HOUSE BILL No. 4298

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

 

     A bill to amend 1939 PA 3, entitled

 

"An act to provide for the regulation and control of public and

certain private utilities and other services affected with a public

interest within this state; to provide for alternative energy

suppliers; to provide for licensing; to include municipally owned

utilities and other providers of energy under certain provisions of

this act; to create a public service commission and to prescribe

and define its powers and duties; to abolish the Michigan public

utilities commission and to confer the powers and duties vested by

law on the public service commission; to provide for the

continuance, transfer, and completion of certain matters and

proceedings; to abolish automatic adjustment clauses; to prohibit

certain rate increases without notice and hearing; to qualify

residential energy conservation programs permitted under state law

for certain federal exemption; to create a fund; to provide for a

restructuring of the manner in which energy is provided in this

state; to encourage the utilization of resource recovery

facilities; to prohibit certain acts and practices of providers of

energy; to allow for the securitization of stranded costs; to

reduce rates; to provide for appeals; to provide appropriations; to

declare the effect and purpose of this act; to prescribe remedies

and penalties; and to repeal acts and parts of acts,"

 

by amending the title and sections 6a, 6b, 6l, 6m, 6s, 10, 10a, 10c,

 

10e, 10g, 10q, 10t, and 10y (MCL 460.6a, 460.6b, 460.6l, 460.6m,

 

460.6s, 460.10, 460.10a, 460.10c, 460.10e, 460.10g, 460.10q,

 

460.10t, and 460.10y), the title as amended by 2005 PA 190,

 

sections 6a, 10, 10a, 10g, and 10y as amended and section 6s as

 

added by 2008 PA 286, section 6b as amended by 1982 PA 212, section

 

6l as amended and sections 10c, 10e, 10q, and 10t as added by 2000

 

PA 141, and section 6m as amended by 2014 PA 170, and by adding

 

section 6t; and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     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 prescribe the power and duties of certain state agencies;

 

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.

 

     Sec. 6a. (1) A gas or electric utility shall not increase its

 

rates and charges or alter, change, or amend any rate or rate

 

schedules, the effect of which will be to increase the cost of

 

services to its customers, without first receiving commission

 

approval as provided in this section. The utility shall place in

 

evidence facts relied upon to support the utility's petition or

 

application to increase its rates and charges, or to alter, change,

 

or amend any rate or rate schedules. The commission shall require

 

notice to be given to all interested parties within the service

 

area to be affected, and all interested parties shall have a

 

reasonable opportunity for a full and complete hearing. A utility

 

may use projected costs and revenues for a future consecutive 12-

 

month period in developing its requested rates and charges. The

 

commission shall notify the utility within 30 days of filing,

 

whether the utility's petition or application is complete. A

 

petition or application is considered complete if it complies with

 

the rate application filing forms and instructions adopted under

 

subsection (6). A petition or application pending before the

 

commission prior to before the adoption of filing forms and

 

instructions pursuant to under subsection (6) shall be evaluated

 

based upon the filing requirements in effect at the time the

 

petition or application was filed. If the application is not

 

complete, the commission shall notify the utility of all

 

information necessary to make that filing complete. If the

 

commission has not notified the utility within 30 days of whether

 

the utility's petition or application is complete, the application

 

is considered complete. If the commission has not issued an order

 

within 180 days of the filing of a complete application, the

 

utility may implement up to the amount of the proposed annual rate

 

request through equal percentage increases or decreases applied to

 

all base rates. For a petition or application pending before the

 

commission prior to the effective date of the amendatory act that

 

added this sentence, the 180-day period commences on the effective

 

date of the amendatory act that added this sentence. If the utility

 

uses projected costs and revenues for a future period in developing

 

its requested rates and charges, the utility may not implement the

 

equal percentage increases or decreases prior to the calendar date

 

corresponding to the start of the projected 12-month period. For

 

good cause, the commission may issue a temporary order preventing

 

or delaying a utility from implementing its proposed rates or

 

charges. If a utility implements increased rates or charges under

 

this subsection before the commission issues a final order, that

 

utility shall refund to customers, with interest, any portion of

 

the total revenues collected through application of the equal

 

percentage increase that exceed the total that would have been

 

produced by the rates or charges subsequently ordered by the

 

commission in its final order. The commission shall allocate any

 

refund required by this section among primary customers based upon

 

their pro rata share of the total revenue collected through the

 

applicable increase, and among secondary and residential customers

 

in a manner to be determined by the commission. The rate of

 

interest for refunds shall equal 5% plus the London interbank

 

offered rate (LIBOR) for the appropriate time period. For any

 

portion of the refund which, exclusive of interest, exceeds 25% of

 

the annual revenue increase awarded by the commission in its final

 

order, the rate of interest shall be the authorized rate of return

 

on the common stock of the utility during the appropriate period.

 

Any refund or interest awarded under this subsection shall not be

 

included, in whole or in part, in any application for a rate

 

increase by a utility. The commission shall use a refund process

 

for any electric and gas rate overcharges under this section,

 

whatever the cause of the overcharge, that returns to customers a

 

refund of the amount the customer was overcharged, plus fair and

 

reasonable interest for the period the customer was overcharged.

 

The refund requirements of this section do not apply to an energy

 

utility organized as a cooperative corporation under sections 98 to

 

109 of 1931 PA 327, MCL 450.98 to 450.109. Nothing in this section

 

impairs the commission's ability to issue a show cause order as

 

part of its rate-making authority. An alteration or amendment in

 

rates or rate schedules applied for by a public utility that will

 

not result in an increase in the cost of service to its customers

 

may be authorized and approved without notice or hearing. There

 

shall be no increase in rates based upon changes in cost of fuel or

 

purchased gas unless notice has been given within the service area

 

to be affected, and there has been an opportunity for a full and

 

complete hearing on the cost of fuel or purchased gas. The rates

 

charged by any utility pursuant to under an automatic fuel or

 

purchased gas adjustment clause shall not be altered, changed, or

 

amended unless notice has been given within the service area to be

 

affected, and there has been an opportunity for a full and complete

 

hearing on the cost of the fuel or purchased gas.

 

     (2) The commission shall adopt rules and procedures for the

 

filing, investigation, and hearing of petitions or applications to

 

increase or decrease utility rates and charges as the commission

 

finds necessary or appropriate to enable it to reach a final

 

decision with respect to petitions or applications within a period

 

of 12 10 months from the filing of the complete petitions or

 

applications. The commission shall not authorize or approve

 

adjustment clauses that operate without notice and an opportunity

 

for a full and complete hearing, and all such clauses shall be are

 

abolished. The commission may hold a full and complete hearing to

 

determine the cost of fuel, purchased gas, or purchased power

 

separately from a full and complete hearing on a general rate case

 

and may be held hold that hearing concurrently with the general

 

rate case. The commission shall authorize a utility to recover the

 

cost of fuel, purchased gas, or purchased power only to the extent

 

that the purchases are reasonable and prudent. As used in this

 

section:

 

     (a) "Full and complete hearing" means a hearing that provides

 

interested parties a reasonable opportunity to present and cross-

 

examine evidence and present arguments relevant to the specific

 

element or elements of the request that are the subject of the

 

hearing.

 

     (b) "General rate case" means a proceeding initiated by a

 

utility in an application filed with the commission that alleges a

 

revenue deficiency and requests an increase in the schedule of

 

rates or charges based on the utility's total cost of providing

 

service.

 

     (3) Except as otherwise provided in this subsection, if the

 

commission fails to reach a final decision with respect to a

 

completed petition or application to increase or decrease utility

 

rates within the 12-month 10-month period following the filing of

 

the completed petition or application, the petition or application

 

is considered approved. If a utility makes any significant

 

amendment to its filing, the commission has an additional 12 10

 

months from the date of the amendment to reach a final decision on

 

the petition or application. If the utility files for an extension

 

of time, the commission shall extend the 12-month 10-month period

 

by the amount of additional time requested by the utility.

