Bill Text: MI HB5660 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Public utilities; other; scope of intervention for utility consumer participation board grants; modify. Amends secs. 6l & 6m of 1939 PA 3 (MCL 460.6l & 460.6m).

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2016-05-18 - Bill Electronically Reproduced 05/17/2016 [HB5660 Detail]

Download: Michigan-2015-HB5660-Introduced.html

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HOUSE BILL No. 5660

May 17, 2016, Introduced by Reps. Price, Howrylak and McBroom 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

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 6l and 6m (MCL 460.6l and 460.6m), section 6l

 

as amended by 2000 PA 141 and section 6m as amended by 2014 PA 170.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 6l. (1) For purposes of implementing sections 6a, 6h, 6i,

 

6j, and 6k, and 6s, this section and section 6m shall provide 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) and (b) 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) (c) "Department" means the department of management and

 

budget.licensing and regulatory affairs.

 

     (e) (d) "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 sections 6h, 6i, 6j, or

 

6k, to set gas cost recovery factors pursuant to under section

 

6h(17), or to set power supply cost recovery factors pursuant to

 

under section 6j(18).

 

     (f) (e) "Energy utility" means each electric or gas company

 

regulated by the public service commission.

 

     (g) (f) "Fund" means the utility consumer representation fund

 

created in section 6m.

 

     (h) (g) "Household" means a single-family home, duplex, mobile

 

home, seasonal dwelling, farm home, cooperative, condominium, or

 

apartment which 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) (h) "Jurisdictional" means subject to rate regulation by

 

the Michigan public service commission.

 

     (j) (i) "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) (j) "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) (k) "Residential tariff sales" means those sales by an

 

energy utility which that are subject to residential tariffs on

 

file with the commission.

 

     (m) (l) "Utility consuming industry" means a person, sole

 

proprietorship, partnership, association, corporation, or other

 

entity which 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 commission board shall be performed

 

under the direction and supervision of the department. The board

 

shall consist of 5 members appointed by the governor, 1 of whom

 

shall 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 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 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 which that received over $1,500.00 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 which

 

represents such an organization.

 

     (c) Shall not have, or shall not have had within 1 year

 

preceding appointment, a financial interest exceeding $1,500.00 in

 

a utility, an association representing utilities, or an enterprise

 

or professional practice which received over $1,500.00 in the year

 

preceding the appointment as a supplier of goods or services to a

 

utility or association representing utilities.

 

     (d) Shall not 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 a person

 

an individual who would be ineligible under subdivisions

 

subdivision (a), (b), (c), or (d).

 

     (6) The members of the board shall 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 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 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, a person an individual who is removed due

 

to absenteeism is eligible for reappointment to fill a vacancy

 

which 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 which the board may perform shall be

 

conducted at a public meeting of the board held in compliance with

 

the open meetings act, Act No. 267 of the Public Acts of 1976,

 

being sections 15.261 to 15.275 of the Michigan Compiled Laws. 1976

 

PA 267, MCL 15.261 to 15.275. Public notice of the time, date, and

 

place of the meeting shall be given in the manner required by Act

 

No. 267 of the Public Acts of 1976.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 be made available to the public in compliance with the

 

freedom of information act, Act No. 442 of the Public Acts of 1976,

 

being sections 15.231 to 15.246 of the Michigan Compiled Laws.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 per meeting attended, not to exceed $1,000.00 in a

 

calendar year. These limits shall be adjusted proportionately to an

 

adjustment in the remittance amounts under section 6m(4) to allow

 

for changes in the cost of living.

 

     (13) Until the board certifies that it is operating and ready

 

to perform all duties under this act, the director of the energy

 

administration created by executive directives 1976-2 and 1976-5

 

shall serve as temporary administrator of the fund and exercise all

 

duties and powers of the board.

 

     Sec. 6m. (1) The utility consumer representation fund is

 

created as a special fund. The state treasurer shall be the

 

custodian of the fund and shall maintain a separate account of the

 

money in the fund. The money in the fund shall 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 (6), each energy utility

 

that has applied to the public service 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, an amount that bears to

 

$300,000.00, multiplied by a factor as provided in subsection (4),

 

the same proportion as the company's jurisdictional 1981 total

 

operating revenues, as stated in its annual report, bear to the

 

jurisdictional 1981 total operating revenues of all energy utility

 

companies serving at least 100,000 customers in this state. This

 

amount shall be made available by the board for use by the attorney

 

general for the purposes described in subsection (17).

