HOUSE BILL No. 4297

March 5, 2015, Introduced by Rep. Nesbitt and referred to the Committee on Energy Policy.

 

     A bill to amend 2008 PA 295, entitled

 

"Clean, renewable, and efficient energy act,"

 

by amending sections 1, 3, 5, 7, 9, 11, 13, 21, 27, 39, 43, 45, 89,

 

91, 93, and 95 (MCL 460.1001, 460.1003, 460.1005, 460.1007,

 

460.1009, 460.1011, 460.1013, 460.1021, 460.1027, 460.1039,

 

460.1043, 460.1045, 460.1089, 460.1091, 460.1093, and 460.1095),

 

section 93 as amended by 2010 PA 269; and to repeal acts and parts

 

of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. (1) This act shall be known and may be cited as the

 

"clean, renewable, and efficient energy act".

 

     (2) The purpose of this act is to promote the development of

 

clean energy , and renewable energy , and energy optimization

 

through the implementation of a clean, renewable , and energy

 


efficient standard that will cost-effectively do all of the

 

following:

 

     (a) Diversify the resources used to reliably meet the energy

 

needs of consumers in this state.

 

     (b) Provide greater energy security through the use of

 

indigenous energy resources available within the this state.

 

     (c) Encourage private investment in renewable energy. and

 

energy efficiency.

 

     (d) Provide improved air quality and other benefits to energy

 

consumers and citizens of this state.

 

     (e) Remove unnecessary burdens on the appropriate use of solid

 

waste as a clean energy source.

 

     Sec. 3. As used in this act:

 

     (a) "Advanced cleaner energy" means electricity generated

 

using an advanced cleaner energy system.

 

     (b) "Advanced cleaner energy credit" means a credit certified

 

under section 43 that represents generated advanced cleaner energy.

 

     (c) "Advanced cleaner energy system" means any of the

 

following:

 

     (i) A gasification facility.

 

     (ii) An industrial cogeneration facility.

 

     (iii) A coal-fired electric generating facility if 85% or more

 

of the carbon dioxide emissions are captured and permanently

 

geologically sequestered.

 

     (iv) An electric generating facility or system that uses

 

technologies not in commercial operation on the effective date of

 

this act.October 6, 2008.

 


     (d) "Affiliated transmission company" means that term as

 

defined in section 2 of the electric transmission line

 

certification act, 1995 PA 30, MCL 460.562.

 

     (e) "Applicable regional transmission organization" means a

 

nonprofit, member-based organization governed by an independent

 

board of directors that serves as the federal energy regulatory

 

commission-approved commission approved regional transmission

 

organization with oversight responsibility for the region that

 

includes the provider's service territory.

 

     (f) "Biomass" means any organic matter that is not derived

 

from fossil fuels, that can be converted to usable fuel for the

 

production of energy, and that replenishes over a human, not a

 

geological, time frame, including, but not limited to, all of the

 

following:

 

     (i) Agricultural crops and crop wastes.

 

     (ii) Short-rotation energy crops.

 

     (iii) Herbaceous plants.

 

     (iv) Trees and wood. , but only if derived from sustainably

 

managed forests or procurement systems, as defined in section 261c

 

of the management and budget act, 1984 PA 431, MCL 18.1261c.

 

     (v) Paper and pulp products.

 

     (vi) Precommercial wood thinning waste, brush, or yard waste.

 

     (vii) Wood wastes and residues from the processing of wood

 

products or paper.

 

     (viii) Animal wastes.

 

     (ix) Wastewater sludge or sewage.

 

     (x) Aquatic plants.

 


     (xi) Food production and processing waste.

 

     (xii) Organic by-products from the production of biofuels.

 

     (g) "Board" means the wind energy resource zone board created

 

under section 143.

 

     (h) "Carbon dioxide emissions benefits" means that the carbon

 

dioxide emissions per megawatt hour of electricity generated by the

 

advanced cleaner energy system are at least 85% less or, for an

 

integrated gasification combined cycle facility or an integrated

 

pyrolysis combined cycle facility, 70% less than the average carbon

 

dioxide emissions per megawatt hour of electricity generated from

 

all coal-fired electric generating facilities operating in this

 

state on January 1, 2008.

 

     (i) "Commission" means the Michigan public service commission.

 

     (j) "Customer meter" means an electric meter of a provider's

 

retail customer. Customer meter does not include a municipal water

 

pumping meter or additional meters at a single site that were

 

installed specifically to support interruptible air conditioning,

 

interruptible water heating, net metering, or time-of-day tariffs.

 

     Sec. 5. As used in this act:

 

     (a) "Electric provider", subject to sections 21(1), 23(1), and

 

25(1), means any of the following:

 

     (i) Any person or entity that is regulated by the commission

 

for the purpose of selling electricity to retail customers in this

 

state.

 

     (ii) A municipally-owned electric utility in this state.

 

     (iii) A cooperative electric utility in this state.

 

     (iv) Except as used in subpart B of part 2, an alternative

 


electric supplier licensed under section 10a of 1939 PA 3, MCL

 

460.10a.

 

     (b) "Eligible electric generator" means that a methane

 

digester or renewable energy system with a generation capacity

 

limited to the customer's electric need and that does not exceed

 

the following:

 

     (i) For a renewable energy system, 150 kilowatts of aggregate

 

generation at a single site.

 

     (ii) For a methane digester, 550 kilowatts of aggregate

 

generation at a single site.

 

     (c) "Energy conservation" means the reduction of customer

 

energy use through the installation of measures or changes in

 

energy usage behavior. Energy conservation does not include the use

 

of advanced cleaner energy systems.

 

     (d) "Energy efficiency" means a decrease in customer

 

consumption of electricity or natural gas achieved through measures

 

or programs that target customer behavior, equipment, devices, or

 

materials without reducing the quality of energy services.

 

     (e) "Energy optimization", subject to subdivision (f), means

 

all of the following:

 

     (i) Energy efficiency.

 

     (ii) Load management, to the extent that the load management

 

reduces overall energy usage.

 

     (iii) Energy conservation, but only to the extent that the

 

decreases in the consumption of electricity produced by energy

 

conservation are objectively measurable and attributable to an

 

energy optimization plan.

 


     (f) Energy optimization does not include electric provider

 

infrastructure projects that are approved for cost recovery by the

 

commission other than as provided in this act.

 

     (g) "Energy optimization credit" means a credit certified

 

pursuant to section 87 that represents achieved energy

 

optimization.

 

     (h) "Energy optimization plan" or "EO plan" means a plan under

 

section 71.

 

     (i) "Energy optimization standard" means the minimum energy

 

savings required to be achieved under section 77.

 

     (e) (j) "Energy star" means the voluntary partnership among

 

the United States department of energy, the United States

 

environmental protection agency, product manufacturers, local

 

utilities, and retailers to help promote energy efficient products

 

by labeling with the energy star logo, to educate consumers about

 

the benefits of energy efficiency, and to help promote energy

 

efficiency in buildings by benchmarking and rating energy

 

performance.

 

     (f) (k) "Federal approval" means approval by the applicable

 

regional transmission organization or other federal energy

 

regulatory commission approved transmission planning process of a

 

transmission project that includes the transmission line. Federal

 

approval may be evidenced in any of the following manners:

 

     (i) The proposed transmission line is part of a transmission

 

project included in the applicable regional transmission

 

organization's board-approved transmission expansion plan.