 

     (4) A utility shall not file a general rate case application

 

for an increase in rates earlier than 12 months after the date of

 

the filing of a complete prior general rate case application. A

 

utility may not file a new general rate case application until the

 

commission has issued a final order on a prior general rate case or

 

until the rates are approved under subsection (3).

 

     (5) The commission shall, if requested by a gas utility,

 

establish load retention transportation rate schedules or approve

 

gas transportation contracts as required for the purpose of

 

retaining industrial or commercial customers whose individual

 

annual transportation volumes exceed 500,000 decatherms on the gas

 

utility's system. The commission shall approve these rate schedules

 

or approve transportation contracts entered into by the utility in

 

good faith if the industrial or commercial customer has the

 

installed capability to use an alternative fuel or otherwise has a

 

viable alternative to receiving natural gas transportation service

 

from the utility, the customer can obtain the alternative fuel or

 

gas transportation from an alternative source at a price which that

 

would cause them to cease using the gas utility's system, and the

 

customer, as a result of their use of the system and receipt of

 

transportation service, makes a significant contribution to the

 

utility's fixed costs. The commission shall adopt accounting and

 

rate-making policies to ensure that the discounts associated with

 

the transportation rate schedules and contracts are recovered by

 

the gas utility through charges applicable to other customers if

 

the incremental costs related to the discounts are no greater than

 

the costs that would be passed on to those customers as the result

 

of a loss of the industrial or commercial customer's contribution

 

to a utility's fixed costs.

 

     (6) Within 90 days of the effective date of the amendatory act

 

that added this subsection, the The commission shall adopt standard

 

rate application filing forms and instructions for use in all

 

general rate cases filed by utilities whose rates are regulated by

 

the commission. For cooperative electric utilities whose rates are

 

regulated by the commission, in addition to rate applications filed

 

under this section, the commission shall continue to allow for rate

 

filings based on the cooperative's times interest earned ratio. The

 

commission may, in its discretion, modify the standard rate

 

application forms and instructions adopted under this subsection.

 

     (7) If, on or before January 1, 2008, a merchant plant entered

 

into a contract with an initial term of 20 years or more to sell

 

electricity to an electric utility whose rates are regulated by the

 

commission with 1,000,000 or more retail customers in this state

 

and if, prior to before January 1, 2008, the merchant plant

 

generated electricity under that contract, in whole or in part,

 

from wood or solid wood wastes, then the merchant plant shall, upon

 

petition by the merchant plant, and subject to the limitation set

 

forth in subsection (8), recover the amount, if any, by which the

 

merchant plant's reasonably and prudently incurred actual fuel and

 

variable operation and maintenance costs exceed the amount that the

 

merchant plant is paid under the contract for those costs. This

 

subsection does not apply to landfill gas plants, hydro plants,

 

municipal solid waste plants, or to merchant plants engaged in

 

litigation against an electric utility seeking higher payments for

 

power delivered pursuant to contract.

 

     (8) The total aggregate additional amounts recoverable by

 

merchant plants pursuant to under subsection (7) in excess of the

 

amounts paid under the contracts shall not exceed $1,000,000.00 per

 

month for each affected electric utility. The $1,000,000.00 per

 

month limit specified in this subsection shall be reviewed by the

 

commission upon petition of the merchant plant filed no more than

 

once per year and may be adjusted if the commission finds that the

 

eligible merchant plants reasonably and prudently incurred actual

 

fuel and variable operation and maintenance costs exceed the amount

 

that those merchant plants are paid under the contract by more than

 

$1,000,000.00 per month. The annual amount of the adjustments shall

 

not exceed a rate equal to the United States consumer price index.

 

An adjustment shall not be made by the commission unless each

 

affected merchant plant files a petition with the commission. As

 

used in this subsection, "United States consumer price index" means

 

the United States consumer price index for all urban consumers as

 

defined and reported by the United States department of labor,

 

bureau of labor statistics. If the total aggregate amount by which

 

the eligible merchant plants reasonably and prudently incurred

 

actual fuel and variable operation and maintenance costs determined

 

by the commission exceed the amount that the merchant plants are

 

paid under the contract by more than $1,000,000.00 per month, the

 

commission shall allocate the additional $1,000,000.00 per month

 

payment among the eligible merchant plants based upon the

 

relationship of excess costs among the eligible merchant plants.

 

The $1,000,000.00 limit specified in this subsection, as adjusted,

 

shall does not apply with respect to actual fuel and variable

 

operation and maintenance costs that are incurred due to changes in

 

federal or state environmental laws or regulations that are

 

implemented after the effective date of the amendatory act that

 

added this subsection. October 6, 2008. The $1,000,000.00 per month

 

payment limit under this subsection shall does not apply to

 

merchant plants eligible under subsection (7) whose electricity is

 

purchased by a utility that is using wood or wood waste or fuels

 

derived from those materials for fuel in their power plants.

 

     (9) The commission shall issue orders to permit the recovery

 

authorized under subsections (7) and (8) upon petition of the

 

merchant plant. The merchant plant shall is not be required to

 

alter or amend the existing contract with the electric utility in

 

order to obtain the recovery under subsections (7) and (8). The

 

commission shall permit or require the electric utility whose rates

 

are regulated by the commission to recover from its ratepayers all

 

fuel and variable operation and maintenance costs that the electric

 

utility is required to pay to the merchant plant as reasonably and

 

prudently incurred costs.

 

     (10) As used in this section:

 

     (a) "Full and complete hearing" means a hearing that provides

 

interested parties a reasonable opportunity to present and cross-

 

examine evidence and present arguments relevant to the specific

 

element or elements of the request that are the subject of the

 

hearing.

 

     (b) "General rate case" means a proceeding initiated by a

 

utility in an application filed with the commission that alleges a

 

revenue deficiency and requests an increase in the schedule of

 

rates or charges based on the utility's total cost of providing

 

service.

 

     Sec. 6b. If the rates of any gas utility shall be are based,

 

among other considerations, upon the cost of natural gas purchased

 

by said the gas utility which that is in turn distributed by said

 

the gas utility to the public served by it, and the cost for such

 

the gas is regulated by the federal energy regulatory commission,

 

the Michigan public service commission shall have has the authority

 

set forth in this section. In any proceeding to increase the rates

 

and charges or to alter, change, or amend any rate or rate schedule

 

of a gas utility, the Michigan public service commission shall be

 

is permitted to and shall receive in evidence the rates, charges,

 

classifications, and schedules on file with the federal energy

 

regulatory commission whereby the cost of gas purchased or received

 

by such the gas utility is fixed and determined. If, while such

 

that proceeding is pending before the Michigan public service

 

commission, a proceeding shall be is instituted or be pending

 

before said the federal energy regulatory commission, or on appeal

 

therefrom from the federal energy regulatory commission in a court

 

having jurisdiction, with respect to or affecting the cost of gas

 

payable by such the gas utility, said Michigan the public service

 

commission shall consider as an item of operating expense to said

 

the gas utility the cost of gas set forth in said the rates,

 

charges, classifications, and schedules on file with the federal

 

energy regulatory commission. If the cost of gas payable by said

 

the gas utility shall be is reduced by the final order of the

 

federal energy regulatory commission or the final decree of the

 

court, if appealed thereto, to a court, and the Michigan public

 

service commission shall have has entered an order approving rates

 

to said the gas utility as aforesaid based upon the cost of gas set

 

forth in the rates, charges, classifications, and schedules on file

 

with the federal energy regulatory commission which were later

 

reduced, as above set forth, the Michigan public service commission

 

upon its own motion or upon complaint and after notice and hearing

 

may proceed to order a refund to the gas utility's customers of any

 

sums refunded to the said gas utility for the period subsequent to

 

the effective date of the Michigan public service commission order

 

approving rates for the gas utility. as above set forth. No Any gas

 

refunds shall be returned to each customer in the manner and amount

 

that the sums were charged to the customer so as to accurately

 

refund to that customer the amount that customer was overcharged,

 

plus fair and reasonable interest for the period the customer was

 

overcharged. A member of this the 81st Legislature shall not accept

 

an employment position with any utility in this state within 2

 

years after vacating his or her legislative office.

