SB-1502, As Passed House, December 1, 2010

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE SUBSTITUTE FOR

 

SENATE BILL NO. 1502

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2008 PA 295, entitled

 

"Clean, renewable, and efficient energy act,"

 

by amending section 93 (MCL 460.1093).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 93. (1) An eligible primary or secondary 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 plan as provided in this section.

 

     (2) Eligibility requirements for the exemption under

 

subsection (1) are as follows: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.

 

     (4) (3) The commission shall by order establish the rates,

 

terms, and conditions of service for customers related to this

 

subpart.

 

     (5) (4) The commission shall by order do all of the following:

 

     (a) Require a customer to utilize the services of an energy

 

optimization 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

 

energy optimization program under section 89.

 

     (6) (5) All of the following apply to a self-directed energy

 

optimization plan under subsection (1):

 

     (a) The self-directed plan shall be a multiyear plan for an

 

ongoing energy optimization program.

 

     (b) The self-directed plan shall provide for aggregate energy

 

savings that for each year meet or exceed the energy optimization

 

performance 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 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.

 

     (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) (6) A self-directed energy optimization plan shall be

 

incorporated into the relevant electric provider's energy

 

optimization plan. The self-directed plan and information submitted

 

by the customer under subsection (9) (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 programs for the

 

purposes of determining annual incremental energy savings achieved

 

by the provider under section 77 or 81, as applicable.

 

     (8) (7) 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 program charges under section 89 or

 

91 and is not eligible to participate in the relevant electric

 

provider's energy optimization programs.

 

     (9) (8) A customer implementing a self-directed energy

 

optimization plan under this section shall annually submit to the

 

customer's electric provider every 2 years a brief report

 

documenting the energy efficiency measures taken under the self-

 

directed plan during that 2-year period, 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. A customer shall promptly notify

 

the provider if the customer fails to achieve incremental energy

 

savings as set forth in its self-directed plan for a year that will

 

be the first year covered by the next biannual report. 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 or

 

notice under this subsection wishes to amend its self-directed

 

plan, the customer shall submit with the report or notice 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 service company,

 

the requirements of this subsection shall be met by the energy

 

optimization service company.

 

     (10) (9) An electric provider shall provide an annual report

 

to the commission that identifies customers implementing self-

 

directed energy optimization 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) (10) If the commission determines after a contested case

 

hearing that the minimum energy optimization goals under subsection

 

(5)(b) (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 goals under subsection (5)(b) (6)(b).

 

     (b) Multiply the figure under subdivision (a) by the energy

 

optimization 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 goals.

 

     (12) (11) If a customer has submitted a self-directed plan to

 

an electric provider, the customer, the customer's energy

 

optimization service company, if applicable, or the electric

 

provider shall provide a copy of the self-directed plan to the

 

commission upon request.

 

     (13) (12) By September 1, 2010, following a public hearing,

 

the commission shall establish an approval process for energy

 

optimization service companies. The approval process shall ensure

 

that energy optimization service companies have the expertise,

 

resources, and business practices to reliably provide energy

 

optimization 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 service companies. However, the approval

 

process shall also provide an opportunity for energy optimization

 

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 service companies shall require

 

adherence to a code of conduct governing the relationship between

 

energy optimization service companies and electric providers.

 

     (14) (13) The department of energy, labor, and economic growth

 

shall maintain on the department's website a list of energy

 

optimization service companies approved under subsection (12) (13).

 

     Enacting section 1. This amendatory act does not take effect

 

unless House Bill No. 5640 of the 95th Legislature is enacted into

 

law.