 

     (ii) The applicable regional transmission organization has

 


informed the electric utility, affiliated transmission company, or

 

independent transmission company that a transmission project

 

submitted for an out-of-cycle project review has been approved by

 

the applicable regional transmission organization, and the approved

 

transmission project includes the proposed transmission line.

 

     (iii) If, after the effective date of this act, October 6, 2008,

 

the applicable regional transmission organization utilizes another

 

approval process for transmission projects proposed by an electric

 

utility, affiliated transmission company, or independent

 

transmission company, the proposed transmission line is included in

 

a transmission project approved by the applicable regional

 

transmission organization through the approval process developed

 

after the effective date of this act.October 6, 2008.

 

     (iv) Any other federal energy regulatory commission approved

 

transmission planning process for a transmission project.

 

     Sec. 7. As used in this act:

 

     (a) "Gasification facility" means a facility located in this

 

state that uses a thermochemical process that does not involve

 

direct combustion to produce synthesis gas, composed of carbon

 

monoxide and hydrogen, from carbon-based feedstocks (such as coal,

 

petroleum coke, wood, biomass, hazardous waste, medical waste,

 

industrial waste, and solid waste, including, but not limited to,

 

municipal solid waste, electronic waste, and waste described in

 

section 11514 of the natural resources and environmental protection

 

act, 1994 PA 451, MCL 324.11514) and that uses the synthesis gas or

 

a mixture of the synthesis gas and methane to generate electricity

 

for commercial use. Gasification facility includes the transmission

 


lines, gas transportation lines and facilities, and associated

 

property and equipment specifically attributable to such a

 

facility. Gasification facility includes, but is not limited to, an

 

integrated gasification combined cycle facility and a plasma arc

 

gasification facility.

 

     (b) "Incremental costs of compliance" means the net revenue

 

required by an electric provider to comply with the renewable

 

energy standard, calculated as provided under section 47.

 

     (c) "Independent transmission company" means that term as

 

defined in section 2 of the electric transmission line

 

certification act, 1995 PA 30, MCL 460.562.

 

     (d) "Industrial cogeneration facility" means a facility that

 

generates electricity using industrial thermal energy or industrial

 

waste energy.

 

     (e) "Industrial thermal energy" means thermal energy that is a

 

by-product of an industrial or manufacturing process and that would

 

otherwise be wasted. For the purposes of this subdivision,

 

industrial or manufacturing process does not include the generation

 

of electricity.

 

     (f) "Industrial waste energy" means exhaust gas or flue gas

 

that is a by-product of an industrial or manufacturing process and

 

that would otherwise be wasted. For the purposes of this

 

subdivision, industrial or manufacturing process does not include

 

the generation of electricity.

 

     (g) "Integrated gasification combined cycle facility" means a

 

gasification facility that uses a thermochemical process, including

 

high temperatures and controlled amounts of air and oxygen, to

 


break substances down into their molecular structures and that uses

 

exhaust heat to generate electricity.

 

            (h) "Integrated pyrolysis combined cycle facility" means a

 

pyrolysis facility that uses exhaust heat to generate electricity.

 

     (i) (h) "LEED" means the leadership in energy and

 

environmental design green building rating system developed by the

 

United States green building council.

 

     (j) (i) "Load management" means measures or programs that

 

target equipment or devices to result in decreased peak electricity

 

demand such as by shifting demand from a peak to an off-peak

 

period.

 

     (k) "Megawatt", "megawatt hour", or "megawatt hour of

 

electricity", unless the context implies otherwise, includes the

 

steam equivalent of a megawatt or megawatt hour of electricity.

 

     (l) (j) "Modified net metering" means a utility billing method

 

that applies the power supply component of the full retail rate to

 

the net of the bidirectional flow of kilowatt hours across the

 

customer interconnection with the utility distribution system,

 

during a billing period or time-of-use pricing period. A negative

 

net metered quantity during the billing period or during each time-

 

of-use pricing period within the billing period reflects net excess

 

generation for which the customer is entitled to receive credit

 

under section 177(4). Standby charges for modified net metering

 

customers on an energy rate schedule shall be equal to the retail

 

distribution charge applied to the imputed customer usage during

 

the billing period. The imputed customer usage is calculated as the

 

sum of the metered on-site generation and the net of the

 


bidirectional flow of power across the customer interconnection

 

during the billing period. The commission shall establish standby

 

charges for modified net metering customers on demand-based rate

 

schedules that provide an equivalent contribution to utility system

 

costs.

 

     Sec. 9. As used in this act:

 

     (a) "Natural gas provider" means an investor-owned business

 

engaged in the sale and distribution of natural gas within this

 

state whose rates are regulated by the commission. However, as used

 

in subpart B of part 2, natural gas provider does not include an

 

alternative gas supplier licensed under section 9b of 1939 PA 3,

 

MCL 460.9b.

 

     (b) "Pet coke" means a solid carbonaceous residue produced

 

from a coker after cracking and distillation from petroleum

 

refining operations.

 

     (c) (b) "Plasma arc gasification facility" means a

 

gasification facility that uses a plasma torch to break substances

 

down into their molecular structures.

 

     (d) (c) "Provider" means an electric provider or a natural gas

 

provider.

 

     (e) (d) "PURPA" means the public utility regulatory policies

 

act of 1978, Public Law 95-617.

 

     (f) "Pyrolysis facility" means a facility that effects

 

thermochemical decomposition at elevated temperatures without the

 

participation of oxygen, from carbon-based feedstocks such as coal,

 

wood, biomass, industrial waste, or solid waste, including, but not

 

limited to, waste described in section 11514 of the natural

 


resources and environmental protection act, 1994 PA 451, MCL

 

324.11514, but not including pet coke. Pyrolysis facility includes

 

the transmission lines, gas transportation lines and facilities,

 

and associated property and equipment specifically attributable to

 

the facility. Pyrolysis facility includes, but is not limited to,

 

an integrated pyrolysis combined cycle facility.

 

     (g) (e) "Qualifying small power production facility" means

 

that term as defined in 16 USC 824a-3.

 

     Sec. 11. As used in this act:

 

     (a) "Renewable energy" means electricity or steam generated

 

using a renewable energy system.

 

     (b) "Renewable energy capacity portfolio" means the number of

 

megawatts calculated under section 27(2) for a particular year.

 

     (c) "Renewable energy contract" means a contract to acquire

 

renewable energy and the associated renewable energy credits from 1

 

or more renewable energy systems.

 

     (d) "Renewable energy credit" means a credit granted pursuant

 

to section 41 that represents generated renewable energy.

 

     (e) "Renewable energy credit portfolio" means the sum of the

 

renewable energy credits achieved by a provider for a particular

 

year.

 

     (f) "Renewable energy credit standard" means a minimum

 

renewable energy portfolio required under section 27.27(3).

 

     (g) "Renewable energy generator" means a person that, together

 

with its affiliates, has constructed or has owned and operated 1 or

 

more renewable energy systems with combined gross generating

 

capacity of at least 10 megawatts.

 


     (h) "Renewable energy plan" or "plan", means a plan approved

 

under section 21 or 23 or found to comply with this act under

 

section 25, with any amendments adopted under this act.