 

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

 

and 6k, this section and section 6m shall provide means of insuring

 

equitable representation of the interests of energy utility

 

customers.

 

     (2) As used in this section and section 6m:

 

     (a) "Annual receipts" means the payments received by the fund

 

under section 6m(2)(a) and (b) during a calendar year.

 

     (b) "Board" means the utility consumer participation

 

protection board created under subsection (3).

 

     (c) "Department" means the department of management and

 

budget.licensing and regulatory affairs.

 

     (d) "Energy cost recovery proceeding" means any proceeding to

 

establish or implement a gas cost recovery clause or a power supply

 

cost recovery clause as provided in sections 6h, 6i, 6j, or 6k, to

 

set gas cost recovery factors pursuant to under section 6h(17), or

 

to set power supply cost recovery factors pursuant to under section

 

6j(18).

 

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

 

regulated by the public service commission.

 

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

 

created in section 6m.

 

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

 

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

 

apartment which that has normal household facilities such as a

 

bathroom, individual cooking facilities, and kitchen sink

 

facilities. Household does not include a penal or corrective

 

institution, or a motel, hotel, or other similar structure if used

 

as a transient dwelling.

 

     (h) "Jurisdictional" means subject to rate regulation by the

 

Michigan public service commission.

 

     (i) "Net grant proceeds" means the annual receipts of the fund

 

less the amounts reserved for the attorney general's use and the

 

amounts expended for board expenses and operation.

 

     (j) "Residential energy utility consumer" or "consumer" means

 

a customer of an energy utility who receives utility service for

 

use within an individual household or an improvement reasonably

 

appurtenant to and normally associated with an individual

 

household.

 

     (k) "Residential tariff sales" means those sales by an energy

 

utility which that are subject to residential tariffs on file with

 

the public service commission.

 

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

 

proprietorship, partnership, association, corporation, or other

 

entity which that receives utility service ordinarily and primarily

 

for use in connection with the manufacture, sale, or distribution

 

of goods or the provision of services, but does not include a

 

nonprofit organization representing residential utility customers.

 

     (3) The utility consumer participation protection board is

 

created within the department and shall exercise its powers and

 

duties under this act independently of the department. The

 

procurement and related management functions of the commission

 

board shall be performed under the direction and supervision of the

 

department. The board shall consist of 5 members appointed by the

 

governor, 1 of whom shall be chosen from 1 or more lists of

 

qualified persons submitted by the attorney general.

 

     (4) For the purposes of subsection (5) only, "utility" means

 

an electric or gas company located in or outside of this state.

 

     (5) Each member of the board shall meet the following

 

requirements:

 

     (a) Shall be an advocate for the interests of residential

 

utility consumers, as demonstrated by the member's knowledge of and

 

support for consumer interests and concerns in general or

 

specifically related to utility matters.

 

     (b) Shall not be, or shall not have been within the 5 years

 

preceding appointment, a member of a governing body of, or employed

 

in a managerial or professional or consulting capacity by a any of

 

the following:

 

     (i) A utility or an association representing utilities. ; an

 

     (ii) An enterprise or professional practice which that received

 

over $1,500.00 in the year preceding the appointment as a supplier

 

of goods or services to a utility or association representing

 

utilities. ; or an

 

     (iii) An organization representing employees of such a utility,

 

association, enterprise, or professional practice described in

 

subparagraph (i) or (ii), or an association which that represents

 

such an organization.

 

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

 

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

 

a utility, an association representing utilities, or an enterprise

 

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

 

year preceding the appointment as a supplier of goods or services

 

to a utility or association representing utilities.

 

     (d) Shall not be an officer or director of an applicant for a

 

grant under section 6m.

 

     (e) Shall not be a member of the immediate family of a person

 

an individual who would be ineligible under subdivisions (a), (b),

 

(c), or (d).

 

     (6) The Until December 31, 2016, the members of the board

 

shall be appointed for 2-year terms beginning with the first day of

 

a legislative session in an odd-numbered year and ending on the day

 

before the first day of the legislative session in the next odd-

 

numbered year or when the members' successors are appointed,

 

whichever occurs later. Beginning January 1, 2017, the members of

 

the board shall be appointed for 4-year terms beginning with the

 

first day of a legislative session in an odd-numbered year. The

 

governor shall not appoint a member to the board for a term

 

commencing after the governor's term of office has ended. A vacancy

 

shall be filled in the same manner as the original appointment. If

 

the vacancy is created other than by expiration of a term, the

 

member shall be appointed for the balance of the unexpired term of

 

the member to be succeeded.

 

     (7) The governor shall remove a member of the board if that

 

member is absent for any reason from either 3 consecutive board

 

meetings or more than 50% of the meetings held by the board in a

 

calendar year. However, a person an individual who is removed due

 

to absenteeism is eligible for reappointment to fill a vacancy

 

which that occurs in the board membership. The governor also shall

 

remove a member of the board if the member is subsequently

 

determined to be ineligible under subsection (5).

 

     (8) The board shall hold bimonthly meetings and additional

 

meetings as necessary. A quorum consists of 3 members. A majority

 

vote of the members appointed and serving is necessary for a

 

decision. At its first meeting following the appointment of new

 

members, or as soon as possible after the first meeting, the board

 

shall elect biennially from its membership a chairperson and a

 

vice-chairperson.

 

     (9) The board shall not act directly to represent the

 

interests of residential utility consumers except through

 

administration of the fund and grant program under this section.

 

     (10) The business which that the board may perform shall be

 

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

 

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

 

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

 

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

 

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

 

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

 

267, MCL 15.261 to 15.275.

 

     (11) A writing prepared, owned, used, in the possession of, or

 

retained by the board in the performance of an official function

 

shall be made available to the public in compliance with the

 

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

 

being sections 15.231 to 15.246 of the Michigan Compiled Laws.1976

 

PA 442, MCL 15.231 to 15.246.

 

     (12) A member of the board may be reimbursed for actual and

 

necessary expenses, including travel expenses to and from each

 

meeting held by the board, incurred in discharging the member's

 

duties under this section and section 6m. In addition to expense

 

reimbursement, a board member may receive remuneration from the

 

board of $100.00 per meeting attended, not to exceed $1,000.00 in a

 

calendar year. These limits shall be adjusted proportionately to an

 

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

 

for changes in the cost of living.

 

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

 

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

 

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

 

shall serve as temporary administrator of the fund and exercise all

 

duties and powers of the board.

 

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

 

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

 

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

 

money in the fund. The money in the fund shall be invested in the

 

bonds, notes, and other evidences of indebtedness issued or insured

 

by the United States government and its agencies, and in prime

 

commercial paper. The state treasurer shall release money from the

 

fund, including interest earned, in the manner and at the time

 

directed by the board.

 

     (2) Except as provided in subsection (6), each energy utility

 

that has applied to the public service commission for the

 

initiation of an energy cost recovery proceeding shall remit to the

 

fund before or upon filing its initial application for that

 

proceeding, and on or before the first anniversary of that

 

application, an amount of money determined by the board in the

 

following manner:

 

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

 

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

 

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

 

the same proportion as the company's jurisdictional 1981 total

 

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

 

jurisdictional 1981 total operating revenues of all energy utility

 

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

 

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

 

general for the purposes described in subsection (17).

 

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

 

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

 

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

 

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

 

revenues from residential tariff sales bear to the jurisdictional

 

1981 gross revenues from residential tariff sales of all energy

 

utility companies serving at least 100,000 residential customers in

 

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

 

(11).

 

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

 

are operating expenses of the utility that the public service

 

commission shall permit the utility to charge to its customers.

