shut-off and other protection for low-income

 

customers and to promote energy efficiency by all customer classes.

 

The commission shall issue a report to the legislature and the

 

governor every 2 years regarding the effectiveness of the fund.

 

     (8) Except as provided under subsection (3), until the end of

 

the period described in subsection (2), the commission shall not

 

authorize any fees or charges that will cause the residential rate

 

reduction required under subsection (1) to be less than 5%.

 

     (1) (9) If an electric utility serving less than 1,000,000

 

retail customers in this state as of May 1, 2000 issues

 

securitization bonds as allowed under this act, it shall have the

 

same rights, duties, and obligations under this section as an

 

electric utility serving 1,000,000 or more retail customers in this

 

state as of May 1, 2000.

 

     (2) (10) The commission shall take the necessary steps to

 

ensure that all electrical power generating facilities in this

 

state comply with all rules, regulations, and standards of the

 

federal environmental protection agency regarding mercury

 

emissions.

 

     (3) (11) A covered utility may apply to the commission to

 

recover enhanced security costs for an electric generating facility

 

through a security recovery factor. If the commission action under

 

subsection (13) (5) is approval of a security recovery factor, the

 

covered utility may recover those enhanced security costs.

 

     (4) (12) The commission shall require that notice of the

 

application filed under subsection (11) (3) be published by the

 

covered utility within 30 days from the date the application was


 

filed. The initial hearing by the commission shall be held within

 

20 days of the date the notice was published in newspapers of

 

general circulation in the service territory of the covered

 

utility.

 

     (5) (13) The commission may issue an order approving,

 

rejecting, or modifying the security recovery factor. If the

 

commission issues an order approving a security recovery factor,

 

that order shall be issued within 120 days of the initial hearing

 

required under subsection (12) (4). In determining the security

 

recovery factor, the commission shall only include costs that the

 

commission determines are reasonable and prudent and that are

 

jurisdictionally assigned to retail customers of the covered

 

utility in this state. The costs included shall be net of any

 

proceeds that have been or will be received from another source,

 

including, but not limited to, any applicable insurance settlements

 

received by the covered utility or any grants or other emergency

 

relief from federal, state, or local governmental agencies for the

 

purpose of defraying enhanced security costs. In its order, the

 

commission shall designate a period for recovery of enhanced

 

security costs, including a reasonable return on the unamortized

 

balance, over a period not to exceed 5 years. The security recovery

 

factor shall not be less than zero.

 

     (6) (14) Within 60 days of the effective date of the

 

amendatory act that added this subsection December 20, 2002, the

 

commission shall by order prescribe the form for the filing of an

 

application for a security recovery factor under subsection (11)

 

(3). If the commission or its designee determines that a filing is


 

incomplete, it shall notify the covered utility within 10 days of

 

the filing.

 

     (7) (15) Records or other information supplied by the covered

 

utility in an application for recovery of security costs under

 

subsection (11) (3) that describe security measures, including, but

 

not limited to, emergency response plans, risk planning documents,

 

threat assessments, domestic preparedness strategies, and other

 

plans for responding to acts of terrorism are not subject to the

 

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246, and

 

shall be treated as confidential by the commission.

 

     (8) (16) The commission shall issue protective orders as are

 

necessary to protect the information found by the commission to be

 

confidential under this section.

 

     (9) (17) As used in this section:

 

     (a) "Act of terrorism" means a willful and deliberate act that

 

is all of the following:

 

     (i) An act that would be a violent felony under the laws of

 

this state, whether or not committed in this state.

 

     (ii) An act that the person knows or has reason to know is

 

dangerous to human life.

 

     (iii) An act that is intended to intimidate or coerce a civilian

 

population or influence or affect the conduct of government or a

 

unit of government through intimidation or coercion.

 

     (b) "Covered utility" means an electric utility subject to the

 

rate freeze provisions of subsection (1), the rate cap provisions

 

of subsection (2), with 1,000,000 or more retail customers in this

 

state as of May 1, 2000 or an electric utility subject to the rate


 

provisions of commission orders in case numbers U-11181-R and U-

 

12204.