 

     (i) "Renewable energy resource", subject to subdivision (j),

 

means a resource that naturally replenishes over a human, not a

 

geological, time frame and that is ultimately derived from solar

 

power, water power, or wind power. Renewable energy resource does

 

not include petroleum, nuclear, natural gas, or coal. A renewable

 

energy resource comes from the sun or from thermal inertia of the

 

earth and minimizes the output of toxic material in the conversion

 

of the energy and includes, but is not limited to, all any of the

 

following:

 

     (i) Biomass.

 

     (ii) Solar and solar thermal energy.

 

     (iii) Wind energy.

 

     (iv) Kinetic energy of moving water, including all of the

 

following:

 

     (A) Waves, tides, or currents.

 

     (B) Water released through a dam.

 

     (v) Geothermal energy.

 

     (vi) Thermal energy produced from a geothermal heat pump.

 

     (vii) (vi) Any of the following cleaner energy resources:

 

     (A) Municipal solid waste, including both the biogenic and

 

anthropogenic fractions.

 

     (B) (vii) Landfill gas produced by municipal solid waste.

 

     (C) Fuel that has been manufactured in whole or significant

 

part from waste, including, but not limited to, municipal solid

 


waste or waste described in section 11514 of the natural resources

 

and environmental protection act, 1994 PA 451, MCL 324.11514. Fuel

 

that meets the requirements of this subparagraph includes, but is

 

not limited to, material that is listed under 40 CFR 241.3(b) or

 

241.4(a) or for which a non-waste determination is made by the

 

United States environmental protection agency pursuant to 40 CFR

 

241.3(c).

 

     (j) "Renewable energy resource" does not include pet coke.

 

     (k) (j) "Renewable energy standard" means the minimum

 

renewable energy capacity portfolio, if applicable, and the

 

renewable energy credit portfolio required to be achieved under

 

section 27.

 

     (l) (k) "Renewable energy system" means a facility, electricity

 

generation system, or set of electricity generation systems that

 

use 1 or more renewable energy resources to generate electricity or

 

steam. Renewable energy system does not include any of the

 

following:

 

     (i) A hydroelectric pumped storage facility.

 

     (ii) A hydroelectric facility that uses a dam constructed after

 

the effective date of this act October 6, 2008 unless the dam is a

 

repair or replacement of a dam in existence on the effective date

 

of this act October 6, 2008 or an upgrade of a dam in existence on

 

the effective date of this act October 6, 2008 that increases its

 

energy efficiency.

 

     (iii) An incinerator unless the incinerator is a municipal solid

 

waste incinerator as defined in section 11504 of the natural

 

resources and environmental protection act, 1994 PA 451, MCL

 


324.11504. , that was brought into service before the effective

 

date of this act, including any of the following:

 

     (A) Any upgrade of such an incinerator that increases energy

 

efficiency.

 

     (B) Any expansion of such an incinerator before the effective

 

date of this act.

 

     (C) Any expansion of such an incinerator on or after the

 

effective date of this act to an approximate design rated capacity

 

of not more than 950 tons per day pursuant to the terms of a final

 

request for proposals issued on or before October 1, 1986.

 

     (m) (l) "Revenue recovery mechanism" means the mechanism for

 

recovery of incremental costs of compliance established under

 

section 21.

 

     Sec. 13. As used in this act:

 

     (a) "Site" means a contiguous site, regardless of the number

 

of meters at that site. A site that would be contiguous but for the

 

presence of a street, road, or highway shall be considered to be

 

contiguous for the purposes of this subdivision.

 

     (b) "Transmission line" means all structures, equipment, and

 

real property necessary to transfer electricity at system bulk

 

supply voltage of 100 kilovolts or more.

 

     (c) "True net metering" means a utility billing method that

 

applies the full retail rate to the net of the bidirectional flow

 

of kilowatt hours across the customer interconnection with the

 

utility distribution system, during a billing period or time-of-use

 

pricing period. A negative net metered quantity during the billing

 

period or during each time-of-use pricing period within the billing

 


period reflects net excess generation for which the customer is

 

entitled to receive credit under section 177(4).

 

     (d) "Utility system resource cost test" means a standard that

 

is met for an investment in energy optimization if, on a life cycle

 

basis, the total avoided supply-side costs to the provider,

 

including representative values for electricity or natural gas

 

supply, transmission, distribution, and other associated costs, are

 

greater than the total costs to the provider of administering and

 

delivering the energy optimization program, including net costs for

 

any provider incentives paid by customers and capitalized costs

 

recovered under section 89.

 

     (d) (e) "Wind energy conversion system" means a renewable

 

energy system that uses 1 or more wind turbines to generate

 

electricity and has a nameplate capacity of 100 kilowatts or more.

 

     (e) (f) "Wind energy resource zone" or "wind zone" means an

 

area designated by the commission under section 147.

 

     Sec. 21. (1) This section applies only to electric providers

 

whose rates are regulated by the commission.

 

     (2) Each electric provider shall file a proposed renewable

 

energy plan with the commission within 90 days after the commission

 

issues a temporary order under section 171. 191. The proposed plan

 

shall meet all of the following requirements:

 

     (a) Describe how the electric provider will meet the renewable

 

energy standards.

 

     (b) Specify whether the number of megawatt hours of

 

electricity used in the calculation of the renewable energy credit

 

portfolio will be weather-normalized or based on the average number

 


of megawatt hours of electricity sold by the electric provider

 

annually during the previous 3 years to retail customers in this

 

state. Once the plan is approved by the commission, this option

 

shall not be changed.

 

     (c) Include the expected incremental cost of compliance with

 

the renewable energy standards for a 20-year period beginning when

 

the plan is approved by the commission.

 

     (d) For an electric provider that had 1,000,000 or more retail

 

customers in this state on January 1, 2008, describe the bidding

 

process to be used by the electric provider under section 33. The

 

description shall include measures to be employed in the

 

preparation of requests for proposals and the handling and

 

evaluation of proposals received to ensure that any bidder that is

 

an affiliate of the electric utility is not afforded a competitive

 

advantage over any other bidder and that each bidder, including any

 

bidder that is an affiliate of the electric provider, is treated in

 

a fair and nondiscriminatory manner.

 

     (3) The proposed plan shall establish a nonvolumetric

 

mechanism for the recovery of the incremental costs of compliance

 

within the electric provider's customer rates. The revenue recovery

 

mechanism shall not result in rate impacts that exceed the monthly

 

maximum retail rate impacts specified under section 45. The revenue

 

recovery mechanism is subject to adjustment under sections 47(4)

 

and 49. A customer participating in a commission-approved voluntary

 

renewable energy program under an agreement in effect on the

 

effective date of this act October 6, 2008 shall not incur charges

 

under the revenue recovery mechanism unless except to the extent

 


that the charges under the revenue recovery mechanism exceed the

 

charges the customer is incurring for the voluntary renewable

 

energy program. In that case, the customer shall only incur the

 

difference between the charge assessed under the revenue recovery

 

mechanism and the charges the customer is incurring for the

 

voluntary renewable energy program. The limitation on charges

 

applies only during the term of the agreement, not including

 

automatic agreement renewals, or until 1 year after the effective

 

date of this act, October 6, 2009, whichever is later. Before

 

entering an agreement with a customer to participate in a

 

commission-approved voluntary renewable energy program and before

 

the last automatic monthly renewal of such an agreement that will

 

occur less than 1 year after the effective date of this act, before

 

October 6, 2009, an electric provider shall notify the customer

 

that the customer will be responsible for the full applicable

 

charges under the revenue recovery mechanism and under the

 

voluntary renewable energy program as provided under this

 

subsection.