 

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

 

expenses of the utility that the public service commission shall

 

permit the utility to charge to its residential customers.

 

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

 

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

 

index known as the consumer price index for urban wage earners and

 

clerical workers, select areas, all items indexed, for the Detroit

 

standard metropolitan statistical area, compiled by the bureau of

 

labor statistics of the United States department of labor, or any

 

successor agency, that has occurred between January 1981 and

 

January of the year in which the payment is required to be made. In

 

the event that more than 1 such index is compiled, the index

 

yielding the largest payment shall be the maximum allowable factor.

 

The board shall advise utilities of the factor.

 

     (5) On or before the second and succeeding anniversaries of

 

its initial application for an energy cost recovery proceeding, an

 

energy utility shall remit to the board amounts equal to 5/6 of the

 

amounts required under subsection (2).

 

     (6) The remittance requirements of this section do not apply

 

to an energy utility organized as a cooperative corporation under

 

sections 98 to 109 of 1931 PA 327, MCL 450.98 to 450.109, and

 

grants from the fund shall not be used to participate in an energy

 

cost recovery proceeding primarily affecting such a utility.

 

     (7) In the event of a dispute between the board and an energy

 

utility about the amount of payment due, the utility shall pay the

 

undisputed amount and, if the utility and the board cannot agree,

 

the board may initiate civil action in the circuit court for Ingham

 

county for recovery of the disputed amount. The commission shall

 

not accept or take action on an application for an energy cost

 

recovery proceeding from an energy utility subject to this section

 

that has not fully paid undisputed remittances required by this

 

section.

 

     (8) The commission shall not accept or take action on an

 

application for an energy cost recovery proceeding from an energy

 

utility subject to this section until 30 days after it the

 

commission has been notified by the board or the director of the

 

energy administration, if section 6l(13) is applicable, that the

 

board or the director is ready to process grant applications , will

 

transfer funds payable to the attorney general immediately upon the

 

receipt of those funds, and will within 30 days approve grants and

 

remit funds to qualified grant applicants.

 

     (9) The board may accept a gift or grant from any source to be

 

deposited in the fund if the conditions or purposes of the gift or

 

grant are consistent with this section.

 

     (10) The costs of operation and expenses incurred by the board

 

in performing its duties under this section and section 6l,

 

including remuneration to board members, shall be paid from the

 

fund. A maximum of 5% of the annual receipts of the fund may be

 

budgeted and used to pay expenses other than grants made under

 

subsection (11).

 

     (11) The net grant proceeds shall finance a grant program from

 

which the board may award to an applicant an amount that the board

 

determines shall be used for the purposes set forth in this

 

section.

 

     (12) The board shall create and make available to applicants

 

an application form. Each applicant shall indicate on the

 

application how the applicant meets the eligibility requirements

 

provided for in this section and how the applicant proposes to use

 

a grant from the fund to participate in 1 or more proceedings as

 

authorized in subsection (17) that have been or are expected to be

 

filed. The board shall receive an application requesting a grant

 

from the fund only from a nonprofit organization or a unit of local

 

government in this state. The board shall consider only

 

applications for grants containing proposals that are consistent

 

with subsections (17) and (18) and that serve the interests of

 

residential utility consumers. For purposes of making grants, the

 

board may consider protection of the environment, energy

 

conservation, the creation of employment and a healthy economy in

 

the state, lower costs for residential customers, and the

 

maintenance of adequate energy resources. The board shall not

 

consider an application that primarily benefits the applicant or a

 

service provided or administered by the applicant. The board shall

 

not consider an application from a nonprofit organization if 1 of

 

the organization's principal interests or unifying principles is

 

the welfare of a utility or its investors or employees, or the

 

welfare of 1 or more businesses or industries, other than farms not

 

owned or operated by a corporation, that receive utility service

 

ordinarily and primarily for use in connection with the profit-

 

seeking manufacture, sale, or distribution of goods or services.

 

Mere ownership of securities by a nonprofit organization or its

 

members does not disqualify an application submitted by that

 

organization.

 

     (13) The board shall encourage the representation of the

 

interests of identifiable types of residential utility consumers

 

whose interests may differ, including various social and economic

 

classes and areas of the state, and if necessary, may make grants

 

to more than 1 applicant whose applications are related to a

 

similar issue to achieve this type of representation. In addition,

 

the board shall consider and balance the following criteria in

 

determining whether to make a grant to an applicant:

 

     (a) Evidence of the applicant's competence, experience, and

 

commitment to advancing the interests of residential utility

 

consumers.

 

     (b) In the case of a nongovernmental applicant, the extent to

 

which the applicant is representative of or has a previous history

 

of advocating the interests of citizens, especially residential

 

utility consumers.

 

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

 

application on residential utility consumers, including the

 

immediate and long-term impacts of the proposal.

 

     (d) Evidence demonstrating the potential for continuity of

 

effort and the development of expertise in relation to the proposal

 

contained in the application.

 

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

 

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

 

that position or point of view prevailing.

 

     (14) As an alternative to choosing between 2 or more

 

applications that have similar proposals, the board may invite 2 or

 

more of the applicants to file jointly and award a grant to be

 

managed cooperatively.

 

     (15) The board shall make disbursements pursuant to a grant in

 

advance of an applicant's proposed actions as set forth in the

 

application if necessary to enable the applicant to initiate,

 

continue, or complete the proposed actions.

 

     (16) Any notice to utility customers and the general public of

 

hearings or other state proceedings in which grants from the fund

 

may be used shall contain a notice of the availability of the fund

 

and the address of the board.

 

     (17) The annual receipts and interest earned, less

 

administrative costs, may be used only for participation in

 

administrative and judicial proceedings under sections 6a, 6h, 6i,

 

6j, and 6k, in federal administrative and judicial proceedings that

 

directly affect the energy costs paid by Michigan energy utilities,

 

and in cost allocation and rate design proceedings initiated under

 

section 11(3). Amounts that have been in the fund more than 12

 

months may be retained in the fund for future grants, or may be

 

returned to energy utility companies or used to offset their future

 

remittances in proportion to their previous remittances to the

 

fund, as the board determines will best serve the interests of

 

consumers.

 

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

 

the fund:

 

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

 

the interests of energy utility customers or classes of energy

 

utility customers, and not for representation of merely individual

 

interests.

 

     (b) The board shall attempt to maintain a reasonable

 

relationship between the payments from a particular energy utility

 

and the benefits to consumers of that utility.

 

     (c) The board shall coordinate the funded activities of grant

 

recipients with those of the attorney general to avoid duplication

 

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

 

the number of hearings and proceedings with intervenor

 

participation.

 

     (19) A recipient of a grant under subsection (11) may use the

 

grant only for the advancement of the proposed action approved by

 

the board, including, but not limited to, costs of staff, hired

 

consultants and counsel, and research.

 

     (20) A recipient of a grant under subsection (11) shall file a

 

report with the board within 90 days following the end of the year

 

or a shorter period for which the grant is made. The report shall

 

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

 

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

 

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

 

recipient. Expenditures shall be reported within the following

 

categories:

 

     (i) Employee and contract for services costs.

 

     (ii) Costs of materials and supplies.

 

     (iii) Filing fees and other costs required to effectively

 

represent residential utility consumers as provided in this

 

section.

 

     (b) Any additional information concerning uses of the grant

 

required by the board.

 

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

 

and senate committees on appropriations within 90 days following

 

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

 

information:

 

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

 

general of funds received under this section. Expenditures shall be

 

reported within the following categories:

 

     (i) Employee and contract for services costs.

 

     (ii) Costs of materials and supplies.

 

     (iii) Filing fees and other costs required to effectively

 

represent utility consumers as provided in this section.

 

     (b) Any additional information concerning uses of the funds

 

received under this section required by the committees.

 

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

 

shall submit a detailed report to the legislature regarding the

 

discharge of duties and responsibilities under this section and

 

section 6l during the preceding calendar year.

