October 2, 2018, Introduced by Rep. Howrylak and referred to the Committee on Energy Policy.
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 powers and
duties of certain state governmental officers and entities; 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
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 6l and 6m (MCL 460.6l and 460.6m), as amended
by 2016 PA 341.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6l. (1) For purposes of implementing sections 6a, 6h, 6i,
6j, 6k, 6s, and 6t, this section and section 6m provide a means of
insuring equitable representation of the interests of energy
utility customers.
(2) As used in this section and section 6m:
(a) "Annual receipts" means the payments received by the fund
under section 6m(2)(a), (b), (c), and (d) during a calendar year.
(b) "Board" means the utility consumer participation board
created under subsection (3).
(c) "Commission" means the Michigan public service commission.
(d) "Department" means the department of licensing and
regulatory affairs.
(e) "Energy cost recovery proceeding" means any proceeding to
establish or implement a gas cost recovery clause or a power supply
cost recovery clause as provided in section 6h or 6j, to set gas
cost recovery factors under section 6h(17), or to set power supply
cost recovery factors under section 6j(18).
(f) "Energy utility" means each electric or gas company
regulated by the commission.
(g) "Fund" means the utility consumer representation fund
created in section 6m.
(h) "Household" means a single-family home, duplex, mobile
home, seasonal dwelling, farm home, cooperative, condominium, or
apartment that has normal household facilities such as a bathroom,
individual cooking facilities, and kitchen sink facilities.
Household does not include a penal or corrective institution, or a
motel, hotel, or other similar structure if used as a transient
dwelling.
(i) "Jurisdictional" means subject to rate regulation by the
commission.
(j) "Net grant proceeds" means the annual receipts of the fund
less the amounts reserved for the attorney general's use and the
amounts expended for board expenses and operation.
(k) "Residential energy utility consumer" or "consumer" means
a customer of an energy utility who receives utility service for
use within an individual household or an improvement reasonably
appurtenant to and normally associated with an individual
household.
(l) "Residential tariff sales" means those sales by an energy
utility that are subject to residential tariffs on file with the
commission.
(m) "Utility consuming industry" means a person, sole
proprietorship, partnership, association, corporation, or other
entity that receives utility service ordinarily and primarily for
use in connection with the manufacture, sale, or distribution of
goods or the provision of services, but does not include a
nonprofit organization representing residential utility customers.
(3) The utility consumer participation board is created within
the department and shall exercise its powers and duties under this
act independently of the department. The procurement and related
management
functions of the board shall must
be performed under the
direction
and supervision of the department. The board shall
consist
consists of 5 members appointed by the governor, 1 of whom
shall
must be chosen from 1 or more lists of qualified persons
submitted by the attorney general.
(4) For the purposes of subsection (5) only, "utility" means
an electric or gas company located in or outside of this state.
(5) Each member of the board shall meet the following
requirements:
(a)
Shall be Be an advocate for the interests of residential
utility consumers, as demonstrated by the member's knowledge of and
support for consumer interests and concerns in general or
specifically related to utility matters.
(b)
Shall not Not be, or shall not have been within the 5
years preceding appointment, a member of a governing body of, or
employed in a managerial or professional or consulting capacity by
a utility or an association representing utilities; an enterprise
or
professional practice that received over $1,500.00 $7,500.00 in
the year preceding the appointment as a supplier of goods or
services to a utility or association representing utilities; or an
organization representing employees of such a utility, association,
enterprise, or professional practice, or an association that
represents such an organization.
(c)
Shall not Not have, or shall not have had within 1 year
preceding
appointment, a financial interest exceeding $1,500.00
$7,500.00 in a utility, an association representing utilities, or
an
enterprise or professional practice that received over $1,500.00
$7,500.00 in the year preceding the appointment as a supplier of
goods or services to a utility or association representing
utilities.
(d)
Shall not Not be an officer or director of an applicant
for a grant under section 6m.
(e) Shall not be a member of the immediate family of an
individual who would be ineligible under subdivision (a), (b), (c),
or (d).
(6)
The members of the board shall must
be appointed for 2-
year terms beginning with the first day of a legislative session in
an odd-numbered year and ending on the day before the first day of
the legislative session in the next odd-numbered year or when the
members' successors are appointed, whichever occurs later. The
governor shall not appoint a member to the board for a term
commencing after the governor's term of office has ended. A vacancy
shall
must be filled in the same manner as the original
appointment. If the vacancy is created other than by expiration of
a
term, the member shall must
be appointed for the balance of the
unexpired term of the member to be succeeded.
(7) The governor shall remove a member of the board if that
member is absent for any reason from either 3 consecutive board
meetings or more than 50% of the meetings held by the board in a
calendar year. However, an individual who is removed due to
absenteeism is eligible for reappointment to fill a vacancy that
occurs in the board membership. The governor also shall remove a
member of the board if the member is subsequently determined to be
ineligible under subsection (5).