 

     (c) "Enhanced security costs" means reasonable and prudent

 

costs of new and enhanced security measures incurred before January

 

1, 2006 for an electric generating facility by a covered utility

 

that are required by federal or state regulatory security

 

requirements issued after September 11, 2001 or determined to be

 

necessary by the commission to provide reasonable security from an

 

act of terrorism. Enhanced security costs include increases in the

 

cost of insurance that are attributable to an increased terror

 

related risk and the costs of maintaining or restoring electric

 

service as the result of an act of terrorism.

 

     (d) "Security recovery factor" means an unbundled charge for

 

all retail customers, except for customers of alternative electric

 

suppliers, to recover enhanced security costs that have been

 

approved by the commission.

 

     Sec. 10e. (1) An electric utility shall take all necessary

 

steps to ensure that merchant plants are connected to the

 

transmission and distribution systems within their operational

 

control. If the commission finds, after notice and hearing, that an

 

electric utility has prevented or unduly delayed the ability of the

 

plant to connect to the facilities of the utility, the commission

 

shall order remedies designed to make whole the merchant plant,

 

including, but not limited to, reasonable attorney fees. The

 

commission may also order fines of not more than $50,000.00 per day

 

that the electric utility is in violation of this subsection.

 

     (2) A merchant plant may sell its capacity to alternative


 

electric suppliers, electric utilities, municipal electric

 

utilities, retail customers, or other persons. A merchant plant

 

making sales to retail customers is an alternative electric

 

supplier and shall obtain a license under section 10a(2) 10a(1).

 

     (3) The commission shall establish standards for the

 

interconnection of merchant plants with the transmission and

 

distribution systems of electric utilities. The standards shall not

 

require an electric utility to interconnect with generating

 

facilities with a capacity of less than 100 kilowatts for parallel

 

operations. The standards shall be consistent with generally

 

accepted industry practices and guidelines and shall be established

 

to ensure the reliability of electric service and the safety of

 

customers, utility employees, and the general public. The merchant

 

plant will be responsible for all costs associated with the

 

interconnection unless the commission has otherwise allocated the

 

costs and provided for cost recovery.

 

     (4) This section does not apply to interconnections or

 

transactions that are subject to the jurisdiction of the federal

 

energy regulatory commission.

 

     Sec. 10g. (1) As used in sections 10 through 10bb:

 

     (a) "Alternative electric supplier" means a person selling

 

electric generation service to retail customers in this state.

 

Alternative electric supplier does not include a person who

 

physically delivers electricity directly to retail customers in

 

this state. An alternative electric supplier is not a public

 

utility.

 

     (b) "Commission" means the Michigan public service commission


 

in the department of consumer and industry services created in

 

section 1.

 

     (c) "Electric utility" means that term as defined in section 2

 

of the electric transmission line certification act, 1995 PA 30,

 

MCL 460.562.

 

     (d) "Merchant plant" means electric generating equipment and

 

associated facilities with a capacity of more than 100 kilowatts

 

located in this state that are not owned and operated by an

 

electric utility.

 

     (e) "Relevant market" means either the Upper Peninsula or the

 

Lower Peninsula of this state.

 

     (f) "Renewable energy source" means energy generated by solar,

 

wind, geothermal, biomass, including waste-to-energy and landfill

 

gas, or hydroelectric.

 

     (2) A school district aggregating electricity for school

 

properties or an exclusive aggregator for public or private school

 

properties is not an electric utility or a public utility for the

 

purpose of that aggregation.

 

     Sec. 10p. (1) Each electric utility operating in this state

 

shall establish an industry worker transition program that shall,

 

in consultation with employees or applicable collective bargaining

 

representatives, provide skills upgrades, apprenticeship and

 

training programs, voluntary separation packages consistent with

 

reasonable business practices, and job banks to coordinate and

 

assist placement of employees into comparable employment at no less

 

than the wage rates and substantially equivalent fringe benefits

 

received before the transition.


