Bill Text: MI SB0166 | 2013-2014 | 97th Legislature | Introduced

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Bill Title: Public utilities; electric utilities; cap on electric choice; modify. Amends sec. 10a of 1939 PA 3 (MCL 460.10a).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2013-02-07 - Referred To Committee On Energy And Technology [SB0166 Detail]

Download: Michigan-2013-SB0166-Introduced.html

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SENATE BILL No. 166

 

 

February 7, 2013, Introduced by Senator MEEKHOF 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.

 

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 or a percentage determined by the commission under subdivision

 

(e) 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

 

October 6, 2008 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% the percentage set forth in subdivision (a) or the

 

percentage determined by the commission under subdivision (e) 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 October 6, 2008 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% the percentage set forth in

 

subdivision (a) or the percentage determined by the commission

 

under subdivision (e) of the serving electric utility's average

 

weather-adjusted retail sales.

 

     (e) The electric choice cap for an electric utility that has

 

implemented securitization charges authorized by the commission

 

shall be determined as follows:

 

     (i) Within 30 days of the effective date of the amendatory act

 

that added this subdivision, the commission shall, for the

 

remainder of that calendar year, set the electric choice cap to be

 

the greatest of the following:

 

     (A) 10%.

 

     (B) A percentage equal to the percentage of weather-adjusted

 

retail sales for the preceding calendar year allotted to customers

 

taking service from an alternative electric supplier on the

 

effective date of the amendatory act that added this subdivision

 

plus the percentage of weather-adjusted retail sales for the

 

preceding calendar year represented by additional customers

 

requesting service from an alternative electric supplier on the

 

effective date of the amendatory act that added this subdivision

 

but who have not received an allotment under this subsection. The

 

commission shall ensure that any customer requesting service from

 

an alternative electric supplier on or before the effective date of

 

the amendatory act that added this subdivision is allowed to

 

purchase electricity from an alternative electric supplier.

 

     (C) The highest percentage, determined on a calendar-year

 

basis for years 2000 through 2013, of weather-adjusted retail sales

 

for the preceding calendar year representing customers who took

 

service from an alternative electric supplier. The commission shall

 

ensure that any customer requesting service from an alternative

 

electric supplier on or before the effective date of the amendatory

 

act that added this subdivision is allowed to purchase electricity

 

from an alternative electric supplier.

 

     (ii) For each of the 3 calendar years following the calendar

 

year in which the amendatory act that added this subdivision takes

 

effect, the commission shall, at the beginning of each calendar

 

year, increase the electric choice cap for a utility subject to

 

this subdivision from its then current percentage by 6%. The

 

commission shall do each of the following:

 

     (A) Ensure that any and all savings by the utility, including,

 

but not limited to, fuel, power purchase costs, and increased

 

wholesale revenues, due to an increase in the retail sales

 

associated with customers taking service from an alternative

 

electric supplier are passed through to full-service customers

 

through the utility's power supply cost recovery proceedings.

 

     (B) In setting rates for the utility, recognize the effect of

 

an increase or decrease in the retail sales associated with

 

customers taking service from an alternative electric supplier,

 

either through a revenue decoupling mechanism or through a test

 

year used for setting rates that begins after the effective date of

 

the amendatory act that added this subdivision.

 

     (iii) On and after the beginning of the fourth calendar year

 

following the calendar year in which the amendatory act that added

 

this subdivision takes effect, if the electric choice cap has been

 

reached for an electric utility and the allotment of retail sales

 

represented by customers requesting service from an alternative

 

electric supplier who cannot be served under the existing electric

 

choice cap exceeds 2% of the electric utility's weather-adjusted

 

retail sales for the preceding calendar year, then the commission

 

shall, within 30 days, initiate a contested case to determine if

 

the electric choice cap should be increased. Within 180 days of the

 

initiation of the contested case, the commission shall issue an

 

order increasing an electric utility's electric choice cap by the

 

percentage of weather-adjusted retail sales represented by those

 

customers requesting service from an alternative electric supplier

 

plus 3% of the utility's weather-adjusted retail sales for the

 

preceding calendar year unless it finds, based on the evidentiary

 

record in the contested case, that increasing the electric choice

 

cap will cause substantial harm to full-service customers. In

 

determining whether an increase in the customer choice cap will

 

result in substantial harm to full-service customers, the

 

commission shall consider all the costs and savings experienced or

 

expected to be experienced by full-service customers based on the

 

difference between costs and savings with and without the proposed

 

percentage increase in the electric choice cap, including, but not

 

limited to, the costs and savings of fuel, purchased power,

 

wholesale sales, investment in new or existing generating

 

facilities, and purchase, lease, or acquisition of generating

 

capacity. The commission shall not initiate more than 1 contested

 

case for an electric utility under this subdivision in any 12-month

 

period.

 

     (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 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 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 the program is not marketed

 

in conjunction with a regulated service. To the extent that 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 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 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 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.

 

     (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) "Electric choice cap" means the limit on a utility's

 

weather-adjusted retail sales that may take service from an

 

alternative electric supplier, as specified in subsection (1)(a) or

 

as determined by the commission under subsection (1)(e).

 

     (c) "Full-service customer" means a retail customer of an

 

electric utility who does not take service from an alternative

 

electric supplier.

 

     (d) "Securitization charges" means that term as defined in

 

section 10h.

 

     (e) (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.