Bill Text: MI SB1164 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Public utilities; public service commission; energy service delivery model and integrated resource plan; require the commission to develop. Amends sec. 10a of 1939 PA 3 (MCL 460.10a) & repeals sec. 47 of 2008 PA 295 (MCL 460.1047).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2016-11-10 - Referred To Committee On Energy And Technology [SB1164 Detail]

Download: Michigan-2015-SB1164-Introduced.html

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SENATE BILL No. 1164

 

 

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.