 

     (2) Stranded costs shall include audited and verified

 

employee-related restructuring costs that are incurred as a result

 

of the amendatory act that added this section or as a result of

 

prior commission restructuring orders, including employee severance

 

costs, employee retraining programs, early retirement programs,

 

outplacement programs, and similar costs and programs, that have

 

been approved and found to be prudently incurred by the commission.

 

     (2) (3) In the event of a sale, purchase, or any other

 

transfer of ownership of 1 or more Michigan divisions or business

 

units, or generating stations or generating units, of an electric

 

utility, to either a third party or a utility subsidiary, the

 

electric utility's contract and agreements with the acquiring

 

entity or persons shall require all of the following for a period

 

of at least 30 months:

 

     (a) That the acquiring entity or persons hire a sufficient

 

number of nonsupervisory employees to safely and reliably operate

 

and maintain the station, division, or unit by making offers of

 

employment to the nonsupervisory workforce of the electric

 

utility's division, business unit, generating station, or

 

generating unit.

 

     (b) That the acquiring entity or persons not employ

 

nonsupervisory employees from outside the electric utility's

 

workforce unless offers of employment have been made to all

 

qualified nonsupervisory employees of the acquired business unit or

 

facility.

 

     (c) That the acquiring entity or persons have a dispute

 

resolution mechanism culminating in a final and binding decision by


 

a neutral third party for resolving employee complaints or disputes

 

over wages, fringe benefits, and working conditions.

 

     (d) That the acquiring entity or persons offer employment at

 

no less than the wage rates and substantially equivalent fringe

 

benefits and terms and conditions of employment that are in effect

 

at the time of transfer of ownership of the division, business

 

unit, generating station, or generating unit. The wage rates and

 

substantially equivalent fringe benefits and terms and conditions

 

of employment shall continue for at least 30 months from the time

 

of the transfer of ownership unless the employees, or where

 

applicable collective bargaining representative, and the new

 

employer mutually agree to different terms and conditions of

 

employment within that 30-month period.

 

     (3) (4) The electric utility shall offer a transition plan to

 

those employees who are not offered jobs by the entity because the

 

entity has a need for fewer workers. If there is litigation

 

concerning the sale, or other transfer of ownership of the electric

 

utility's divisions, business units, generating stations, or

 

generating units, the 30-month period under subsection (3) will

 

begin (2) begins on the date the acquiring entity or persons take

 

control or management of the divisions, business units, generating

 

stations, or generating units of the electric utility.

 

     (4) (5) The commission shall adopt generally applicable

 

service quality and reliability standards for the transmission and

 

distribution systems of electric utilities and other entities

 

subject to its jurisdiction, including, but not limited to,

 

standards for service outages, distribution facility upgrades,


 

repairs and maintenance, telephone service, billing service,

 

operational reliability, and public and worker safety. In setting

 

service quality and reliability standards, the commission shall

 

consider safety, costs, local geography and weather, applicable

 

codes, national electric industry practices, sound engineering

 

judgment, and experience. The commission shall also include

 

provisions to upgrade the service quality of distribution circuits

 

that historically have experienced significantly below-average

 

performance in relationship to similar distribution circuits.

 

     (5) (6) Annually, each jurisdictional utility or entity shall

 

file its report with the commission detailing actions to be taken

 

to comply with the service quality and reliability standards during

 

the next calendar year and its performance in relation to the

 

service quality and reliability standards during the prior calendar

 

year. The annual reports shall contain that data as required by the

 

commission.

 

     (6) (7) The commission shall analyze the data to determine

 

whether the jurisdictional entities are properly operating and

 

maintaining their systems, assess the impact of deregulation on

 

reliability, and take corrective action if needed.

 

     (7) (8) The commission shall be is authorized to levy

 

financial incentives and penalties upon any jurisdictional entity

 

which exceeds or fails to meet the service quality and reliability

 

standards.

 

     Sec. 10r. (1) The commission shall establish minimum standards

 

for the form and content of all disclosures, explanations, or sales

 

information disseminated by a person selling electric service to


 

ensure that the person provides adequate, accurate, and

 

understandable information about the service that enables a

 

customer to make an informed decision relating to the source and

 

type of electric service purchased. The standards shall be

 

developed to do all of the following:

 

     (a) Not be unduly burdensome.