 

     (4) If proposed by the electric provider in its proposed plan,

 

the revenue recovery mechanism shall result in an accumulation of

 

reserve funds in advance of expenditure and the creation of a

 

regulatory liability that accrues interest at the average short-

 

term borrowing rate available to the electric provider during the

 

appropriate period. If proposed by the electric provider in its

 

proposed plan, the commission shall establish a minimum balance of

 

accumulated reserve funds for the purposes of section 47(4).

 

     (5) The commission shall conduct a contested case hearing on

 


the proposed plan filed under subsection (2), pursuant to the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328. If a renewable energy generator files a petition to

 

intervene in the contested case in the manner prescribed by the

 

commission's rules for interventions generally, the commission

 

shall grant the petition. Subject to subsections (6) and (10),

 

after the hearing and within 90 days after the proposed plan is

 

filed with the commission, the commission shall approve, with any

 

changes consented to by the electric provider, or reject the plan.

 

     (6) The commission shall not approve an electric provider's

 

plan unless the commission determines both of the following:

 

     (a) That the plan is reasonable and prudent. In making this

 

determination, the commission shall take into consideration

 

projected costs and whether or not projected costs included in

 

prior plans were exceeded.

 

     (b) That the life-cycle cost of renewable energy acquired or

 

generated under the plan less the projected life-cycle net savings

 

associated with the provider's former energy optimization plan

 

approved under former section 73 does not exceed the expected life-

 

cycle cost of electricity generated by a new conventional coal-

 

fired facility. In determining the expected life-cycle cost of

 

electricity generated by a new conventional coal-fired facility,

 

making this determination, the commission shall consider data from

 

this state and the states of Ohio, Indiana, Illinois, Wisconsin,

 

and Minnesota, including, if applicable, the life-cycle costs of

 

the renewable energy system and new conventional coal-fired

 

facilities. When determining the life-cycle costs of the renewable

 


energy system and new conventional coal-fired facilities, the

 

commission shall use a methodology that includes, but is not

 

limited to, consideration of the value of energy, capacity, and

 

ancillary services. The commission shall also consider other costs

 

such as transmission, economic benefits, and environmental costs,

 

including, but not limited to, greenhouse gas constraints or taxes.

 

In performing its assessment, the commission may utilize other

 

available data, including national or regional reports and data

 

published by federal or state governmental agencies, industry

 

associations, and consumer groups.

 

     (7) An electric provider shall not begin recovery of the

 

incremental costs of compliance within its rates until the

 

commission has approved its proposed plan.

 

     (8) Every 2 years after initial approval of a plan under

 

subsection (5), the commission shall review the plan. The

 

commission shall conduct a contested case hearing on the plan

 

pursuant to the administrative procedures act of 1969, 1969 PA 306,

 

MCL 24.201 to 24.328. The annual renewable cost reconciliation

 

under section 49 for that year may be joined with the overall plan

 

review in the same contested case hearing. Subject to subsections

 

(6) and (10), after the hearing, the commission shall approve, with

 

any changes consented to by the electric provider, or reject the

 

plan and any proposed amendments to the plan.

 

     (9) If an electric provider proposes to amend its plan at a

 

time other than during the biennial review process under subsection

 

(8), the electric provider shall file the proposed amendment with

 

the commission. If the proposed amendment would modify the revenue

 


recovery mechanism, the commission shall conduct a contested case

 

hearing on the amendment pursuant to the administrative procedures

 

act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The annual

 

renewable cost reconciliation under section 49 may be joined with

 

the plan amendment in the same contested case proceeding. Subject

 

to subsections (6) and (10), after the hearing and within 90 days

 

after the amendment is filed, the commission shall approve, with

 

any changes consented to by the electric provider, or reject the

 

plan and the proposed amendment or amendments to the plan.

 

     (10) If the commission rejects a proposed plan or amendment

 

under this section, the commission shall explain in writing the

 

reasons for its determination.

 

     Sec. 27. (1) Subject to sections 31 and 45, and in addition to

 

the requirements of subsection (3), an electric provider that is an

 

electric utility with 1,000,000 or more retail customers in this

 

state as of January 1, 2008 shall achieve a renewable energy

 

capacity portfolio of not less than the following:

 

     (a) For an electric provider with more than 1,000,000 but less

 

than 2,000,000 retail electric customers in this state on January

 

1, 2008, a renewable energy capacity portfolio of 200 megawatts by

 

December 31, 2013 and 500 megawatts by December 31, 2015.

 

     (b) For an electric provider with more than 2,000,000 retail

 

electric customers in this state on January 1, 2008, a renewable

 

energy capacity portfolio of 300 megawatts by December 31, 2013 and

 

600 megawatts by December 31, 2015.

 

     (2) An electric provider's renewable energy capacity portfolio

 

shall be calculated by adding the following:

 


     (a) The nameplate capacity in megawatts of renewable energy

 

systems owned by the electric provider that were not in commercial

 

operation before the effective date of this act.October 6, 2008.

 

     (b) The capacity in megawatts of renewable energy that the

 

electric provider is entitled to purchase under contracts that were

 

not in effect before the effective date of this act.October 6,

 

2008.

 

     (3) Subject to sections 31 and 45, an electric provider shall

 

achieve a renewable energy credit portfolio as follows:

 

     (a) In 2012, 2013, 2014, and 2015, a renewable energy credit

 

portfolio based on the sum of the following:

 

     (i) The number of renewable energy credits from electricity

 

generated in the 1-year period preceding the effective date of this

 

act October 6, 2008 that would have been transferred to the

 

electric provider pursuant to section 35(1), if this act had been

 

in effect during that 1-year period.

 

     (ii) The number of renewable energy credits equal to the number

 

of megawatt hours of electricity produced or obtained by the

 

electric provider in the 1-year period preceding the effective date

 

of this act October 6, 2008 from renewable energy systems for which

 

recovery in electric rates was approved on the effective date of

 

this act.as of October 6, 2008.

 

     (iii) Renewable energy credits in an amount calculated as

 

follows:

 

     (A) Taking into account the number of renewable energy credits

 

under subparagraphs (i) and (ii), determine the number of additional

 

renewable energy credits that the electric provider would need to

 


reach a 10% renewable energy portfolio in that year.

 

     (B) Multiply the number under sub-subparagraph (A) by 20% for

 

2012, 33% for 2013, 50% for 2014, and 100% for 2015.

 

     (b) In 2016 and each year thereafter, maintain a renewable

 

energy credit portfolio that consists of at least the same number

 

of renewable energy credits as were required in 2015 under

 

subdivision (a).

 

     (4) An electric provider's renewable energy credit portfolio

 

shall be calculated as follows:

 

     (a) Determine the number of renewable energy credits used to

 

comply with this subpart during the applicable year.

 

     (b) Divide by 1 of the following at the option of the electric

 

provider as specified in its renewable energy plan:

 

     (i) The number of weather-normalized megawatt hours of

 

electricity sold by the electric provider during the previous year

 

to retail customers in this state.