 

     (22) (23) By October 13, 1985, and at 3-year intervals

 

thereafter, a senate committee chosen by the majority leader of the

 

senate and a house committee chosen by the speaker of the house of

 

representatives shall review the relationship between costs and

 

benefits resulting from this section and sections 6h through 6l, and

 

may recommend changes to the legislature.

 

     Sec. 6s. (1) An electric utility that proposes to construct an

 

electric generation facility, make a significant investment in an

 

existing electric generation facility, purchase an existing

 

electric generation facility, or enter into a power purchase

 

agreement for the purchase of electric capacity for a period of 6

 

years or longer may submit an application to the commission seeking

 

a certificate of necessity for that construction, investment, or

 

purchase if that construction, investment, or purchase costs

 

$500,000,000.00 or more and a portion of the costs would be

 

allocable to retail customers in this state. A significant

 

investment in an electric generation facility includes a group of

 

investments reasonably planned to be made over a multiple year

 

period not to exceed 6 years for a singular purpose such as

 

increasing the capacity of an existing electric generation plant.

 

The commission shall not issue a certificate of necessity under

 

this section for any environmental upgrades to existing electric

 

generation facilities or for a renewable energy system.

 

     (2) The commission may implement separate review criteria and

 

approval standards for electric utilities with less than 1,000,000

 

retail customers who that seek a certificate of necessity for

 

projects costing less than $500,000,000.00.

 

     (3) An electric utility submitting an application under this

 

section may request 1 or more of the following:

 

     (a) A certificate of necessity that the power to be supplied

 

as a result of the proposed construction, investment, or purchase

 

is needed.

 

     (b) A certificate of necessity that the size, fuel type, and

 

other design characteristics of the existing or proposed electric

 

generation facility or the terms of the power purchase agreement

 

represent the most reasonable and prudent means of meeting that

 

power need.

 

     (c) A certificate of necessity that the price specified in the

 

power purchase agreement will be recovered in rates from the

 

electric utility's customers.

 

     (d) A certificate of necessity that the estimated purchase or

 

capital costs of and the financing plan for the existing or

 

proposed electric generation facility, including, but not limited

 

to, the costs of siting and licensing a new facility and the

 

estimated cost of power from the new or proposed electric

 

generation facility, will be recoverable in rates from the electric

 

utility's customers subject to subsection (4)(c).

 

     (4) Within 270 days of the filing of an application under this

 

section, the commission shall issue an order granting or denying

 

the requested certificate of necessity. The commission shall hold a

 

hearing on the application. The hearing shall be conducted as a

 

contested case pursuant to chapter 4 of the administrative

 

procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.287. The

 

commission shall allow intervention by interested persons.

 

Reasonable discovery shall be permitted before and during the

 

hearing in order to assist parties and interested persons in

 

obtaining evidence concerning the application, including, but not

 

limited to, the reasonableness and prudence of the construction,

 

investment, or purchase for which the certificate of necessity has

 

been requested. The commission shall grant the request if it

 

determines all of the following:

 

     (a) That the electric utility has demonstrated a need for the

 

power that would be supplied by the existing or proposed electric

 

generation facility or pursuant to the proposed power purchase

 

agreement through its approved integrated resource plan that

 

complies with subsection (11).

 

     (b) The information supplied indicates that the existing or

 

proposed electric generation facility will comply with all

 

applicable state and federal environmental standards, laws, and

 

rules.

 

     (c) The estimated cost of power from the existing or proposed

 

electric generation facility or the price of power specified in the

 

proposed power purchase agreement is reasonable. The commission

 

shall find that the cost is reasonable if, in the construction or

 

investment in a new or existing facility, to the extent it is

 

commercially practicable, the estimated costs are the result of

 

competitively bid engineering, procurement, and construction

 

contracts, or in a power purchase agreement, the cost is the result

 

of a competitive solicitation. Up to 150 days after an electric

 

utility makes its initial filing, it may file to update its cost

 

estimates if they have materially changed. No other aspect of the

 

initial filing may be modified unless the application is withdrawn

 

and refiled. A utility's filing updating its cost estimates does

 

not extend the period for the commission to issue an order granting

 

or denying a certificate of necessity. An affiliate of an electric

 

utility that serves customers in this state and at least 1 other

 

state may participate in the competitive bidding to provide

 

engineering, procurement, and construction services to that

 

electric utility for a project covered by this section.

 

     (d) The existing or proposed electric generation facility or

 

proposed power purchase agreement represents the most reasonable

 

and prudent means of meeting the power need relative to other

 

resource options for meeting power demand, including energy

 

efficiency programs and electric transmission efficiencies.

 

     (e) To the extent practicable, the construction or investment

 

in a new or existing facility in this state is completed using a

 

workforce composed of residents of this state as determined by the

 

commission. This subdivision does not apply to a facility that is

 

located in a county that lies on the border with another state.

 

     (5) The commission may consider any other costs or information

 

related to the costs associated with the power that would be

 

supplied by the existing or proposed electric generation facility

 

or pursuant to the proposed purchase agreement or alternatives to

 

the proposal raised by intervening parties.

 

     (6) In a certificate of necessity under this section, the

 

commission shall specify the costs approved for the construction of

 

or significant investment in the electric generation facility, the

 

price approved for the purchase of the existing electric generation

 

facility, or the price approved for the purchase of power pursuant

 

to the terms of the power purchase agreement.

 

     (7) The utility shall annually file, or more frequent if

 

required by the commission, reports to the commission regarding the

 

status of any project for which a certificate of necessity has been

 

granted under subsection (4), including an update concerning the

 

cost and schedule of that project.

 

     (8) If the commission denies any of the relief requested by an

 

electric utility, the electric utility may withdraw its application

 

or proceed with the proposed construction, purchase, investment, or

 

power purchase agreement without a certificate and the assurances

 

granted under this section.

 

     (9) Once the electric generation facility or power purchase

 

agreement is considered used and useful or as otherwise provided in

 

subsection (12), the commission shall include in an electric

 

utility's retail rates all reasonable and prudent costs for an

 

electric generation facility or power purchase agreement for which

 

a certificate of necessity has been granted. The commission shall

 

not disallow recovery of costs an electric utility incurs in

 

constructing, investing in, or purchasing an electric generation

 

facility or in purchasing power pursuant to a power purchase

 

agreement for which a certificate of necessity has been granted, if

 

the costs do not exceed the costs approved by the commission in the

 

certificate. Once the electric generation facility or power

 

purchase agreement is considered used and useful or as otherwise

 

provided in subsection (12), the commission shall include in the

 

electric utility's retail rates costs actually incurred by the

 

electric utility that exceed the costs approved by the commission

 

only if the commission finds that the additional costs are

 

reasonable and prudent. If the actual costs incurred by the

 

electric utility exceed the costs approved by the commission, the

 

electric utility has the burden of proving by a preponderance of

 

the evidence that the costs are reasonable and prudent. The portion

 

of the cost of a plant, facility, or power purchase agreement which

 

that exceeds 110% of the cost approved by the commission is

 

presumed to have been incurred due to a lack of prudence. The

 

commission may include any or all of the portion of the cost in

 

excess of 110% of the cost approved by the commission if the

 

commission finds by a preponderance of the evidence that the costs

 

were prudently incurred.

 

     (10) Within 90 days of the effective date of the amendatory

 

act that added this section, the The commission shall adopt

 

standard application filing forms and instructions for use in all

 

requests for a certificate of necessity under this section. The

 

commission may , in its discretion, modify the standard application

 

filing forms and instructions adopted under this section.

 

     (11) The commission shall establish standards for an

 

integrated resource plan that shall be filed by an electric utility

 

requesting a certificate of necessity under this section. every 5

 

years and approved by the commission after a contested case hearing

 

pursuant to chapter 4 of the administrative procedures act of 1969,

 

1969 PA 306, MCL 24.271 to 24.287. An integrated resource plan and

 

proceeding shall include all of the following:

 

     (a) A long-term forecast of the electric utility's load growth

 

under various reasonable scenarios.