 

     (b) Not unnecessarily delay or inhibit the initiation and

 

development of competition for electric generation service in any

 

market.

 

     (c) Establish different requirements for disclosures,

 

explanations, or sales information relating to different services

 

or similar services to different classes of customers, whenever

 

such the different requirements are appropriate to carry out the

 

purposes of this section.

 

     (2) Before January 1, 2002, the commission shall establish a

 

funding mechanism for electric utilities and alternative electric

 

suppliers to carry out an educational program for customers to do

 

all of the following:

 

     (a) Inform customers of the changes in the provision of

 

electric service, including, but not limited to, the availability

 

of alternative electric suppliers.

 

     (b) Inform customers of the requirements relating to

 

disclosures, explanations, or sales information for alternative

 

electric suppliers.

 

     (c) Provide assistance to customers in understanding and using

 

the information to make reasonably informed choices about which

 

service to purchase and from whom to purchase it.


 

     (2) (3) The commission shall require that, starting January 1,

 

2002, all electric suppliers disclose in standardized, uniform

 

format on the customer's bill with a bill insert, on customer

 

contracts, or, for cooperatives, in periodicals issued by an

 

association of rural electric cooperatives, information about the

 

environmental characteristics of electricity products purchased by

 

the customer, including all of the following:

 

     (a) The average fuel mix, including categories for oil, gas,

 

coal, solar, hydroelectric, wind, biofuel, nuclear, solid waste

 

incineration, biomass, and other fuel sources. If a source fits

 

into the other category, the specific source must be disclosed. A

 

regional average, determined by the commission, may be used only

 

for that portion of the electricity purchased by the customer for

 

which the fuel mix cannot be discerned. For the purposes of this

 

subdivision, "biomass" means dedicated crops grown for energy

 

production and organic waste.

 

     (b) The average emissions, in pounds per megawatt hour, sulfur

 

dioxide, carbon dioxide, and oxides of nitrogen. An emissions

 

default, determined by the commission, may be used if the regional

 

average fuel mix is being disclosed.

 

     (c) The average of the high-level nuclear waste generated in

 

pounds per megawatt hour.

 

     (d) The regional average fuel mix and emissions profile as

 

referenced in subsection (3)(a) subdivisions (a), (b), and (c).

 

     (3) (4) The information required by subsection (3) (2) shall

 

be provided no more than twice annually, and be based on a rolling

 

annual average. Emissions factors will be based on annual publicly


 

available data by generation source.

 

     (4) (5) All of the information required to be provided under

 

subsection (1) shall also be provided to the commission to be

 

included on the commission's internet site.

 

     (5) (6) The commission shall establish the Michigan renewables

 

energy program. The program shall be designed to inform customers

 

in this state of the availability and value of using renewable

 

energy generation and the potential of reduced pollution. The

 

program shall also be designed to promote the use of existing

 

renewable energy sources and encourage the development of new

 

facilities.

 

     Sec. 10x. (1) The commission shall not require a cooperative

 

electric utility to provide its retail customers the ability to

 

choose an alternative electric supplier before January 1, 2005, nor

 

unbundle its rates as required under section 10b before July 1,

 

2004. Any retail customer of a cooperative with a peak load of 1

 

megawatt or greater shall be provided the opportunity to choose an

 

alternative electric supplier no later than January 1, 2002 as

 

provided in section 10.

 

     (2) The commission shall not require a cooperative electric

 

utility or an independent investor-owned utility with fewer than 60

 

employees to maintain separate facilities, operations, or

 

personnel, used to deliver electricity to retail customers, provide

 

retail electric service, or to be an alternative electric supplier.

 

     (3) Any debt service recovery charge, or other charge approved

 

by the commission for a cooperative electric utility serving

 

primarily at wholesale may, upon application by its member


 

cooperative or cooperatives, be assessed by and collected through

 

its member cooperative or cooperatives.

 

     (4) The commission shall not prohibit a cooperative electric

 

utility from metering and billing its customers for electric

 

services provided by the cooperative electric utility.