 

     (ii) The average number of megawatt hours of electricity sold

 

by the electric provider annually during the previous 3 years to

 

retail customers in this state.

 

     (c) Multiply the quotient under subdivision (b) by 100.

 

     (5) Subject to subsection (6), each electric provider shall

 

meet the renewable energy credit standards with renewable energy

 

credits obtained by 1 or more of the following means:

 

     (a) Generating electricity from renewable energy systems for

 

sale to retail customers.

 

     (b) Purchasing or otherwise acquiring renewable energy credits

 

with or without the associated renewable energy.

 


     (6) An electric provider may substitute energy optimization

 

credits, advanced cleaner energy credits with or without the

 

associated advanced cleaner energy, or a combination thereof for

 

renewable energy credits otherwise required to meet the renewable

 

energy credit standards if the substitution is approved by the

 

commission. However, commission approval is not required to

 

substitute advanced cleaner energy from industrial cogeneration for

 

renewable energy credits. The commission shall not approve a

 

substitution unless the commission determines that the substitution

 

is cost-effective compared to other sources of renewable energy

 

credits and, if the substitution involves advanced cleaner energy

 

credits, that the advanced cleaner energy system provides carbon

 

dioxide emissions benefits. In determining whether the substitution

 

of advanced cleaner energy credits is cost-effective, the

 

commission shall include as part of the costs of the system the

 

environmental costs attributed to the advanced cleaner energy

 

system, including the costs of environmental control equipment or

 

greenhouse gas constraints or taxes. The commission's

 

determinations shall be made after a contested case hearing that

 

includes consultation with the department of environmental quality

 

on the issue of carbon dioxide emissions benefits, if relevant, and

 

environmental costs.

 

     (7) Under subsection (6), energy optimization credits,

 

advanced cleaner energy credits, or a combination thereof shall not

 

be used by a provider to meet more than 10% of the renewable energy

 

credit standards. Advanced cleaner energy from advanced cleaner

 

energy systems in existence on January 1, 2008 shall not be used by

 


a provider to meet more than 70% of this 10% limit. This 10% limit

 

does not apply to advanced cleaner energy credits from plasma arc

 

gasification.

 

     (8) Substitutions under subsection (6) shall be made at the

 

following rates per renewable energy credit:

 

     (a) One energy optimization credit.

 

     (b) One advanced cleaner energy credit from plasma arc

 

gasification or industrial cogeneration.

 

     (c) Ten advanced cleaner energy credits other than from plasma

 

arc gasification or industrial cogeneration.

 

     (9) When an energy optimization credit is substituted for a

 

renewable energy credit, the energy optimization credit expires.

 

The commission shall ensure that each energy optimization credit

 

substituted for a renewable energy credit is properly accounted

 

for. Any energy optimization credits outstanding on January 1, 2017

 

expire on that date.

 

     Sec. 39. (1) Except as otherwise provided in section 35(1), 1

 

renewable energy credit shall be granted to the owner of a

 

renewable energy system for each megawatt hour of electricity

 

generated from the renewable energy system, subject to all of the

 

following:

 

     (a) If a renewable energy system uses both a renewable energy

 

resource and a nonrenewable energy resource to generate electricity

 

or steam, the number of renewable energy credits granted shall be

 

based on the percentage of the electricity or steam, or both,

 

generated from the renewable energy resource.

 

     (b) A renewable energy credit shall not be granted for

 


renewable energy generated from a municipal solid waste incinerator

 

to the extent that the renewable energy was generated by operating

 

the incinerator in excess of the greater of the following, as

 

applicable:

 

     (i) The incinerator's nameplate capacity rating on January 1,

 

2008.

 

     (ii) If the incinerator is expanded after the effective date of

 

this act to an approximate continuous design rated capacity of not

 

more than 950 tons per day pursuant to the terms of a final request

 

for proposals issued not later than October 1986, the nameplate

 

capacity rating required to accommodate that expansion.

 

     (b) (c) A renewable energy credit shall not be granted for

 

renewable energy the renewable attributes of which are used by an

 

electric provider in a commission-approved voluntary renewable

 

energy program.

 

     (2) Subject to subsection (3), the The following additional

 

renewable energy credits, to be known as Michigan incentive

 

renewable energy credits, shall be granted under the following

 

circumstances:

 

     (a) 2 renewable energy credits for each megawatt hour of

 

electricity from solar power.

 

     (b) 1/5 renewable energy credit for each megawatt hour of

 

electricity generated from a renewable energy system, other than

 

wind, at peak demand time as determined by the commission.

 

     (c) 1/5 renewable energy credit for each megawatt hour of

 

electricity generated from a renewable energy system during off-

 

peak hours, stored using advanced electric storage technology or a

 


hydroelectric pumped storage facility, and used during peak hours.

 

However, the number of renewable energy credits shall be calculated

 

based on the number of megawatt hours of renewable energy used to

 

charge the advanced electric storage technology or fill the pumped

 

storage facility, not the number of megawatt hours actually

 

discharged or generated by discharge from the advanced energy

 

storage facility or pumped storage facility.

 

     (d) 1/10 renewable energy credit for each megawatt hour of

 

electricity generated from a renewable energy system constructed

 

using equipment made in this state as determined by the commission.

 

The additional credit under this subdivision is available for the

 

first 3 years after the renewable energy system first produces

 

electricity on a commercial basis.

 

     (e) 1/10 renewable energy credit for each megawatt hour of

 

electricity from a renewable energy system constructed using a

 

workforce composed of residents of this state as determined by the

 

commission. The additional credit under this subdivision is

 

available for the first 3 years after the renewable energy system

 

first produces electricity on a commercial basis.

 

     (3) A renewable energy credit expires at the earliest of the

 

following times:

 

     (a) When used by an electric provider to comply with its

 

renewable energy credit standard.

 

     (b) When substituted for an energy optimization credit under

 

section 77.

 

     (b) (c) Three years after the end of the month in which the

 

renewable energy credit was generated.

 


     (4) A renewable energy credit associated with renewable energy

 

generated within 120 days after the start of a calendar year may be

 

used to satisfy the prior year's renewable energy standard and

 

expires when so used.

 

     Sec. 43. (1) One advanced cleaner energy credit shall be

 

granted to the owner of an advanced cleaner energy system for each

 

megawatt hour of electricity generated from the advanced cleaner

 

energy system. However, if an advanced cleaner energy system uses

 

both an advanced cleaner energy technology and an energy technology

 

that is not an advanced cleaner energy technology to generate

 

electricity, the number of advanced cleaner energy credits granted

 

shall be based on the percentage of the electricity generated from

 

the advanced cleaner energy technology. If a facility or system,

 

such as a gasification facility using biomass as feedstock,

 

qualifies as both an advanced cleaner energy system and a renewable

 

energy system, at the owner's option, either an advanced cleaner

 

energy credit or a renewable energy credit, but not both, may be

 

granted for any given megawatt hour of electricity generated by the

 

facility or system.

 

     (2) An advanced cleaner energy credit expires at the earliest

 

of the following times:

 

     (a) When substituted for a renewable energy credit under

 

section 27. or an energy optimization credit under section 77.

 

     (b) 3 years after the end of the month in which the advanced

 

cleaner energy credit was generated.

 

     (3) Advanced cleaner energy credits may be traded, sold, or

 

otherwise transferred.

