March 25, 2015, Introduced by Senator SHIRKEY and referred to the Committee on Energy and Technology.
A bill to amend 1939 PA 3, entitled
"An act to provide for the regulation and control of public and
certain private utilities and other services affected with a public
interest within this state; to provide for alternative energy
suppliers; to provide for licensing; to include municipally owned
utilities and other providers of energy under certain provisions of
this act; to create a public service commission and to prescribe
and define its powers and duties; to abolish the Michigan public
utilities commission and to confer the powers and duties vested by
law on the public service commission; to provide for the
continuance, transfer, and completion of certain matters and
proceedings; to abolish automatic adjustment clauses; to prohibit
certain rate increases without notice and hearing; to qualify
residential energy conservation programs permitted under state law
for certain federal exemption; to create a fund; to provide for a
restructuring of the manner in which energy is provided in this
state; to encourage the utilization of resource recovery
facilities; to prohibit certain acts and practices of providers of
energy; to allow for the securitization of stranded costs; to
reduce rates; to provide for appeals; to provide appropriations; to
declare the effect and purpose of this act; to prescribe remedies
and penalties; and to repeal acts and parts of acts,"
by amending the title and sections 6s, 10, 10a, and 10bb (MCL
460.6s, 460.10, 460.10a, and 460.10bb), the title as amended by
2005 PA 190, section 6s as added and sections 10 and 10a as amended
by 2008 PA 286, and section 10bb as added by 2000 PA 141.
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 require the competitive procurement of electric capacity
and energy; 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. 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, it was selected by the commission under
the competitive bid process in subsection (4), 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 the singular
purpose
such as of 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 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 including
the regional transmission organization, any electric customer or
association of customers, alternative electric suppliers, owners of
merchant plants, or others with information potentially relevant to
the proceeding, including, but not limited to, potentially
competitive electric suppliers of the electric utility. 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 previously 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.will be the
result of the competitive bid process established in this
subsection. The commission shall do all of the following:
(i) Establish a form of request for proposals to be employed by
the utility for the purpose of procuring needed resources.
(ii) Specify the evaluation criteria by which the preferred
proposal received under subparagraph (i) will be determined.
(iii) Establish a preferred form of contract or standardized
contract terms to be entered into by the selected electric supplier
and the electric utility.
(iv) Prescribe both of the following:
(A) The responsibilities and duties of an independent
third‑party evaluator selected by the commission to issue requests
for proposals, administer a request for proposals process, receive
proposals submitted in response to a request for proposals,
identify the proposal that best meets the evaluation criteria, and
recommend to the commission the selection of 1 or more proposals.
The cost of the independent third-party evaluator shall be assessed
as a cost of regulation under 1972 PA 299, MCL 460.111 to 460.120.
(B) The means by which the independent third-party evaluator
is selected and the time following submission of proposals within
which the independent evaluator shall recommend a proposal for
selection.
(v) Prescribe the conditions under which the electric utility
may submit a proposal in response to its own request for proposals.
The conditions shall ensure that an electric utility's use of
ratepayer—funded assets does not place other electric suppliers
submitting proposals at a competitive disadvantage and ensure that
the electric utility's participation is consistent with the
electric utility's code of conduct.
(vi) Prescribe the process for identification and approval of
proposals.
(vii) Prescribe the terms to be included in any contract
between an electric utility and an electric supplier that will
limit compensation to be received by the electric supplier to no
more than the compensation proposed.
(viii) Identify in the request for proposals what risks are to
be assumed by utility customers and what risks are to be assumed by
persons submitting proposals in connection with each resource to be
procured.
(ix) Prescribe criteria that will permit persons proposing to
provide demand-side management, transmission service, or generating
capacity, including distributed generating capacity, to fairly
compete to provide required resources.
(x) Provide reasonable means to assure that the request for
proposals process will be open and fair to all participating
parties.
(xi) Provide that, after the commission has selected a
proposal, all proposals submitted, except the selected proposal,
are confidential and exempt from disclosure under the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(xii) Provide that, in considering the relative cost of new
generating resources, all of the following are considered a part of
the cost of generation:
(A) The cost of transmitting power to the electric utility.
(B) The fuel cost.
(C) The expected useful life of the resource.
(D) The potential opportunity costs, based on the service life
of the resource, in relation to other developing technologies and
innovations.