 

     (5) A cooperative electric utility shall not be required to

 

provide funding under section 10r(2) until July 1, 2004 or such

 

time as it is providing choice to all of its retail customers,

 

whichever is earlier.

 

     Sec. 10y. (1) The governing body of a municipally owned

 

utility shall determine whether it will permit retail customers

 

receiving delivery service from the municipally owned utility the

 

opportunity of choosing an alternative electric supplier, subject

 

to the implementation of rates, charges, terms, and conditions

 

referred to in subsection (7) (5).

 

     (2) Except with the written consent of the municipally owned

 

utility, a person shall not provide delivery service or customer

 

account service to a retail customer that was receiving that

 

service from a municipally owned utility as of the effective date

 

of the amendatory act that added this section June 5, 2000, or is

 

receiving the service from a municipally owned utility. and has the

 

opportunity to choose an alternative electric supplier under terms

 

consistent with this section. For purposes of this subsection,

 

"customer" means the building or facilities served rather than the

 

individual, association, partnership, corporation, governmental

 

body, or any other entity taking service.

 

     (3) After December 31, 2007, subsection (2) does not apply if


 

the governing body of the municipally owned utility does not permit

 

all of its retail customers receiving delivery service from the

 

municipally owned utility located outside of the boundaries of the

 

municipality that owns the utility the opportunity to choose an

 

alternative electric supplier.

 

     (4) If a municipally owned utility elects to provide electric

 

generation service to retail customers receiving delivery service

 

from an electric utility, all of the following apply:

 

     (a) The municipally owned utility shall provide all of its

 

retail customers receiving delivery service from the municipally

 

owned utility located outside of the boundaries of the municipality

 

that owns the utility the opportunity of choosing an alternative

 

electric supplier. The rates, charges, terms, and conditions of

 

delivery service for customers choosing an alternative electric

 

supplier shall be established by the governing body of the

 

municipally owned utility as provided under subsection (7).

 

     (b) If a municipally owned utility and an electric utility

 

both provide delivery service to retail customers in the same

 

municipality located outside of the boundaries of the municipality

 

that owns the municipal utility, then the municipally owned utility

 

shall do 1 of the following:

 

     (i) Make a filing as provided under subsection (5).

 

     (ii) Enter into a written agreement as provided under

 

subsection (6).

 

     (c) The municipally owned utility shall comply with orders

 

issued pursuant to sections 10a(3), 10q, 10r, and 10t with respect

 

to customers located outside of the municipality that owns the


 

municipally owned utility. Upon a complaint or on the commission's

 

own motion, if the commission finds, after notice and hearing, that

 

the municipally owned utility has not complied with a provision or

 

order issued under sections 10a(3), 10q, 10r, and 10t the

 

commission shall order such remedies and penalties as necessary to

 

make whole a customer or other person who has suffered damages as a

 

result of the violation, including, but not limited to, 1 or more

 

of the following:

 

     (i) Order the municipally owned utility to pay a fine of not

 

less than $1,000.00 or more than $20,000.00 for the first offense

 

and not less than $40,000.00 for a second and any subsequent

 

offense.

 

     (ii) Order a refund to the customer of any excess charges.

 

     (iii) Order any other remedies that would make whole a person

 

harmed, including, but not limited to, payment of reasonable

 

attorney fees.

 

     (iv) Revoke the license of the municipally owned utility if the

 

commission finds a pattern of violations.

 

     (v) Issue cease and desist orders.

 

     (d) The municipally owned utility may provide electric

 

generation service to serve electric retail customers receiving

 

delivery service from an electric utility up to an amount equal to

 

the municipally owned utility's retail customer load that has the

 

opportunity of choosing from an alternative electric supplier.

 

     (e) The municipally owned utility shall obtain a license under

 

section 10a(2). The commission shall issue a license unless it

 

determines that the municipally owned utility has adopted rates,


 

charges, terms, and conditions for delivery service that are unduly

 

discriminatory or reflect recovery of stranded costs in an amount

 

considered unjust and unreasonable by the commission. A municipally

 

owned utility operating under a license issued by the commission

 

shall notify the commission before modifying rates, charges, terms,

 

and conditions for delivery services. This subsection does not

 

grant the commission authority to set rates for a municipally owned

 

utility. The commission, after notice and opportunity for hearing,

 

may revoke a license issued to a municipally owned utility if it

 

determines that the municipally owned utility is not in compliance

 

with this subsection.