 


     (4) The commission shall establish an advanced cleaner energy

 

credit certification and tracking program. The certification and

 

tracking program may be contracted to and performed by a third

 

party through a system of competitive bidding. The program shall

 

include all of the following:

 

     (a) A process to certify advanced cleaner energy systems,

 

including all existing advanced cleaner energy systems operating on

 

the effective date of this act, October 6, 2008, as eligible to

 

receive advanced cleaner energy credits.

 

     (b) A process for verifying that the operator of an advanced

 

cleaner energy system is in compliance with state and federal law

 

applicable to the operation of the advanced cleaner energy system

 

when certification is granted. If an advanced cleaner energy system

 

becomes noncompliant with state or federal law, advanced cleaner

 

energy credits shall not be granted for advanced cleaner energy

 

generated by that advanced cleaner energy system during the period

 

of noncompliance.

 

     (c) A method for determining the date on which an advanced

 

cleaner energy credit is generated and valid for transfer.

 

     (d) A method for transferring advanced cleaner energy credits.

 

     (e) A method for ensuring that each advanced cleaner energy

 

credit transferred is properly accounted for.

 

     (f) Allowance for issuance, transfer, and use of advanced

 

cleaner energy credits in electronic form.

 

     (g) A method for ensuring that both a renewable energy credit

 

and an advanced cleaner energy credit are not awarded for the same

 

megawatt hour of electricity.

 


     (5) An advanced cleaner energy credit purchased from an

 

advanced cleaner energy system in this state is not required to be

 

used in this state.

 

     Sec. 45. (1) For an electric provider whose rates are

 

regulated by the commission, the commission shall determine the

 

appropriate charges for the electric provider's tariffs that permit

 

recovery of the incremental cost of compliance subject to the

 

retail rate impact limits set forth in subsection (2).

 

     (2) An electric provider shall recover the incremental cost of

 

compliance with the renewable energy standards by an itemized

 

charge on the customer's bill for billing periods beginning not

 

earlier than 90 days after the commission approves the electric

 

provider's renewable energy plan under section 21 or 23 or

 

determines under section 25 that the plan complies with this act.

 

An electric provider shall not comply with the renewable energy

 

standards to the extent that, as determined by the commission,

 

recovery of the incremental cost of compliance will have a retail

 

rate impact that exceeds any of the following:

 

     (a) $3.00 per month per residential customer meter.

 

     (b) $16.58 per month per commercial secondary customer meter.

 

     (c) $187.50 per month per commercial primary or industrial

 

customer meter.

 

     (3) The retail rate impact limits of subsection (2) apply only

 

to the incremental costs of compliance and do not apply to costs

 

approved for recovery by the commission other than as provided in

 

this act.

 

     (4) The incremental cost of compliance shall be calculated for

 


a 20-year period beginning with approval of the renewable energy

 

plan and shall be recovered on a levelized basis.

 

     (5) In its billing statements for a residential customer, each

 

provider shall report to the residential customer all of the

 

following in a format consistent with other information on the

 

customer bill:

 

     (a) An itemized monthly charge, expressed in dollars and

 

cents, collected from the customer for implementing the renewable

 

energy program requirements of this act. In the first bill issued

 

after the close of the previous year, an electric provider shall

 

notify each residential customer that the customer may be entitled

 

to an income tax credit to offset some of the annual amounts

 

collected for the renewable energy program.

 

     (b) An itemized monthly charge, expressed in dollars and

 

cents, collected from the customer for implementing the energy

 

optimization program requirements of this act.

 

     (c) An estimated monthly savings, expressed in dollars and

 

cents, for that customer to reflect the reductions in the monthly

 

energy bill produced by the energy optimization program under this

 

act.

 

     (b) (d) An estimated monthly savings, expressed in dollars and

 

cents, for that customer to reflect the long-term, life-cycle,

 

levelized costs of building and operating new conventional coal-

 

fired electric generating power plants avoided under this act as

 

determined by the commission.

 

     (c) (e) The website address at which the commission's annual

 

report under section 51 is posted.

 


     (6) For the first year of the programs under this part, the

 

values reported under subsection (5) shall be estimates by the

 

commission. The values in following years shall be based on the

 

provider's actual customer experiences. If the provider is unable

 

to provide customer-specific information under subsection (5)(b) or

 

(c), it shall instead specify the state average itemized charge or

 

savings, as applicable, for residential customers. The provider

 

shall make this calculation based on a method approved by the

 

commission.

 

     (7) In determining long-term, life-cycle, levelized costs of

 

building and operating and acquiring nonrenewable electric

 

generating capacity and energy for the purpose of subsection

 

(5)(d), (5)(b), the commission shall consider historic and

 

predicted costs of financing, construction, operation, maintenance,

 

fuel supplies, environmental protection, and other appropriate

 

elements of energy production. For purposes of this comparison, the

 

capacity of avoided new conventional coal-fired electric generating

 

facilities shall be expressed in megawatts and avoided new

 

conventional coal-fired electricity generation shall be expressed

 

in megawatt hours. Avoided costs shall be measured in cents per

 

kilowatt hour.

 

     Sec. 89. (1) The commission shall allow a provider whose rates

 

are regulated by the commission to recover the actual costs of

 

implementing its approved energy optimization plan incurred before

 

January 1, 2016. However, costs exceeding the overall funding

 

levels specified in the energy optimization plan are not

 

recoverable unless those costs are reasonable and prudent and meet

 


the utility system resource cost test. Furthermore, costs for load

 

management undertaken pursuant to an energy optimization plan are

 

not recoverable as energy optimization program costs under this

 

section, but may be recovered as described in section 95.

 

     (2) Under subsection (1), costs shall be recovered from all

 

natural gas customers and from residential electric customers by

 

volumetric charges, from all other metered electric customers by

 

per-meter charges, and from unmetered electric customers by an

 

appropriate charge, applied to utility bills as an itemized charge.

 

     (3) For the electric primary customer rate class customers of

 

electric providers and customers of natural gas providers with an

 

aggregate annual natural gas billing demand of more than 100,000

 

decatherms or equivalent MCFs for all sites in the natural gas

 

utility's service territory, the cost recovery under subsection (1)

 

shall not exceed 1.7% of total retail sales revenue for that

 

customer class. For electric secondary customers and for

 

residential customers, the cost recovery shall not exceed 2.2% of

 

total retail sales revenue for those customer classes.

 

     (4) Upon petition by a provider whose rates are regulated by

 

the commission, the commission shall authorize the provider to

 

capitalize all energy efficiency and energy conservation equipment,

 

materials, and installation costs with an expected economic life

 

greater than 1 year incurred in implementing its energy

 

optimization plan, including such costs paid to third parties, such

 

as customer rebates and customer incentives. The provider shall

 

also propose depreciation treatment with respect to its capitalized

 

costs in its energy optimization plan, and the commission shall

 


order reasonable depreciation treatment related to these

 

capitalized costs. A provider shall not capitalize payments made to

 

an independent energy optimization program administrator under

 

section 91.

 

     (5) The established funding level for low income residential

 

programs shall be provided from each customer rate class in

 

proportion to that customer rate class's funding of the provider's

 

total energy optimization programs. Charges shall be applied to

 

distribution customers regardless of the source of their

 

electricity or natural gas supply.