 

     (b) The type of generation technology proposed for the any new

 

generation facility and the proposed capacity of the generation

 

facility, including projected fuel and regulatory costs under

 

various reasonable scenarios.

 

     (c) Projected energy and capacity purchased or produced by the

 

electric utility pursuant to any renewable portfolio standard.

 

     (d) Projected energy efficiency program savings under any

 

energy efficiency program requirements and the projected costs for

 

that program.

 

     (e) Projected load management and demand response savings for

 

the electric utility and the projected costs for those programs.

 

     (f) An analysis of the availability and costs of other

 

electric resources that could defer, displace, or partially

 

displace the any proposed generation facility or purchased power

 

agreement, including additional renewable energy, energy efficiency

 

programs, load management, and demand response, beyond those

 

amounts contained in subdivisions (c) to (e).

 

     (g) Electric transmission options for the electric utility.

 

     (h) Notice to each regional transmission organization serving

 

any portion of the utility's service area that the regional

 

transmission organization has standing to intervene in the

 

integrated resource plan proceeding and a request that the regional

 

transmission organization participate.

 

     (i) Notice to electric customers and potential resource

 

suppliers of the utility's proposed integrated resource plan and

 

their standing to participate in the proceeding.

 

     (j) The projected annual load for all customers and customer

 

classes connected to the utility's distribution system for at least

 

the next 10 years.

 

     (k) The electric utility's projected wholesale sales and

 

purchases of electricity.

 

     (l) The electric generating capacity located within the

 

electric utility's service area, including electric generating

 

facilities not owned by that electric utility.

 

     (m) The available transmission capacity and the cost of

 

additional transmission capacity that could be used to serve

 

customers within the utility's distribution service area.

 

     (n) The cost and reliability of resources located outside the

 

electric utility's distribution service area that could be used to

 

serve customers within the service area.

 

     (o) An analysis of the projected market prices for power

 

purchased under the rules of the midcontinent independent system

 

operator, or applicable regional transmission organization, as

 

compared to the costs of new electric generation facilities and new

 

electric transmission facilities.

 

     (p) The need for additional generating or transmission

 

capacity to maintain electric reliability or secure economic

 

advantages to the utility's full-service customers.

 

     (q) A regional and statewide evaluation of electric supply and

 

demand to identify sources outside of the electric utility service

 

area where power may be available.

 

     (r) The quantity and type of resources, including reserves,

 

required by the open access transmission and energy markets tariffs

 

of the regional transmission organization or the tariff of any

 

successor organization in which the electric utility participates,

 

and resources required by reliability standards or other

 

requirements imposed under the authority of an electric reliability

 

organization to which the electric utility is subject.

 

     (12) The commission shall allow financing interest cost

 

recovery in an electric utility's base rates on construction work

 

in progress for capital improvements approved under this section

 

prior to the assets being considered used and useful. Regardless of

 

whether or not the commission authorizes base rate treatment for

 

construction work in progress financing interest expense, an

 

electric utility shall be allowed to may recognize, accrue, and

 

defer the allowance for funds used during construction related to

 

equity capital.

 

     (13) As used in this section, "renewable energy system" means

 

that term as defined in section 11 of the clean, renewable, and

 

efficient energy act, 2008 PA 295, MCL 460.1011.

 

     Sec. 6t. (1) If the commission determines that compliance with

 

a new state or federal environmental standard, law, or rule or the

 

need for additional generation capacity will cost electric

 

utilities in this state $500,000,000.00 or more in total, the

 

commission shall commence on its own motion a proceeding for each

 

affected electric utility to adopt a capacity needs and

 

environmental regulation compliance plan for that utility.

 

     (2) The commission shall require each affected electric

 

utility to file a proposed plan under this section. An electric

 

utility shall include all of the following in a proposed plan:

 

     (a) Any expected need for additional generation capacity for

 

that electric utility.

 

     (b) Proposed supply-side and demand-side resources to address

 

any need for additional generation capacity, including, but not

 

limited to, the type of generation technology for any proposed

 

generation facility, projected energy efficiency savings, and

 

projected load management and demand response savings.

 

     (c) An analysis of the impact of any existing or proposed

 

state and federal environmental standards, laws, or rules on that

 

electric utility and how the electric utility's plan will meet

 

those requirements.

 

     (3) In a proceeding under this section, the department of

 

environmental quality shall file a statement that includes all of

 

the following:

 

     (a) Any new state or federal environmental standard, law, or

 

rule and how that standard, law, or rule would affect the electric

 

utility.

 

     (b) Any proposed state or federal environmental standard, law,

 

or rule and how the proposed standard, law, or rule would affect

 

the electric utility.

 

     (c) Whether the plan proposed by the electric utility under

 

subsection (2) would reasonably be expected to achieve compliance

 

with the standards, laws, or rules identified in subdivisions (a)

 

and (b).

 

     (d) Any alternative methods the electric utility could use to

 

achieve compliance with the standards, laws, or rules identified in

 

subdivisions (a) and (b).

 

     (4) Within 270 days of the filing of a plan under this

 

section, the commission shall issue an order granting, modifying,

 

or denying the requested plan. The commission shall hold a hearing

 

on the plan. The hearing shall be conducted as a contested case

 

pursuant to chapter 4 of the administrative procedures act of 1969,

 

1969 PA 306, MCL 24.271 to 24.287. The commission shall allow

 

intervention by interested persons. The commission shall permit

 

reasonable discovery before and during the hearing in order to

 

assist parties and interested persons in obtaining evidence

 

concerning the plan, including, but not limited to, the

 

reasonableness and prudence of the proposed plan. The commission

 

shall approve the plan if the commission determines all of the

 

following:

 

     (a) That the plan would maintain or increase electric

 

reliability in this state.

 

     (b) That the plan will comply with all applicable state and

 

federal environmental standards, laws, and rules.

 

     (c) That the plan represents the most reasonable and prudent

 

means of meeting the need for additional generation capacity or

 

meeting the state and federal environmental standards, laws, and

 

rules.

 

     (5) In approving a plan under this section, the commission

 

shall specify the costs approved for the investments needed to

 

comply with a plan under this section.

 

     (6) The electric utility shall annually file, or more

 

frequently if required by the commission, reports to the commission

 

regarding the status of any investments for a plan that has been

 

approved under subsection (4), including an update concerning the

 

cost and schedule of those investments.

 

     (7) Once the investment is considered used and useful or as

 

otherwise provided in subsection (8), the commission shall include

 

in an electric utility's retail rates all reasonable and prudent

 

costs for an investment for which a plan has been approved. The

 

commission shall not disallow recovery of costs an electric utility

 

incurs in investments for which a plan has been approved, if the

 

costs do not exceed the costs approved by the commission in the

 

plan. Once the investment is considered used and useful or as

 

otherwise provided in subsection (8), the commission shall include

 

in the electric utility's retail rates costs actually incurred by

 

the electric utility that exceed the costs approved by the

 

commission only if the commission finds that the additional costs

 

are reasonable and prudent. If the actual costs incurred by the

 

electric utility exceed the costs approved by the commission, the

 

electric utility has the burden of proving by a preponderance of

 

the evidence that the costs are reasonable and prudent. The portion

 

of the cost of the investment that exceeds 110% of the cost

 

approved by the commission is presumed to have been incurred due to

 

a lack of prudence. The commission may include any or all of the

 

portion of the cost in excess of 110% of the cost approved by the

 

commission if the commission finds by a preponderance of the

 

evidence that the costs were prudently incurred.

 

     (8) The commission shall allow financing interest cost

 

recovery in an electric utility's base rates on construction work

 

in progress for investments approved under this section prior to

 

the assets being considered used and useful.