 

     (3) (5) With respect to any electric utility regarding

 

delivery service to customers located outside of the municipal

 

boundaries of the municipality that owns the utility, a governing

 

body of a municipally owned utility may elect to operate in

 

compliance with R 460.3411 of the Michigan administrative code, as

 

in effect on the effective date of the amendatory act that added

 

this section June 5, 2000. However, compliance with R 460.3411(13)

 

of the Michigan administrative code is not required for the

 

municipally owned utility. Concurrent with the filing of an

 

election under this subsection with the commission, the municipally

 

owned utility shall serve a copy of the election on the electric

 

utility. Beginning 30 days after service of the copy of the

 

election, the electric utility shall, as to the electing

 

municipally owned utility, be subject to the terms of R 460.3411 of

 

the Michigan administrative code as in effect on the effective date

 

of the amendatory act that added this section June 5, 2000. The


 

commission shall decide disputes arising under this subsection

 

subject to judicial review and enforcement.

 

     (4) (6) A municipally owned utility and an electric utility

 

that provides delivery service in the same municipality as the

 

municipally owned utility may enter into a written agreement to

 

define the territorial boundaries of each utility's delivery

 

service area and any other terms and conditions as necessary to

 

provide delivery service. The agreement is not effective unless

 

approved by the governing body of the municipally owned utility and

 

the commission. The governing body of the municipally owned utility

 

and the commission shall annually review and supervise compliance

 

with the terms of the agreement. At the request of a party to the

 

agreement, disputes arising under the agreement shall be decided by

 

the commission subject to judicial review and enforcement.

 

     (5) (7) If the governing body of a municipally owned utility

 

establishes a program to permit any of its customers the

 

opportunity to choose an alternative electric supplier, the

 

governing body of the municipally owned utility shall have

 

exclusive jurisdiction to do all of the following:

 

     (a) Set delivery service rates applicable to services provided

 

by the municipally owned utility that shall not be unduly

 

discriminatory.

 

     (b) Determine the amount and types of, and recovery mechanism

 

for, stranded and transition costs that will be charged.

 

     (c) Establish rules, terms of access, and conditions that it

 

considers appropriate for the implementation of a program to allow

 

customers the opportunity of choosing an alternative electric


 

supplier.

 

     (6) (8) Complaints alleging unduly discriminatory rates or

 

other noncompliance arising under subsection (7) (5) shall be filed

 

in the circuit court for the county in which the municipally owned

 

utility is located. Complaints arising under subsection (4) shall

 

be decided by the commission subject to judicial review and

 

enforcement.

 

     (7) (9) This section does not prevent or limit a municipally

 

owned utility from selling electricity at wholesale. A municipally

 

owned utility selling at wholesale is not considered to be an

 

alternative electric supplier and is not subject to regulation by

 

the commission.

 

     (10) If a municipally owned utility complies with subsection

 

(4)(a), (b), and (e) and is a member of a joint agency established

 

under the Michigan energy employment act of 1976, 1976 PA 448, MCL

 

460.801 to 460.848, it may with the consent of the joint agency

 

assign to the joint agency an amount of load up to the amount that

 

it is allowed to serve as an electric supplier under subsection

 

(4)(d), for the purpose of allowing the joint agency the

 

opportunity to sell retail electric generation as an electric

 

supplier, if the joint agency complies with sections 10a(3), 10q,

 

10r, and 10t and obtains a license under section 10a(2).

 

     (8) (11) This section shall not be construed to impair the

 

contractual rights of a municipally owned utility or customer under

 

an existing contract.

 

     (9) (12) Contracts or other records pertaining to the sale of

 

electricity by a municipally owned utility that are in the


 

possession of a public body and that contain specific pricing or

 

other confidential or proprietary information may be exempted from

 

public disclosure requirements by the governing body of a

 

municipally owned utility. Upon showing of good cause, disclosure

 

subject to appropriate confidentiality provisions may be ordered by

 

a court or the commission.