 

     (6) The commission shall authorize a natural gas provider that

 

spends a minimum of 0.5% of total natural gas retail sales

 

revenues, including natural gas commodity costs, in a year on

 

commission-approved energy optimization programs to implement a

 

symmetrical revenue decoupling true-up mechanism that adjusts for

 

sales volumes that are above or below the projected levels that

 

were used to determine the revenue requirement authorized in the

 

natural gas provider's most recent rate case. In determining the

 

symmetrical revenue decoupling true-up mechanism utilized for each

 

provider, the commission shall give deference to the proposed

 

mechanism submitted by the provider. The commission may approve an

 

alternative mechanism if the commission determines that the

 

alternative mechanism is reasonable and prudent. The commission

 

shall authorize the natural gas provider to decouple rates

 

regardless of whether the natural gas provider's energy

 

optimization programs are administered by the provider or an

 

independent energy optimization program administrator under section

 


91.

 

     (7) A natural gas provider or an electric provider shall not

 

spend more than the following percentage of total utility retail

 

sales revenues, including electricity or natural gas commodity

 

costs, in any year to comply with the energy optimization

 

performance standard without specific approval from the commission:

 

     (a) In 2009, 0.75% of total retail sales revenues for 2007.

 

     (b) In 2010, 1.0% of total retail sales revenues for 2008.

 

     (c) In 2011, 1.5% of total retail sales revenues for 2009.

 

     (d) In 2012, and each year thereafter, 2013, 2014, and 2015,

 

2.0% of total retail sales revenues for the 2 years preceding.

 

     Sec. 91. (1) Except for section 89(6), sections 71 to 87 and

 

89 do not apply to a provider that pays the following percentage of

 

total utility sales revenues, including electricity or natural gas

 

commodity costs, each year to an independent energy optimization

 

program administrator selected by the commission:

 

     (a) In 2009, 0.75% of total retail sales revenues for 2007.

 

     (b) In 2010, 1.0% of total retail sales revenues for 2008.

 

     (c) In 2011, 1.5% of total retail sales revenues for 2009.

 

     (d) In 2012, and each year thereafter, 2013, 2014, and 2015,

 

2.0% of total retail sales revenues for the 2 years preceding that

 

year.

 

     (2) An alternative compliance payment received from a provider

 

by the energy optimization program administrator under subsection

 

(1) shall be used to administer energy efficiency programs for the

 

provider. Money unspent in a year shall be carried forward to be

 

spent in the subsequent year.

 


     (3) The commission shall allow a provider to recover an

 

alternative compliance payment under subsection (1). This cost

 

shall be recovered from residential customers by volumetric

 

charges, from all other metered customers by per-meter charges, and

 

from unmetered customers by an appropriate charge, applied to

 

utility bills.

 

     (4) An alternative compliance payment under subsection (1)

 

shall only be used to fund energy optimization programs for that

 

provider's customers. To the extent feasible, charges collected

 

from a particular customer rate class and paid to the energy

 

optimization program administrator under subsection (1) shall be

 

devoted to energy optimization programs and services for that rate

 

class.

 

     (5) Money paid to the energy optimization program

 

administrator under subsection (1) and not spent by the

 

administrator that year shall remain available for expenditure the

 

following year, subject to the requirements of subsection (4).

 

     (6) The commission shall select a qualified nonprofit

 

organization to serve as an energy optimization program

 

administrator under this section, through a competitive bid

 

process.

 

     (7) The commission shall arrange for a biennial independent

 

audit of the energy optimization program administrator.

 

     Sec. 93. (1) An eligible electric customer is exempt from

 

charges the customer would otherwise incur as an electric customer

 

under section 89 or 91 if the customer files with its electric

 

provider and implements through December 31, 2015 a self-directed

 


energy optimization plan as provided in this section.

 

     (2) Subject to subsection (3), an electric customer is not

 

eligible under subsection (1) unless it is a commercial or

 

industrial electric customer and meets all of the following

 

requirements:

 

     (a) In 2009 or 2010, the customer must have had an annual peak

 

demand in the preceding year of at least 2 megawatts at each site

 

to be covered by the self-directed plan or 10 megawatts in the

 

aggregate at all sites to be covered by the plan.

 

     (b) In 2011, 2012, or 2013, the customer or customers must

 

have had an annual peak demand in the preceding year of at least 1

 

megawatt at each site to be covered by the self-directed plan or 5

 

megawatts in the aggregate at all sites to be covered by the plan.

 

     (c) In 2014 or any year thereafter, the customer or customers

 

must have had an annual peak demand in the preceding year of at

 

least 1 megawatt in the aggregate at all sites to be covered by the

 

self-directed plan.

 

     (3) The eligibility requirements of subsection (2) do not

 

apply to a commercial or industrial customer that installs or

 

modifies an electric energy efficiency improvement under a property

 

assessed clean energy program pursuant to the property assessed

 

clean energy act, 2010 PA 270, MCL 460.931 to 460.949.

 

     (4) The commission shall by order establish the rates, terms,

 

and conditions of service for customers related to this subpart.

 

     (5) The commission shall by order do all of the following:

 

     (a) Require a customer to utilize the services of an energy

 

optimization service company to develop and implement a self-

 


directed plan. This subdivision does not apply to a customer that

 

had an annual peak demand in the preceding year of at least 2

 

megawatts at each site to be covered by the self-directed plan or

 

10 megawatts in the aggregate at all sites to be covered by the

 

self-directed plan.

 

     (b) Provide a mechanism to recover from customers under

 

subdivision (a) the costs for provider level review and evaluation.

 

     (c) Provide a mechanism to cover the costs of the low income

 

energy optimization program under section 89.

 

     (6) All of the following apply to a self-directed energy

 

optimization plan under subsection (1):

 

     (a) The self-directed plan shall be a multiyear plan for an

 

ongoing energy optimization program.

 

     (b) The self-directed plan shall provide for aggregate energy

 

savings that each year meet or exceed the energy optimization

 

standards based on the electricity purchases in the previous year

 

for the site or sites covered by the self-directed plan.

 

     (c) Under the self-directed plan, energy optimization shall be

 

calculated based on annual electricity usage. Annual electricity

 

usage shall be normalized so that none of the following are

 

included in the calculation of the percentage of incremental energy

 

savings:

 

     (i) Changes in electricity usage because of changes in business

 

activity levels not attributable to energy optimization.

 

     (ii) Changes in electricity usage because of the installation,

 

operation, or testing of pollution control equipment.

 

     (d) The self-directed plan shall specify whether electricity

 


usage will be weather-normalized or based on the average number of

 

megawatt hours of electricity sold by the electric provider

 

annually during the previous 3 years to retail customers in this

 

state. Once the self-directed plan is submitted to the provider,

 

this option shall not be changed.

 

     (e) The self-directed plan shall outline how the customer

 

intends to achieve the incremental energy savings specified in the

 

self-directed plan.

 

     (7) A self-directed energy optimization plan shall be

 

incorporated into the relevant electric provider's energy

 

optimization plan. The self-directed plan and information submitted

 

by the customer under subsection (10) (9) are confidential and

 

exempt from disclosure under the freedom of information act, 1976

 

PA 442, MCL 15.231 to 15.246. Projected energy savings from

 

measures implemented under a self-directed plan shall be attributed

 

to the relevant provider's energy optimization programs for the

 

purposes of determining annual incremental energy savings achieved

 

by the provider. under section 77 or 81, as applicable.