 

     Sec. 10. (1) Sections 10 through 10bb shall be known and may

 

be cited as the "customer choice and electricity reliability act".

 

     (2) The purpose of sections 10a through 10bb is to do all of

 

the following:

 

     (a) To ensure that all retail customers in this state of

 

electric power have a choice of electric suppliers.

 

     (b) To allow and encourage the Michigan public service

 

commission to foster competition in this state in the provision of

 

electric supply and maintain regulation of electric supply for

 

customers who continue to choose supply from incumbent electric

 

utilities.

 

     (c) To encourage the development and construction of merchant

 

plants which will diversify the ownership of electric generation in

 

this state.

 

     (d) To ensure that all persons in this state are afforded

 

safe, reliable electric power at a reasonable rate.

 

     (e) To improve the opportunities for economic development in

 

this state and to promote financially healthy and competitive

 

utilities in this state.

 

     (f) To maintain, foster, and encourage robust, reliable, and

 

economic generation, distribution, and transmission systems to

 

provide this state's electric suppliers and generators an

 

opportunity to access regional sources of generation and wholesale

 

power markets and to ensure a reliable supply of electricity in

 

this state.Beginning on the effective date of the amendatory act

 

that added this sentence, both of the following apply to electric

 

service in this state:

 

     (a) Customers purchasing electricity from an electric utility

 

shall continue to receive electric service from that electric

 

utility.

 

     (b) Except as otherwise provided in this subdivision,

 

alternative electric suppliers shall not provide retail customers

 

with electric generation service or enter into agreements to

 

provide retail customers with electric generation service. Retail

 

customers currently purchasing electric generation service from an

 

alternative electric supplier must return to receiving electric

 

service from the incumbent electric utility when the primary term

 

of their existing agreement with the alternative electric supplier

 

expires. An alternative electric supplier shall not provide

 

electric generation service under an agreement entered into before

 

the effective date of the amendatory act that added this

 

subdivision, beyond the primary term of the agreement.

 

     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 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.

 

     (1) (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.

 

     (2) (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.(1).

 

     (3) (6) A utility offering a program under subsection (5) (2)

 

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.

 

     (4) (7) All costs directly attributable to an appliance

 

service program allowed under subsection (5) (2) 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.

 

     (5) (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).(4).

 

     (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.

 

     (6) (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) (4) 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.

 

     (7) (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.

 

     (8) (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.

 

     (9) (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.

 

     (10) (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.

 

     (11) (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 are not be abrogated, increased, or diminished

 

by this act, nor shall the receipt of any proceeds of the

 

securitization bonds by an electric utility be a basis for any

 

regulatory disallowance. Further, any securitization or financing

 

order issued by the commission that relates to a qualifying

 

facility's power purchase contract shall fully consider that

 

qualifying facility's legal and financial interests.

 

     (15) A customer who elects to receive service from an

 

alternative electric supplier may subsequently provide notice to

 

the electric utility of the customer's desire to receive standard

 

tariff service from the electric utility. The procedures in place

 

for each electric utility as of January 1, 2008 that set forth the

 

terms pursuant to which a customer receiving service from an

 

alternative electric supplier may return to full service from the

 

electric utility are ratified and shall remain in effect and may be

 

amended by the commission as needed. If an electric utility did not

 

have the procedures in place as of January 1, 2008, the commission

 

shall adopt those procedures.

 

     (12) (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.

 

     (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.

 

     (13) 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.

 

     Sec. 10c. (1) Except for a violation under section 10a(3) and

 

as otherwise provided under this section, upon a complaint or on

 

the commission's own motion, if the commission finds, after notice

 

and hearing, that an electric utility or an alternative electric

 

supplier has not complied with a provision or order issued under

 

sections 10 through 10bb, 10aa, the commission shall order such any

 

remedies and penalties as necessary to make whole a customer or

 

other person who has suffered damages as a result of the violation,

 

including, but not limited to, 1 or more of the following:

 

     (a) Order the electric utility or alternative electric

 

supplier to pay a fine for the first offense of not less than

 

$1,000.00 or more than $20,000.00. For a second offense, the

 

commission shall order the person to pay a fine of not less than

 

$2,000.00 or more than $40,000.00. For a third and any subsequent

 

offense, the commission shall order the person to pay a fine of not

 

less than $5,000.00 or more than $50,000.00.

 

     (b) Order a refund to the customer of any excess charges.

 

     (c) Order any other remedies that would make whole a person

 

harmed, including, but not limited to, payment of reasonable

 

attorney fees.

 

     (d) Revoke the license of the alternative electric supplier if

 

the commission finds a pattern of violations.

 

     (e) Issue cease and desist orders.

 

     (2) Upon a complaint or the commission's own motion, the

 

commission may conduct a contested case to review allegations of a

 

violation under section 10a(3).

 

     (3) If the commission finds that a person has violated section

 

10a(3), the commission shall order remedies and penalties to

 

protect customers and other persons who have suffered damages as a

 

result of the violation, including, but not limited to, 1 or more

 

of the following:

 

     (a) Order the person to pay a fine for the first offense of

 

not less than $20,000.00 or more than $30,000.00. For a second and

 

any subsequent offense, the commission shall order the person to

 

pay a fine of not less than $30,000.00 or more than $50,000.00. If

 

the commission finds that the second or any of the subsequent

 

offenses were knowingly made in violation of section 10a(3), the

 

commission shall order the person to pay a fine of not more than

 

$70,000.00. Each unauthorized action made in violation of section

 

10a(3) shall be a separate offense under this subdivision.

 

     (b) Order an unauthorized supplier to refund to the customer

 

any amount greater than the customer would have paid to an

 

authorized supplier.

 

     (c) Order an unauthorized supplier to reimburse an authorized

 

supplier an amount equal to the amount paid by the customer that

 

should have been paid to the authorized supplier.

 

     (d) Order the refund of any amounts paid by the customer for

 

unauthorized services.

 

     (e) Order a portion between 10% to 50% of the fine ordered

 

under subdivision (a) be paid directly to the customer who suffered

 

the violation under section 10a(3).

 

     (f) If the person is licensed under this act, revoke the

 

license if the commission finds a pattern of violations of section

 

10a(3).

 

     (g) Issue cease and desist orders.

 

     (4) Notwithstanding subsection (3), a fine shall not be

 

imposed for a violation of section 10a(3) if the supplier has

 

otherwise fully complied with section 10a(3) and shows that the

 

violation was an unintentional and bona fide error which occurred

 

notwithstanding the maintenance of procedures reasonably adopted to

 

avoid the error. Examples of a bona fide error include clerical,

 

calculation, computer malfunction, programming, or printing errors.

 

An error in legal judgment with respect to a supplier's obligations

 

under section 10a(3) is not a bona fide error. The burden of

 

proving that a violation was an unintentional and bona fide error

 

is on the supplier.

 

     (5) If the commission finds that a party's position in a

 

complaint filed under subsection (2) is frivolous, the commission

 

shall award to the prevailing party their costs, including

 

reasonable attorney fees, against the nonprevailing party and their

 

attorney.

 

     Sec. 10e. (1) An electric utility shall take all necessary

 

steps to ensure that merchant plants are connected to the

 

transmission and distribution systems within their operational

 

control. If the commission finds, after notice and hearing, that an

 

electric utility has prevented or unduly delayed the ability of the

 

plant to connect to the facilities of the utility, the commission

 

shall order remedies designed to make whole the merchant plant,

 

including, but not limited to, reasonable attorney fees. The

 

commission may also order fines of not more than $50,000.00 per day

 

that the electric utility is in violation of this subsection.

 

     (2) A merchant plant may sell its capacity to alternative

 

electric suppliers, electric utilities, municipal electric

 

utilities, retail customers, or other persons. A merchant plant

 

making sales to retail customers is an alternative electric

 

supplier and shall obtain a license under section 10a(2).