(E) The net present value of the cost to decommission the
resource at the end of its service life.
(xiii) Provide for all of the following:
(A) Within the time prescribed by the commission, the
independent evaluator shall recommend to the commission 1 or more
proposals for selection.
(B) The commission shall post the recommendation on the
commission's Internet website and mail copies to each party to the
proceeding in which the commission determined the utility's
resource needs and to each electric supplier submitting a proposal.
(C) Allow any person or electric supplier notified under sub-
subparagraph (B), within 15 days of the date the recommendation is
posted, to submit comments on the independent evaluator's
recommendation or request commission review of the process of
requesting, receiving, and selecting proposals.
(D) Within 30 days of the date the recommendation is posted,
the commission shall by order select the proposal most advantageous
to the utility's customers unless the utility or electric supplier
committed fraud or the independent evaluator failed to follow
commission procedures and the failure was materially detrimental to
the utility's customers.
(E) That the utility and the electric supplier submitting the
selected proposal shall, not later than 5 days after the
commission's order selecting a proposal, execute a contract setting
forth all terms and conditions of the request for proposals except
to the extent they have been modified in the selected proposal.
(F) That, if the order has not been stayed or suspended by a
competent court within 30 days after the date of the order, the
contract is a valid and binding contract according to its terms,
notwithstanding that the commission's procedures or selection is
later vacated, modified, or otherwise held to be invalid in whole
or in part.
(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), (13), 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), (13), 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
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. 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 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 it has standing to
intervene in the integrated resource plan proceeding and a request
that the regional transmission organization participate.
(i) Notice to electric customers, alternative electric
suppliers, and other potential electric 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) The portion of the electric utility's load projected to be
served by alternative electric suppliers.
(p) 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.
(q) The relative cost to the electric utility's full-service
customers of maintaining a 1-day interruption in 10 years
reliability standard and more or less stringent standards of
reliability.
(r) The need for additional generating or transmission
capacity to maintain electric reliability or secure economic
advantages to the utility's full-service customers.
(s) 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 or where there may be a
particularly favorable site for building transmission or generation
facilities.
(t) 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.
(u) A complete analysis of the amount of capacity or planning
resource the electric utility has procured to serve the portion of
customers currently served under retail open access in the event
that those customers may in the future seek to return to utility-
provided default service.
(12) Within 30 days after the effective date of the amendatory
act that added this sentence, each electric utility with more than
1,000,000 retail electric customers shall file with the commission
for its review a complete analysis of the amount of capacity or
planning resource each has procured between 2000 and 2014 to serve
the portion of customers currently served under retail open access
in the event that those customers may in the future seek to return
to utility-provided default service. This filing must be verified
by a corporate officer. The commission shall review whether each
utility subject to this subsection has acted in a prudent manner in
procuring that capacity or planning resource.
(13) (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 recognize, accrue, and defer
the allowance for funds used during construction related to equity
capital.
(14) (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. 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 ensure
that the Michigan public
service
commission to foster fosters
competition in this state in
the
provision of electric supply and maintain maintains regulation
of electric supply for customers who continue to choose supply from
incumbent electric utilities.
(c) To encourage the development and construction of
independently
owned merchant plants, which
will to encourage
innovation and investment of generation and storage assets, and to
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.fully available
at market competitive rates.
(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.
(g) To ensure effective competition in the provision of retail
electric service by avoiding anticompetitive subsidies flowing from
a noncompetitive retail electric service to a competitive retail
electric service or to a product or service other than retail
electric service, and from a competitive retail electric service to
a noncompetitive retail electric service.
(h) To ensure that retail electric service consumers are
protected from unreasonable provision of service, sales practices,
market deficiencies, and market power.
(i) To ensure that all data and information necessary to serve
the competitive retail electric service are shared between a
utility and an alternative electric supplier in a timely manner.
Sec. 10a. (1) The commission shall issue orders establishing
the rates, terms, and conditions of service that allow all retail
customers of an electric utility or provider to choose an
alternative electric supplier. The orders shall do all of the
following:
(a) Provide that no more than 10% of an electric utility's
average weather-adjusted retail sales for the preceding calendar
year or a percentage determined by the commission under subdivision
(e) may take service from an alternative electric supplier at any
time.
