HOUSE BILL No. 5190

 

November 30, 2011, Introduced by Rep. Horn 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 section 10d (MCL 460.10d), as amended by 2008 PA 286.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 10d. (1) 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 has

 

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) 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) 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 (5) is approval of approves a security recovery factor

 

under subsection (5), the covered utility may recover those

 

enhanced security costs.

 

     (4) The commission shall require that notice of the

 

application filed under subsection (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) 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 (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) No later than February 18, 2003, the commission shall by

 

order prescribe the form for the filing of an application for a

 

security recovery factor under subsection (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) Records or other information supplied by the covered

 

utility in an application for recovery of security costs under

 

subsection (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) The commission shall issue protective orders as are

 

necessary to protect the information found by the commission to be


 

confidential under this section.

 

     (9) A utility shall not charge a customer to help fund any

 

low-income and energy efficiency fund. The commission shall not

 

include a low-income and energy efficiency charge in an electric

 

utility's or natural gas utility's base rates. Subject to this

 

subsection, the commission shall refund all money being held in

 

escrow for the low-income and energy efficiency fund to the

 

customers from whom it was collected in the manner in which it was

 

collected. Before refunding the money to customers under this

 

subsection, the commission shall pay any entity the amount approved

 

by the commission for an energy efficiency grant if that entity

 

completed the energy efficiency project before the effective date

 

of the 2011 amendatory act that amended this section.

 

     (10) (9) 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 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.