(8) The board shall hold bimonthly meetings and additional
meetings as necessary. A quorum consists of 3 members. A majority
vote of the members appointed and serving is necessary for a
decision. At its first meeting following the appointment of new
members, or as soon as possible after the first meeting, the board
shall elect biennially from its membership a chairperson and a
vice-chairperson.
(9) The board shall not act directly to represent the
interests of residential utility consumers except through
administration of the fund and grant program under this section.
(10)
The business that the board may perform shall must be
conducted at a public meeting of the board held in compliance with
the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public
notice
of the time, date, and place of the meeting shall must be
given in the manner required by the open meetings act, 1976 PA 267,
MCL 15.261 to 15.275.
(11) A writing prepared, owned, used, in the possession of, or
retained by the board in the performance of an official function
shall
must be made available to the public in compliance with
the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
(12) A member of the board may be reimbursed for actual and
necessary expenses, including travel expenses to and from each
meeting held by the board, incurred in discharging the member's
duties under this section and section 6m. In addition to expense
reimbursement, a board member may receive remuneration from the
board
of $100.00 up to $250.00 per meeting attended, not to exceed
$1,000.00
$10,000.00 in a calendar year. These limits shall must be
adjusted proportionately to an adjustment in the remittance amounts
under section 6m(4) to allow for changes in the cost of living.
Sec. 6m. (1) The utility consumer representation fund is
created
as a special fund. The state treasurer shall be is the
custodian of the fund and shall maintain a separate account of the
money
in the fund. The money in the fund shall must be invested in
the bonds, notes, and other evidences of indebtedness issued or
insured by the United States government and its agencies, and in
prime commercial paper. The state treasurer shall release money
from the fund, including interest earned, in the manner and at the
time directed by the board.
(2)
Except as provided in subsection (5), (6), each energy
utility that has applied to the commission for the initiation of an
energy cost recovery proceeding shall remit to the fund before or
upon filing its initial application for that proceeding, and on or
before the first anniversary of that application, an amount of
money determined by the board in the following manner:
(a) In the case of an energy utility company serving at least
100,000 customers in this state, its proportional share of
$900,000.00 adjusted annually by a factor as provided in subsection
(4).
This adjusted amount shall become becomes the new base amount
to which the factor provided in subsection (4) is applied in the
succeeding
year. A utility's proportional share shall must be
calculated by dividing the company's jurisdictional total operating
revenues for the preceding year, as stated in its annual report, by
the total operating revenues for the preceding year of all energy
utility companies serving at least 100,000 customers in this state.
This
amount shall must be made available by the board for use by
the attorney general for the purposes described in subsection
(16).(17).
(b) In the case of an energy utility company serving at least
100,000 residential customers in this state, its proportional share
of $650,000.00 adjusted annually by a factor as provided in
subsection
(4). This adjusted amount shall become becomes the new
base amount to which the factor provided in subsection (4) is
applied in the succeeding year. A utility's proportional share
shall
must be calculated by dividing the company's
jurisdictional
gross revenues from residential tariff sales for the preceding year
by the gross revenues from residential tariff sales for the
preceding year of all energy utility companies serving at least
100,000
residential customers in this state. This amount shall must
be
used for grants under subsection (10).(11).
(c) In the case of an energy utility company serving fewer
than 100,000 customers in this state, its proportional share of
$100,000.00 adjusted annually by a factor as provided in subsection
(4).
This adjusted amount shall become becomes the new base amount
to which the factor provided in subsection (4) is applied in the
succeeding
year. A utility's proportional share shall must be
calculated by dividing the company's jurisdictional total operating
revenues for the preceding year, as stated in its annual report, by
the total operating revenues for the preceding year of all energy
utility companies serving fewer than 100,000 customers in this
state.
This amount shall must be made available by the board for
use by the attorney general for the purposes described in
subsection
(16).(17).
(d) In the case of an energy utility company serving fewer
than 100,000 residential customers in this state, its proportional
share of $100,000.00 adjusted annually by a factor as provided in
subsection
(4). This adjusted amount shall become becomes the new
base amount to which the factor provided in subsection (4) is
applied in the succeeding year. A utility's proportional share
shall
must be calculated by dividing the company's jurisdictional
gross revenues from residential tariff sales for the preceding year
by the gross revenues from residential tariff sales for the
preceding year of all energy utility companies serving fewer than
100,000
residential customers in this state. This amount shall must
be
used for grants under subsection (10).(11).