(b) Set forth procedures necessary to administer and allocate
the amount of load that will be allowed to be served by alternative
electric suppliers, through the use of annual energy allotments
awarded on a calendar year basis, and shall provide, among other
things, that existing customers who are taking electric service
from
an alternative electric supplier at a facility on the
effective
date of the amendatory act that added this subdivision
October 6, 2008 shall be given an allocated annual energy allotment
for that service at that facility, that customers seeking to expand
usage at a facility served through an alternative electric supplier
will be given next priority, with the remaining available load, if
any, allocated on a first-come first-served basis. The procedures
shall also provide how customer facilities will be defined for the
purpose of assigning the annual energy allotments to be allocated
under this section. The commission shall not allocate additional
annual energy allotments at any time when the total annual energy
allotments for the utility's distribution service territory is
greater
than 10% the percentage
set forth in subdivision (a) or the
percentage determined by the commission under subdivision (e) of
the utility's weather-adjusted retail sales in the calendar year
preceding the date of allocation. If the sales of a utility are
less in a subsequent year or if the energy usage of a customer
receiving electric service from an alternative electric supplier
exceeds its annual energy allotment for that facility, that
customer shall not be forced to purchase electricity from a
utility, but may purchase electricity from an alternative electric
supplier for that facility during that calendar year.
(c) Notwithstanding any other provision of this section,
customers seeking to expand usage at a facility that has been
continuously served through an alternative electric supplier since
April 1, 2008 shall be permitted to purchase electricity from an
alternative electric supplier for both the existing and any
expanded load at that facility as well as any new facility
constructed
or acquired after the effective date of the amendatory
act
that added this subdivision October
6, 2008 that is similar in
nature if the customer owns more than 50% of the new facility.
(d) Notwithstanding any other provision of this section, any
customer operating an iron ore mining facility, iron ore processing
facility, or both, located in the Upper Peninsula of this state,
shall be permitted to purchase all or any portion of its
electricity from an alternative electric supplier, regardless of
whether
the sales exceed 10% the
percentage set forth in
subdivision (a) or the percentage determined by the commission
under subdivision (e) of the serving electric utility's average
weather-adjusted retail sales.
(e) The electric choice cap for an electric utility that has
implemented securitization charges authorized by the commission
shall be determined as follows:
(i) Within 30 days of the effective date of the amendatory act
that added this subdivision, the commission shall, for the
remainder of that calendar year, set the electric choice cap to be
the greatest of the following:
(A) 10%.
(B) A percentage equal to the percentage of weather-adjusted
retail sales for the preceding calendar year allotted to customers
taking service from an alternative electric supplier on the
effective date of the amendatory act that added this subdivision
plus the percentage of weather-adjusted retail sales for the
preceding calendar year represented by additional customers
requesting service from an alternative electric supplier on the
effective date of the amendatory act that added this subdivision
but who have not received an allotment under this subsection. The
commission shall ensure that any customer requesting service from
an alternative electric supplier on or before the effective date of
the amendatory act that added this subdivision is allowed to
purchase electricity from an alternative electric supplier.
(C) The highest percentage, determined on a calendar-year
basis for years 2000 through 2016, of weather-adjusted retail sales
for the preceding calendar year representing customers who took
service from an alternative electric supplier. The commission shall
ensure that any customer requesting service from an alternative
electric supplier on or before the effective date of the amendatory
act that added this subdivision is allowed to purchase electricity
from an alternative electric supplier.
(ii) For each of the 3 calendar years following the calendar
year in which the amendatory act that added this subdivision takes
effect, the commission shall, at the beginning of each calendar
year, increase the electric choice cap for a utility subject to
this subdivision from its then current percentage by 6%. The
commission shall do each of the following:
(A) Ensure that any and all savings by the utility, including,
but not limited to, fuel, power purchase costs, and increased
wholesale revenues, due to an increase in the retail sales
associated with customers taking service from an alternative
electric supplier are passed through to full-service customers
through the utility's power supply cost recovery proceedings.
(B) In setting rates for the utility, recognize the effect of
an increase or decrease in the retail sales associated with
customers taking service from an alternative electric supplier,
either through a revenue decoupling mechanism or through a test
year used for setting rates that begins after the effective date of
the amendatory act that added this subdivision.
