November 10, 2016, Introduced by Senator COLBECK 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 10a (MCL 460.10a), as amended by 2008 PA 286;
and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10a. (1) 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 do all of the
following:
(a)
Provide that no more than 10% of an electric utility's
average
weather-adjusted retail sales for the preceding calendar
year
may take service from an alternative electric supplier at any
time.
(b)
Set forth procedures necessary to administer and allocate
the
amount of load that will be allowed to be served by alternative
electric
suppliers, through the use of annual energy allotments
awarded
on a calendar year basis, and shall provide, among other
things,
that existing customers who are taking electric service
from
an alternative electric supplier at a facility on the
effective
date of the amendatory act that added this subdivision
shall
be given an allocated annual energy allotment for that
service
at that facility, that customers seeking to expand usage at
a
facility served through an alternative electric supplier will be
given
next priority, with the remaining available load, if any,
allocated
on a first-come first-served basis. The procedures shall
also
provide how customer facilities will be defined for the
purpose
of assigning the annual energy allotments to be allocated
under
this section. The commission shall not allocate additional
annual
energy allotments at any time when the total annual energy
allotments
for the utility's distribution service territory is
greater
than 10% of the utility's weather-adjusted retail sales in
the
calendar year preceding the date of allocation. If the sales of
a
utility are less in a subsequent year or if the energy usage of a
customer
receiving electric service from an alternative electric
supplier
exceeds its annual energy allotment for that facility,
that
customer shall not be forced to purchase electricity from a
utility,
but may purchase electricity from an alternative electric
supplier
for that facility during that calendar year.
(c)
Notwithstanding any other provision of this section,
customers
seeking to expand usage at a facility that has been
continuously
served through an alternative electric supplier since
April
1, 2008 shall be permitted to purchase electricity from an
alternative
electric supplier for both the existing and any
expanded
load at that facility as well as any new facility
constructed
or acquired after the effective date of the amendatory
act
that added this subdivision that is similar in nature if the
customer
owns more than 50% of the new facility.
(d)
Notwithstanding any other provision of this section, any
customer
operating an iron ore mining facility, iron ore processing
facility,
or both, located in the Upper Peninsula of this state,
shall
be permitted to purchase all or any portion of its
electricity
from an alternative electric supplier, regardless of
whether
the sales exceed 10% of the serving electric utility's
average
weather-adjusted retail sales.
(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 that 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.
(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.
(4)
No later than December 2, 2000, the 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 that
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 Before 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 has 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 if
the program is not
marketed
in conjunction with a regulated service. To the extent
that
If 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) 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) 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) 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.
(15) A customer who elects to receive 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. The procedures in place
for each electric utility as of January 1, 2008 that set forth the
terms
pursuant to under which a customer receiving service from an
alternative electric supplier may return to full service from the
electric utility are ratified and shall remain in effect and may be
amended by the commission as needed. If an electric utility did not
have the procedures in place as of January 1, 2008, the commission
shall adopt those procedures.
(16) The commission shall develop an energy service delivery
model that addresses all of the following:
(a) For each electric generating facility in this state:
(i) The owner of that facility.
(ii) The peak output of that facility.
(iii) The base output of that facility.
(iv) The type of energy produced by that facility.
(v) The operating expenses of that facility.
(vi) The capital expenses of that facility.
(vii) Whether the facility is owned by an electric utility,
cooperative electric utility, municipally owned electric utility,
alternative electric supplier, or other entity.
(viii) The reliability of that facility.
(b) For each electric distribution line in this state:
(i) The owner of that line.
(ii) The peak output of that line.
(iii) The base output of that line.
(iv) The operating expenses of that line.
(v) The capital expenses of that line.
(vi) Whether the line is owned by an electric utility,
cooperative electric utility, municipally owned electric utility,
or other entity.
(vii) The reliability of that line.
(c) For each substation in this state:
(i) The owner of that substation.
(ii) The peak output of that substation.
(iii) The base output of that substation.
(iv) The operating expenses of that substation.
(v) The capital expenses of that substation.
(vi) Whether the substation is owned by an electric utility,
cooperative electric utility, municipally owned electric utility,
or other entity.
(vii) The reliability of that substation.
(d) For each electric storage unit in this state:
(i) The owner of that storage unit.
(ii) The peak output of that storage unit.
(iii) The base output of that storage unit.
(iv) The operating expenses of that storage unit.
(v) The capital expenses of that storage unit.
(vi) Whether the storage unit is owned by an electric utility,
cooperative electric utility, municipally owned electric utility,
alternative electric supplier, or another entity.
(vii) The reliability of that storage unit.
(17) The commission shall develop an integrated resource plan
for each electric utility in this state. The commission shall
include both of the following in any integrated resource plan it
develops under this section:
(a) The power demand of that electric utility, including all
of the following:
(i) A consumer energy portfolio consisting of the type of
energy source that the customers of that electric utility prefer.
The commission shall allow customers to choose the type of energy
source from which the customer's electricity is generated. The
commission shall ensure that customers are annually given a list of
available types of electric generation and allowed to modify their
choice at least once per year.
(ii) Consumer rates, based on the total unsubsidized cost of
electricity. The commission shall determine the total unsubsidized
cost as the sum of the cost of electricity and the administrative
cost of the electric utility. Utility administrative costs shall
not exceed 10% of the cost of electricity. As used in this
subparagraph, "cost of electricity" means the operating costs plus
the amortized capitalization costs.
(iii) An aggregate demand model that includes a 5-year
estimate of consumer demand by source type.
(b) The power supply available to an electric utility,
including both of the following:
(i) An aggregate supply model that adds up all of the power
generation facilities by source type, breaks this down by peak
output and base output, and determines the difference between
supply and demand broken down by source type. The commission shall
create competitive bidding guidelines for the difference between
supply and demand that allows alternative energy suppliers to
competitively bid to supply that source type.
(ii) Reliability requirements for each supplier of
electricity. If the energy producer fails to meet these
requirements, it is subject to a fine of the amount that the entity
charges its consumers for that source type of energy times the
amount of time the supplier failed to meet the reliability
requirements.
(18)
(16) The commission shall authorize rates that will
ensure that an electric utility that offered retail open access
service
from 2002 through the effective date of the amendatory act
that
added this subsection October
6, 2008 fully recovers 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 under section
10d(4)
as it existed prior to the effective date of the amendatory
act
that added this subsection, before
October 6, 2008, that have
been authorized for recovery by the commission in orders issued
prior
to the effective date of the amendatory act that added this
subsection.
before October 6, 2008. The commission shall approve
surcharges
that will ensure full recovery of all such costs within
5
years of the effective date of the amendatory act that added this
subsection.by October 6, 2013.
(19) (17)
As used in subsections (1) and
(15):
(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) "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 generation service from alternative electric
suppliers.
(20) 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.
(c) "Appliance service program" or "program" means a
subscription program for the repair and servicing of heating and
cooling systems or other appliances.
Enacting section 1. Section 47 of the clean, renewable, and
efficient energy act, 2008 PA 295, MCL 460.1047, is repealed.