(3) Payments made by an energy utility under subsection (2)(a)
or (c) are operating expenses of the utility that the commission
shall permit the utility to charge to its customers. Payments made
by a utility under subsection (2)(b) or (d) are operating expenses
of the utility that the commission shall permit the utility to
charge to its residential customers.
(4) For purposes of subsection (2), the board shall set the
factor at a level not to exceed the percentage increase in the
index
known as the consumer price index Consumer Price Index for
urban wage earners and clerical workers, select areas, all items
indexed, for the Detroit standard metropolitan statistical area,
compiled by the Bureau of Labor Statistics of the United States
Department of Labor, or any successor agency, that has occurred
between January of the preceding year and January of the year in
which the payment is required to be made. In the event that more
than 1 such index is compiled, the index yielding the largest
payment
shall be is the maximum allowable factor. The board shall
advise utilities of the factor.
(5) On or before the second and succeeding anniversaries of
its initial application for an energy cost recovery proceeding, an
energy utility shall remit to the fund amounts equal to 5/6 of the
amounts required under subsection (2).
(6)
(5) The remittance requirements of this section do not
apply to an energy utility organized as a cooperative corporation
under sections 98 to 109 of 1931 PA 327, MCL 450.98 to 450.109, and
grants
from the fund shall must not be used to participate in an
energy cost recovery proceeding primarily affecting such a utility.
(7) (6)
In the event of a dispute between
the board and an
energy utility about the amount of payment due, the utility shall
pay the undisputed amount and, if the utility and the board cannot
agree,
the board may initiate civil action in the circuit court for
Ingham
County court of claims for recovery of the disputed amount.
The commission shall not accept or take action on an application
for an energy cost recovery proceeding from an energy utility
subject to this section that has not fully paid undisputed
remittances required by this section.
(8) (7)
The commission shall not accept or
take action on an
application for an energy cost recovery proceeding from an energy
utility subject to this section until 30 days after it has been
notified by the board that the board is ready to process grant
applications, will transfer funds payable to the attorney general
immediately upon the receipt of those funds, and will within 30
days approve grants and remit funds to qualified grant applicants.
(9) (8)
The board may accept a gift or
grant from any source
to be deposited in the fund if the conditions or purposes of the
gift or grant are consistent with this section.
(10) (9)
The costs of operation and expenses
incurred by the
board in performing its duties under this section and section 6l,
including
remuneration to board members, shall must be paid from
the fund. A maximum of 5% of the annual receipts of the fund may be
budgeted and used to pay expenses other than grants made under
subsection
(10).(11).
(11) (10)
The net grant proceeds shall must finance
a grant
program from which the board may award to an applicant an amount
that the board determines shall be used for the purposes set forth
in this section.
(12) (11)
The board shall create and make
available to
applicants an application form. Each applicant shall indicate on
the application how the applicant meets the eligibility
requirements provided for in this section and how the applicant
proposes to use a grant from the fund to participate in 1 or more
proceedings
as authorized in subsection (16) (17) that have been or
are expected to be filed. Each applicant shall also identify on the
application any additional funds or resources, other than the grant
funds being requested, that are to be used to participate in the
proceeding for which the grant is being requested and how those
funds or resources will be utilized. The board shall receive an
application requesting a grant from the fund only from a nonprofit
organization or a unit of local government in this state. The board
shall consider only applications for grants containing proposals
that
are consistent with subsections (16) and (17) and (18)
and
that serve the interests of residential utility consumers. For
purposes of making grants, the board may consider energy
conservation, energy waste reduction, demand response, and rate
design options to encourage energy conservation, energy waste
reduction, and demand response, as well as the maintenance of
adequate energy resources. The board shall not consider an
application that primarily benefits the applicant or a service
provided or administered by the applicant. The board shall not
consider an application from a nonprofit organization if 1 of the
organization's principal interests or unifying principles is the
welfare of a utility or its investors or employees, or the welfare
of 1 or more businesses or industries, other than farms not owned
or operated by a corporation, that receive utility service
ordinarily and primarily for use in connection with the profit-
seeking manufacture, sale, or distribution of goods or services.
Mere ownership of securities by a nonprofit organization or its
members does not disqualify an application submitted by that
organization.
(13) (12)
The board shall encourage the
representation of the
interests of identifiable types of residential utility consumers
whose interests may differ, including various social and economic
classes and areas of the state, and if necessary, may make grants
to more than 1 applicant whose applications are related to a
similar issue to achieve this type of representation. In addition,
the board shall consider and balance the following criteria in
determining whether to make a grant to an applicant:
(a) Evidence of the applicant's competence, experience, and
commitment to advancing the interests of residential utility
consumers.
(b) The anticipated involvement of the attorney general in a
proceeding and whether activities of the applicant will be
duplicative or supplemental to those of the attorney general.