(iii) On and after the beginning of the fourth calendar year
following the calendar year in which the amendatory act that added
this subdivision takes effect, if the electric choice cap has been
reached for an electric utility and the allotment of retail sales
represented by customers requesting service from an alternative
electric supplier who cannot be served under the existing electric
choice cap exceeds 2% of the electric utility's weather-adjusted
retail sales for the preceding calendar year, then the commission
shall, within 30 days, initiate a contested case to determine if
the electric choice cap should be increased. Within 180 days of the
initiation of the contested case, the commission shall issue an
order increasing an electric utility's electric choice cap by the
percentage of weather-adjusted retail sales represented by those
customers requesting service from an alternative electric supplier
plus 3% of the utility's weather-adjusted retail sales for the
preceding calendar year unless it finds, based on the evidentiary
record in the contested case, that increasing the electric choice
cap will cause substantial harm to full-service customers. In
determining whether an increase in the customer choice cap will
result in substantial harm to full-service customers, the
commission shall consider all the costs and savings experienced or
expected to be experienced by full-service customers based on the
difference between costs and savings with and without the proposed
percentage increase in the electric choice cap, including, but not
limited to, the costs and savings of fuel, purchased power,
wholesale sales, investment in new or existing generating
facilities, and purchase, lease, or acquisition of generating
capacity. The commission shall allow intervention by interested
persons including any electric customer or association of
customers, alternative electric suppliers, or others with
information potentially relevant to the proceeding. The commission
shall not initiate more than 1 contested case for an electric
utility under this subdivision in any 12-month period.
(2) The commission shall issue orders establishing a licensing
procedure for all alternative electric suppliers. To ensure
adequate service to customers in this state, the commission shall
require that an alternative electric supplier maintain an office
within this state, shall assure that an alternative electric
supplier has the necessary financial, managerial, and technical
capabilities, shall require that an alternative electric supplier
maintain records which the commission considers necessary, and
shall ensure an alternative electric supplier's accessibility to
the commission, to consumers, and to electric utilities in this
state. The commission also shall require alternative electric
suppliers to agree that they will collect and remit to local units
of government all applicable users, sales, and use taxes. An
alternative electric supplier is not required to obtain any
certificate, license, or authorization from the commission other
than as required by this act.
(3) The commission shall issue orders to ensure that customers
in this state are not switched to another supplier or billed for
any services without the customer's consent.
(4) No later than December 2, 2000, the commission shall
establish a code of conduct that shall apply to all electric
utilities. The code of conduct shall include, but is not limited
to, measures to prevent cross-subsidization, information sharing,
and preferential treatment, between a utility's regulated and
unregulated services, whether those services are provided by the
utility or the utility's affiliated entities. The code of conduct
established under this subsection shall also be applicable to
electric utilities and alternative electric suppliers consistent
with section 10, this section, and sections 10b through 10cc.
(5) No later than 180 days after the effective date of the
2015 amendatory act that added this sentence, the commission shall
issue orders that establish a competitive bidding process to
determine which electric providers will serve as a provider of last
resort in each electric utility's service area. The procedures
shall include the following provisions:
(a) A competitive bidding process to acquire a wholesale
product consisting of all competitive retail electric services
necessary to maintain essential electric service to that service
area, including a firm supply of load following electric generation
service.
(b) Reasonable financial and technical requirements to
evaluate prospective bidders in advance of a competitive bidding
process to ensure that only bidders that have the financial and
technical integrity to reliably provide retail electric service to
that service area are allowed to participate.
(c) That an electric utility is not required to submit a bid
to serve as the provider of last resort in a service area.
(d) That the commission or independent third-party review to
approve and certify the results and awards under the competitive
bidding process.
(e) That if a retail electric provider fails to serve any or
all of its customers, the provider of last resort for that service
area shall offer those customers retail electric service with no
interruption of service to any customer.
(f) A contingency plan, filed with and approved by the
commission, to ensure the continual availability of retail electric
service to all customers if an electric provider defaults on its
obligations or a competitive bid process fails to attract any
bidders. The contingency plan shall be limited to the shorter of
either 1 year in duration or until a new competitive bid process
can be held. A new contingency plan shall be filed with and
approved by the commission for each 1-year period until a
competitive bid process attracts at least 1 acceptable bid.
(6) (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.
(7) (6)
A utility offering a program under
subsection (5) (6)
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.
(8) (7)
All costs directly attributable to an
appliance
service
program allowed under subsection (5) (6) 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.