 

     (8) Once a customer begins to implement a self-directed plan

 

at a site covered by the self-directed plan, that site is exempt

 

from energy optimization program charges under section 89 or 91 and

 

is not eligible to participate in the relevant electric provider's

 

energy optimization programs.

 

     (9) A customer implementing a self-directed energy

 

optimization plan under this section shall annually submit to the

 

customer's electric provider a brief report documenting the energy

 

efficiency measures taken under the self-directed plan during the

 


previous year, and the corresponding energy savings that will

 

result. The report shall provide sufficient information for the

 

provider and the commission to monitor progress toward the goals in

 

the self-directed plan and to develop reliable estimates of the

 

energy savings that are being achieved from self-directed plans.

 

The customer report shall indicate the level of incremental energy

 

savings achieved for the year covered by the report and whether

 

that level of incremental energy savings meets the goal set forth

 

in the customer's self-directed plan. If a customer submitting a

 

report under this subsection wishes to amend its self-directed

 

plan, the customer shall submit with the report an amended self-

 

directed plan. A report under this subsection shall be accompanied

 

by an affidavit from a knowledgeable official of the customer that

 

the information in the report is true and correct to the best of

 

the official's knowledge and belief. If the customer has retained

 

an independent energy optimization service company, the

 

requirements of this subsection shall be met by the energy

 

optimization service company.

 

     (10) An electric provider shall provide an annual report to

 

the commission that identifies customers implementing self-directed

 

energy optimization plans and summarizes the results achieved

 

cumulatively under those self-directed plans. The commission may

 

request additional information from the electric provider. If the

 

commission has sufficient reason to believe the information is

 

inaccurate or incomplete, it may request additional information

 

from the customer to ensure accuracy of the report.

 

     (11) If the commission determines after a contested case

 


hearing that the minimum energy optimization goals under subsection

 

(6)(b) have not been achieved at the sites covered by a self-

 

directed plan, in aggregate, the commission shall order the

 

customer or customers collectively to pay to this state an amount

 

calculated as follows:

 

     (a) Determine the proportion of the shortfall in achieving the

 

minimum energy optimization goals under subsection (6)(b).

 

     (b) Multiply the figure under subdivision (a) by the energy

 

optimization charges from which the customer or customers

 

collectively were exempt under subsection (1).

 

     (c) Multiply the product under subdivision (b) by a number not

 

less than 1 or greater than 2, as determined by the commission

 

based on the reasons for failure to meet the minimum energy

 

optimization goals.

 

     (12) If a customer has submitted a self-directed plan to an

 

electric provider, the customer, the customer's energy optimization

 

service company, if applicable, or the electric provider shall

 

provide a copy of the self-directed plan to the commission upon

 

request.

 

     (13) By September 1, 2010, following a public hearing, the

 

commission shall establish an approval process for energy

 

optimization service companies. The approval process shall ensure

 

that energy optimization service companies have the expertise,

 

resources, and business practices to reliably provide energy

 

optimization services that meet the requirements of this section.

 

The commission may adopt by reference the past or current standards

 

of a national or regional certification or licensing program for

 


energy optimization service companies. However, the approval

 

process shall also provide an opportunity for energy optimization

 

service companies that are not recognized by such a program to be

 

approved by posting a bond in an amount determined by the

 

commission and meeting any other requirements adopted by the

 

commission for the purposes of this subsection. The approval

 

process for energy optimization service companies shall require

 

adherence to a code of conduct governing the relationship between

 

energy optimization service companies and electric providers.

 

     (14) The department of energy, labor, and economic growth

 

licensing and regulatory affairs shall maintain on the department's

 

website a list of energy optimization service companies approved

 

under subsection (13).

 

     Sec. 95. (1) The commission shall do all of the following:

 

     (a) Promote load management in appropriate circumstances.

 

     (b) Actively pursue increasing public awareness of load

 

management techniques.

 

     (c) Engage in regional load management efforts to reduce the

 

annual demand for energy whenever possible.

 

     (d) Work with residential, commercial, and industrial

 

customers to reduce annual demand and conserve energy through load

 

management techniques and other activities it considers

 

appropriate. The commission shall file a report with the

 

legislature by December 31, 2010 on the effort to reduce peak

 

demand. The report shall also include any recommendations for

 

legislative action concerning load management that the commission

 

considers necessary.

 


     (2) The commission may allow a provider whose rates are

 

regulated by the commission to recover costs for load management

 

undertaken before January 1, 2016 pursuant to an energy

 

optimization plan through base rates as part of a proceeding under

 

section 6 of 1939 PA 3, MCL 460.6, if the costs are reasonable and

 

prudent and meet the utility systems resource cost test.

 

     (3) The commission shall do all of the following:

 

     (a) Promote energy efficiency and energy conservation.

 

     (b) Actively pursue increasing public awareness of energy

 

conservation and energy efficiency.

 

     (c) Actively engage in energy conservation and energy

 

efficiency efforts with providers.

 

     (d) Engage in regional efforts to reduce demand for energy

 

through energy conservation and energy efficiency.

 

     (e) By November 30, 2009, and each year thereafter, submit to

 

the standing committees of the senate and house of representatives

 

with primary responsibility for energy and environmental issues a

 

report on the effort to implement energy conservation and energy

 

efficiency programs or measures. The report may include any

 

recommendations of the commission for energy conservation

 

legislation.

 

     (4) This subpart does not limit the authority of the

 

commission, following an integrated resource plan proceeding and as

 

part of a rate-making process, to allow a provider whose rates are

 

regulated by the commission to recover for additional prudent

 

energy efficiency and energy conservation measures. not included in

 

the provider's energy optimization plan if the provider has met the

 


requirements of the energy optimization program.

 

     Enacting section 1. (1) Sections 1, 3, 7, 9, 11, and 39 of the

 

clean, renewable, and efficient energy act, 2008 PA 295, MCL

 

460.1001, 460.1003, 460.1007, 460.1009, 460.1011, and 460.1039, as

 

amended by this amendatory act, take effect 90 days after the date

 

this amendatory act is enacted into law. Section 29 of the clean,

 

renewable, and efficient energy act, 2008 PA 295, MCL 460.1029, is

 

repealed effective 90 days after the date this amendatory act is

 

enacted into law.

 

     (2) Sections 21, 27, 43, 89, 91, 93, and 95 of the clean,

 

renewable, and efficient energy act, 2008 PA 295, MCL 460.1021,

 

460.1027, 460.1043, 460.1089, 460.1091, 460.1093, and 460.1095, as

 

amended by this amendatory act, take effect January 1, 2016.

 

Sections 71 to 87 and 97 of the clean, renewable, and efficient

 

energy act, 2008 PA 295, MCL 460.1071 to 460.1087 and 460.1097, are

 

repealed effective January 1, 2016.

 

     (3) Sections 5, 13, and 45 of the clean, renewable, and

 

efficient energy act, 2008 PA 295, MCL 460.1005, 460.1013, and

 

460.1045, as amended by this amendatory act, take effect January 1,

 

2017. Sections 89, 91, and 93 of the clean, renewable, and

 

efficient energy act, 2008 PA 295, MCL 460.1089, 460.1091, and

 

460.1093, are repealed effective January 1, 2017.