 

     (10) (13) This section does not affect the validity of the

 

order relating to the terms and conditions of service in the

 

Traverse City area that was issued August 25, 1994, by the

 

commission at the request of consumers power company and the light

 

and power board of the city of Traverse City.

 

     (11) (14) Except as otherwise provided under subsections

 

(4)(c), (4)(e), and (10), sections Sections 6l, 10 through 10x, and

 

10z through 10bb do not apply to a municipally owned utility.

 

     (12) (15) As used in this section:

 

     (a) "Delivery service" means the providing of electric

 

transmission or distribution to a retail customer.

 

     (b) "Municipality" means any city, village, or township.

 

     (c) "Customer account services" means billing and collection,

 

provision of a meter, meter maintenance and testing, meter reading,

 

and other administrative activity associated with maintaining a

 

customer account.

 

     (13) (16) In the event that an entity purchases 1 or more

 

divisions or business units, or generating stations or generating

 

units, of a municipal electric utility, the acquiring entity's

 

contract and agreements with the selling municipality shall require

 

all of the following for a period of at least 30 months:


 

     (a) That the acquiring entity or persons hires a sufficient

 

number of employees to safely and reliably operate and maintain the

 

station, division, or unit by first making offers of employment to

 

the workforce of the municipal electric utility's division,

 

business unit, or generating unit.

 

     (b) That the acquiring entity or persons not employ employees

 

from outside the municipal electric utility's workforce unless

 

offers of employment have been made to all qualified employees of

 

the acquired business unit or facility.

 

     (c) That the acquiring entity or persons have a dispute

 

resolution mechanism culminating in a final and binding decision by

 

a neutral third party for resolving employee complaints or disputes

 

over wages, fringe benefits, and working conditions.

 

     (d) That the acquiring entity or persons offer employment at

 

no less than the wage rates and substantially equivalent fringe

 

benefits and terms and conditions of employment that are in effect

 

at the time of transfer of ownership of the division, business

 

unit, generating station, or generating unit. The wage rates and

 

substantially equivalent fringe benefits and terms and conditions

 

of employment shall continue for at least 30 months from the time

 

of the transfer of ownership unless the employees, or where

 

applicable collective bargaining representative, and the new

 

employer mutually agree to different terms and conditions of the

 

employment within that 30-month period.

 

     (e) An acquiring entity is exempt from the obligations in this

 

subsection if the selling municipality transfers all displaced

 

municipal electric utility employees to positions of employment


 

within the municipality at no less than the wage rates and

 

substantially equivalent fringe benefits and terms and conditions

 

of employment that are in effect at the time of transfer. The wage

 

rates and substantially equivalent fringe benefits and terms and

 

conditions of employment shall continue for at least 30 months from

 

the time of the transfer unless the employees, or where applicable

 

collective bargaining representative, and the municipality mutually

 

agree to different terms and conditions of the employment within

 

that 30-month period.

 

     Enacting section 1. Section 10v of 1939 PA 3, MCL 460.10v, is

 

repealed.

 

     Enacting section 2. This amendatory act does not take effect

 

unless all of the following bills of the 94th Legislature are

 

enacted into law:

 

     (a) Senate Bill No.____ or House Bill No. 5521(request no.

 

04883'07 *).

 

     (b) Senate Bill No.____ or House Bill No. 5522(request no.

 

04884'07 *).

 

     (c) Senate Bill No.____ or House Bill No. 5520(request no.

 

04885'07 *).

 

     (d) Senate Bill No.____ or House Bill No. 5523(request no.

 

05023'07 *).

 

     (e) Senate Bill No.____ or House Bill No.____ (request no.

 

05570'07).

 

     (f) Senate Bill No.____ or House Bill No.____ (request no.

 

05919'07).

 

     (g) Senate Bill No.____ or House Bill No. 5525(request no.


 

05920'07).

 

     (h) House Bill No. 5383.

 

     (i) House Bill No. 5384.