(9) (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).(8).
(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.
(10) (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)
(8) when personnel employed at a utility's call center
provide
appliance service program marketing information to a prospective
customer.
(c)
Prior to Before enrolling a customer into the program, the
utility shall inform the potential customer of all of the
following:
(i) That appliance service programs may be available from
another provider.
(ii) That the appliance service program is not regulated by the
commission.
(iii) That a new customer shall have has 10
days after
enrollment to cancel his or her appliance service program contract
without penalty.
(iv) That the customer's regulated rates and conditions of
service provided by the utility are not affected by enrollment in
the program or by the decision of the customer to use the services
of another provider of appliance repair service.
(d) The utility name and logo may be used to market the
appliance service program provided that the program is not marketed
in conjunction with a regulated service. To the extent that a
program utilizes the utility's name and logo in marketing the
program, the program shall include language on all material
indicating that the program is not regulated by the commission.
Costs shall not be allocated to the program for the use of the
utility's name or logo.
(11) (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.
(12) (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.
(13) (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.
(14) (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.
(15) (14)
The rights of parties to existing
contracts and
agreements in effect as of January 1, 2000 between electric
utilities and qualifying facilities, including the right to have
the charges recovered from the customers of an electric utility, or
its successor, shall not be abrogated, increased, or diminished by
this act, nor shall the receipt of any proceeds of the
securitization bonds by an electric utility be a basis for any
regulatory disallowance. Further, any securitization or financing
order issued by the commission that relates to a qualifying
facility's power purchase contract shall fully consider that
qualifying facility's legal and financial interests.
(16) (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.
(17) (16)
The commission shall authorize
rates that will
ensure that an electric utility that offered retail open access
service
from 2002 through the effective date of the amendatory act
that
added this subsection October
6, 2008 fully recovers its
restructuring costs and any associated accrued regulatory assets.
This includes, but is not limited to, implementation costs,
stranded costs, and costs authorized pursuant to section 10d(4) as
it
existed prior to the effective date of the amendatory act that
added
this subsection before October
6, 2008, that have been
authorized
for recovery by the commission in orders issued prior to
the
effective date of the amendatory act that added this subsection
before October 6, 2008. The commission shall approve surcharges
that will ensure full recovery of all such costs within 5 years of
the
effective date of the amendatory act that added this subsection
by October 6, 2013.
(18) (17)
As used in subsections (1) and (15):(16):
(a) "Customer" means the building or facilities served through
a single existing electric billing meter and does not mean the
person, corporation, partnership, association, governmental body,
or other entity owning or having possession of the building or
facilities.
(b) "Electric choice cap" means the limit on a utility's
weather-adjusted retail sales that may take service from an
alternative electric supplier, as specified in subsection (1)(a) or
as determined by the commission under subsection (1)(e).
(c) "Full-service customer" means a retail customer of an
electric utility who does not take service from an alternative
electric supplier.
(d) "Securitization charges" means that term as defined in
section 10h.
(e) (b)
"Standard tariff service"
means, for each regulated
electric utility, the retail rates, terms, and conditions of
service approved by the commission for service to customers who do
not elect to receive generation service from alternative electric
suppliers.
Sec. 10bb. (1) Aggregation may be used for the purchasing of
electricity and related services from an alternative electric
supplier.
(2) Local units of government, public and private schools,
universities, and community colleges may aggregate for the purpose
of purchasing electricity for themselves or for residential
customers and small commercial customers within their boundaries.
with
the written consent of each customer aggregated. Customers
Residential customers and small commercial customers within a local
unit
of government shall continue to have the right to choose their
electricity
supplier and are not required to may
choose not to
purchase electricity through the aggregator. Local units of
government may aggregate for the purpose of purchasing electricity
for large commercial customers and industrial customers within
their boundaries with the written or electronic consent of each of
those customers aggregated.
(3)
As used in this section: , "aggregation"
(a) "Aggregation" means the combining of electric loads of
multiple retail customers or a single customer with multiple sites
to
facilitate the provision of electric service to such those
customers.
(b) "Large commercial customer" means a commercial customer
with an electric demand of greater than 25 kilowatts.
(c) "Small commercial customer" means a commercial customer
with an electric demand of 25 kilowatts or less.
Enacting section 1. This amendatory act takes effect January
1, 2016.