 

     (b) In the case of an energy utility company serving at least

 

100,000 residential customers in this state, an amount that bears

 

to $300,000.00, multiplied by a factor as provided in subsection

 

(4), the same proportion as the company's jurisdictional 1981 gross

 

revenues from residential tariff sales bear to the jurisdictional

 

1981 gross revenues from residential tariff sales of all energy

 

utility companies serving at least 100,000 residential customers in

 

this state. This amount shall be used for grants under subsection

 

(11).

 

     (3) Payments made by an energy utility under subsection (2)(a)

 

are operating expenses of the utility that the public service

 

commission shall permit the utility to charge to its customers.

 

Payments made by a utility under subsection (2)(b) are operating

 

expenses of the utility that the public service commission shall

 

permit the utility to charge to its residential customers.

 

     (4) For purposes of subsection (2), the factor shall be set by

 

the board at a level not to exceed the percentage increase in the

 

index known as the 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 Bureau of Labor Statistics of the United States

 

department of labor, Department of Labor, or any successor agency,

 

that has occurred between January 1981 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 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 board amounts equal to 5/6 of the

 

amounts required under subsection (2).

 

     (6) 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 not be used to participate in an energy

 

cost recovery proceeding primarily affecting such a utility.

 

     (7) 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 County 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) 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 or the director of the energy administration,

 

if section 6l(13) is applicable, that the board or the director 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) 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) 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 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 (11).

 

     (11) The net grant proceeds shall 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) 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 (17) that have been or are expected to be

 

filed. 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 (17) and (18) and that serve the interests of

 

residential utility consumers. For purposes of making grants, the

 

board may consider protection of the environment, energy

 

conservation, the creation of employment and a healthy economy in

 

the state, and 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) 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) 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.

 

     (c) The anticipated effect of the proposal contained in the

 

application on residential utility consumers, including the

 

immediate and long-term impacts of the proposal.

 

     (d) Evidence demonstrating the potential for continuity of

 

effort and the development of expertise in relation to the proposal

 

contained in the application.

 

     (e) The uniqueness or innovativeness of an applicant's

 

position or point of view, and the probability and desirability of

 

that position or point of view prevailing.

 

     (14) 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) 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) 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 contain a notice of the availability of the fund

 

and the address of the board.

 

     (17) 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, and 6k, and 6s, and in federal administrative and judicial

 

proceedings that directly affect the energy costs paid by Michigan

 

energy utilities. , and in cost allocation and rate design

 

proceedings initiated under section 11(3). Amounts that have been

 

in the fund more than 12 months may be retained in the fund for

 

future grants, 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 determines will best

 

serve the interests of consumers.

 

     (18) The following conditions shall apply to all grants from

 

the fund:

 

     (a) Disbursements from the fund may be used only to advocate

 

the interests of energy utility customers or classes of energy

 

utility customers, 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, to promote supplementation of effort, and to maximize

 

the number of hearings and proceedings with intervenor

 

participation.

 

     (19) A recipient of a grant under subsection (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) A recipient of a grant under subsection (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

 

be made in a form prescribed by the board and is subject to audit

 

by the board. The report shall include the following information:

 

     (a) An account of all grant expenditures made by the grant

 

recipient. Expenditures shall 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) Any additional information concerning uses of the grant

 

required by the board.

 

     (21) The attorney general shall file a report with the house

 

and senate committees on appropriations within 90 days following

 

the end of each fiscal year. The report shall include the following

 

information:

 

     (a) An account of all expenditures made by the attorney

 

general of funds money received under this section. Expenditures

 

shall 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 funds

 

money received under this section required by the committees.

 

     (22) On or before July 1 of each calendar year, the board

 

shall submit a detailed report to the legislature regarding the

 

discharge of duties and responsibilities under this section and

 

section 6l during the preceding calendar year.

 

     (23) By October 13, 1985, and at 3-year intervals 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 may recommend changes to the legislature.