 

     (2) (3) The commission shall establish standards for the

 

interconnection of merchant plants with the transmission and

 

distribution systems of electric utilities. The standards shall not

 

require an electric utility to interconnect with generating

 

facilities with a capacity of less than 100 kilowatts for parallel

 

operations. The standards shall be consistent with generally

 

accepted industry practices and guidelines and shall be established

 

to ensure the reliability of electric service and the safety of

 

customers, utility employees, and the general public. The merchant

 

plant will be responsible for all costs associated with the

 

interconnection unless the commission has otherwise allocated the

 

costs and provided for cost recovery.

 

     (3) (4) This section does not apply to interconnections or

 

transactions that are subject to the jurisdiction of the federal

 

energy regulatory commission.

 

     Sec. 10g. (1) As used in sections 10 through 10bb:10aa:

 

     (a) "Alternative electric supplier" means a person selling

 

electric generation service to retail customers in this state.

 

Alternative electric supplier does not include a person who

 

physically delivers electricity directly to retail customers in

 

this state. An alternative electric supplier is not a public

 

utility.

 

     (b) "Commission" means the Michigan public service commission

 

created in section 1.

 

     (c) "Electric utility" means that term as defined in section 2

 

of the electric transmission line certification act, 1995 PA 30,

 

MCL 460.562.

 

     (d) "Independent transmission owner" means an independent

 

transmission company as that term is defined in section 2 of the

 

electric transmission line certification act, 1995 PA 30, MCL

 

460.562.

 

     (e) "Merchant plant" means electric generating equipment and

 

associated facilities with a capacity of more than 100 kilowatts

 

located in this state that are not owned and operated by an

 

electric utility.

 

     (f) "Relevant market" means either the Upper Peninsula or the

 

Lower Peninsula of this state.

 

     (g) "Renewable energy source" means energy generated by solar,

 

wind, geothermal, biomass, including waste-to-energy and landfill

 

gas, or hydroelectric.

 

     (2) A school district aggregating electricity for school

 

properties or an exclusive aggregator for public or private school

 

properties is not an electric utility or a public utility for the

 

purpose of that aggregation.

 

     Sec. 10q. (1) A person shall not engage in the business of an

 

alternative electric supplier in this state unless the person

 

obtains and maintains a license. issued under section 10a.

 

     (2) In addition to any other information required by the

 

commission in connection with a licensing application, the

 

applicant shall be required to do both of the following:

 

     (a) Provide information, including information as to the

 

applicant's safety record and its history of service quality and

 

reliability, as to the applicant's technical ability, as defined

 

under regulations of the commission, to safely and reliably

 

generate or otherwise obtain and deliver electricity and provide

 

any other proposed services.

 

     (b) Demonstrate that the employees of the applicant that will

 

be installing, operating, and maintaining generation or

 

transmission facilities within this state, or any entity with which

 

the applicant has contracted to perform those functions within this

 

state, have the requisite knowledge, skills, and competence to

 

perform those functions in a safe and responsible manner in order

 

to provide safe and reliable service.

 

     (3) The commission shall order the applicant to post a bond or

 

provide a letter of credit or other financial guarantee in a

 

reasonable amount established by the commission of not less than

 

$40,000.00, if the commission finds after an investigation and

 

review that the requirement of a bond would be in the public

 

interest.

 

     (4) Only investor-owned, cooperative, or municipal electric

 

utilities shall own, construct, or operate electric distribution

 

facilities or electric meter equipment used in the distribution of

 

electricity in this state. This subsection does not prohibit a

 

self-service power provider from owning, constructing, or operating

 

electric distribution facilities or electric metering equipment for

 

the sole purpose of providing or utilizing self-service power. This

 

act does not affect the current rights, if any, of a nonutility to

 

construct or operate a private distribution system on private

 

property or private easements. This does not preclude crossing of

 

public rights-of-way.

 

     (5) The commission shall not prohibit an electric utility from

 

metering and billing its customers for services provided by the

 

electric utility.

 

     Sec. 10t. (1) An electric utility or alternative electric

 

supplier shall not shut off service to an eligible customer during

 

the heating season for nonpayment of a delinquent account if the

 

customer is an eligible senior citizen customer or if the customer

 

pays to the utility or supplier a monthly amount equal to 7% of the

 

estimated annual bill for the eligible customer and the eligible

 

customer demonstrates, within 14 days of requesting shutoff

 

protection, that he or she has applied for state or federal heating

 

assistance. If an arrearage exists at the time an eligible customer

 

applies for protection from shutoff of service during the heating

 

season, the utility or supplier shall permit the customer to pay

 

the arrearage in equal monthly installments between the date of

 

application and the start of the subsequent heating season.

 

     (2) An electric utility or alternative electric supplier may

 

shut off service to an eligible low-income customer who does not

 

pay the monthly amounts required under subsection (1) after giving

 

notice in the manner required by rules. The utility or supplier is

 

not required to offer a settlement agreement to an eligible low-

 

income customer who fails to make the monthly payments required

 

under subsection (1).

 

     (3) If a customer fails to comply with the terms and

 

conditions of this section, an electric utility may shut off

 

service on its own behalf or on behalf of an alternative electric

 

supplier after giving the customer a notice, by personal service or

 

first-class mail, that contains all of the following information:

 

     (a) That the customer has defaulted on the winter protection

 

plan.

 

     (b) The nature of the default.

 

     (c) That unless the customer makes the payments that are past

 

due within 10 days of the date of mailing, the utility or supplier

 

may shut off service.

 

     (d) The date on or after which the utility or supplier may

 

shut off service, unless the customer takes appropriate action.

 

     (e) That the customer has the right to file a complaint

 

disputing the claim of the utility or supplier before the date of

 

the proposed shutoff of service.

 

     (f) That the customer has the right to request a hearing

 

before a hearing officer if the complaint cannot be otherwise

 

resolved and that the customer shall pay to the utility or supplier

 

that portion of the bill that is not in dispute within 3 days of

 

the date that the customer requests a hearing.

 

     (g) That the customer has the right to represent himself or

 

herself, to be represented by an attorney, or to be assisted by any

 

other person of his or her choice in the complaint process.

 

     (h) That the utility or supplier will not shut off service

 

pending the resolution of a complaint that is filed with the

 

utility in accordance with this section.

 

     (i) The telephone number and address of the utility or

 

supplier where the customer may make inquiry, enter into a

 

settlement agreement, or file a complaint.

 

     (j) That the customer should contact a social services agency

 

immediately if the customer believes he or she might be eligible

 

for emergency economic assistance.

 

     (k) That the utility or supplier will postpone shutoff of

 

service if a medical emergency exists at the customer's residence.

 

     (l) That the utility or supplier may require a deposit and

 

restoration charge if the supplier utility shuts off service for

 

nonpayment of a delinquent account.

 

     (4) An electric utility is not required to shut off service

 

under this section to an eligible customer for nonpayment to an

 

alternative electric supplier.

 

     (4) (5) The commission shall establish an educational program

 

to ensure that eligible customers are informed of the requirements

 

and benefits of this section.

 

     (5) (6) As used in this section:

 

     (a) "Eligible customer" means either an eligible low-income

 

customer or an eligible senior citizen customer.

 

     (b) "Eligible low-income customer" means a customer whose

 

household income does not exceed 150% of the poverty level, as

 

published by the United States department of health and human

 

services, or who receives any of the following:

 

     (i) Assistance from a state emergency relief program.

 

     (ii) Food stamps.

 

     (iii) Medicaid.

 

     (c) "Eligible senior citizen customer" means a utility or

 

supplier customer who is 65 years of age or older and who advises

 

the utility of his or her eligibility.

 

     Sec. 10y. (1) The governing body of a municipally owned

 

utility shall determine whether it will permit retail customers

 

receiving delivery service from the municipally owned utility the

 

opportunity of choosing an alternative electric supplier, subject

 

to the implementation of rates, charges, terms, and conditions