(c) In the case of a nongovernmental applicant, the extent to
which the applicant is representative of or has a previous history
of advocating the interests of citizens, especially residential
utility consumers.
(d) The anticipated effect of the proposal contained in the
application on residential utility consumers, including the
immediate and long-term impacts of the proposal.
(e) Evidence demonstrating the potential for continuity of
effort and the development of expertise in relation to the proposal
contained in the application.
(f) The uniqueness or innovativeness of an applicant's
position or point of view as it relates to advocating for
residential utility consumers concerning energy costs or rates, and
the probability and desirability of that position or point of view
prevailing.
(14) (13)
As an alternative to choosing
between 2 or more
applications that have similar proposals, the board may invite 2 or
more of the applicants to file jointly and award a grant to be
managed cooperatively.
(15) (14)
The board shall make disbursements
pursuant to a
grant in advance of an applicant's proposed actions as set forth in
the application if necessary to enable the applicant to initiate,
continue, or complete the proposed actions.
(16) (15)
Any notice to utility customers and
the general
public of hearings or other state proceedings in which grants from
the
fund may be used shall must
contain a notice of the
availability of the fund and the address of the board.
(17) (16)
The annual receipts and interest
earned, less
administrative costs, may be used only for participation in
administrative and judicial proceedings under sections 6a, 6h, 6i,
6j, 6k, 6s, and 6t, and in federal administrative and judicial
proceedings that directly affect the energy costs or rates paid by
energy utility customers in this state. Amounts that have been in
the fund more than 12 months may be retained in the fund for future
proceedings
and any unexpended money in the fund shall must be
reserved to fulfill the purposes for which it was appropriated or
may be returned to energy utility companies or used to offset their
future remittances in proportion to their previous remittances to
the
fund, as the board and attorney general determine determines
will best serve the interests of consumers.
(18) (17)
The following conditions apply to
all grants from
the fund:
(a) Disbursements from the fund may be used only to advocate
the
interests of residential energy utility customers concerning
energy costs or rates and not for representation of merely
individual interests.
(b) The board shall attempt to maintain a reasonable
relationship between the payments from a particular energy utility
and the benefits to consumers of that utility.
(c) The board shall coordinate the funded activities of grant
recipients with those of the attorney general to avoid duplication
of effort, particularly as it relates to the hiring of expert
witnesses, to promote supplementation of effort, and to maximize
the number of hearings and proceedings with intervenor
participation.
(19) (18)
A recipient of a grant under
subsection (10) (11)
may use the grant only for the advancement of the proposed action
approved by the board, including, but not limited to, costs of
staff, hired consultants and counsel, and research.
(20) (19)
A recipient of a grant under
subsection (10) (11)
shall prepare for and participate in all discussions among the
parties designed to facilitate settlement or narrowing of the
contested issues before a hearing in order to minimize litigation
costs for all parties.
(21) (20)
A recipient of a grant under
subsection (10) (11)
shall file a report with the board within 90 days following the end
of the year or a shorter period for which the grant is made. The
report
shall must be made in a form prescribed by the board and is
subject to audit by the board. The board shall include each report
received under this subsection as part of the board's annual report
required
under subsection (22). (23).
The report under this
subsection
shall must include the following information:
(a) An account of all grant expenditures made by the grant
recipient.
Expenditures shall must be reported within the following
categories:
(i) Employee and contract for services costs.
(ii) Costs of materials and supplies.
(iii) Filing fees and other costs required to effectively
represent residential utility consumers as provided in this
section.
(b) A detailed list of the regulatory issues raised by the
grant recipient and how each issue was determined by the
commission, court, or other tribunal.
(c) Any additional information concerning uses of the grant
required by the board.
(22) (21)
On or before July 1 of each year,
the attorney
general shall file a report with the house and senate committees on
appropriations and the house and senate committees with
jurisdiction over energy and utility policy issues. The report
shall
must include the following information:
(a) An account of all expenditures made by the attorney
general
of money received under this section. Expenditures shall
must be reported within the following categories:
(i) Employee and contract for services costs.
(ii) Costs of materials and supplies.
(iii) Filing fees and other costs required to effectively
represent utility consumers as provided in this section.
(b) Any additional information concerning uses of the money
received under this section required by the committees.
(23) (22)
On or before July 1 of each
calendar year, the board
shall submit a detailed report to the house and senate committees
with jurisdiction over energy and utility policy issues regarding
the discharge of duties and responsibilities under this section and
section 6l during the preceding calendar year.
(24) By September 30, 2019, and every 3 years thereafter, a
senate committee chosen by the majority leader of the senate and a
house committee chosen by the speaker of the house of
representatives shall review the relationship between costs and
benefits resulting from this section and sections 6h through 6l and
recommend changes to the legislature.