HOUSE BILL No. 4756 May 7, 1997, Introduced by Reps. Griffin, Gustafson, Horton and Kelly and referred to the Committee on Public Utilities. A bill to amend 1939 PA 3, entitled "An act to provide for the regulation and control of public util- ities and other services affected with a public interest within this state; to create a public service commission and to pre- scribe and define its powers and duties; to abolish the Michigan public utilities commission and to confer the powers and duties vested by law therein on the public service commission; to pro- vide for the continuance, transfer, and completion of certain matters and proceedings; to abolish automatic adjustment clauses; to prohibit rate increases without notice and hearing; to qualify residential energy conservation programs permitted under state law for certain federal exemption; to provide for a restructuring of rates for certain utilities; to encourage the utilization of resource recovery facilities; to provide for appeals; to provide appropriations; to declare the effect of this act; to prescribe penalties; and to repeal all acts contrary to this act," (MCL 460.1 to 460.8) by adding section 6q. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 SEC. 6Q. (1) AS USED IN THIS SECTION: 2 (A) "APPLIANCE SERVICE AFFILIATE" MEANS A PERSON THAT 3 CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH A 4 UTILITY, AND IS ENGAGED IN THE SALE, LEASE, RENTAL, INSTALLATION, 03228'97 SAT 2 1 CONSTRUCTION, MODERNIZATION, RETROFITTING, MAINTENANCE, OR REPAIR 2 OF PRODUCTS OR EQUIPMENT. 3 (B) "COMMISSION" MEANS THE MICHIGAN PUBLIC SERVICE COMMIS- 4 SION IN THE DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES. 5 (C) "EMERGENCY SERVICE" MEANS SERVICE PERFORMED BY A UTILITY 6 TO CORRECT MALFUNCTIONS OR INTERRUPTIONS IN THE GENERATION, 7 TRANSMISSION, DISTRIBUTION, OR USE OF NATURAL GAS OR ELECTRICITY 8 THAT MAY ENDANGER LIFE OR PROPERTY OR OTHERWISE MAY AFFECT PUBLIC 9 SAFETY. 10 (D) "PERSON" MEANS AN INDIVIDUAL, PARTNERSHIP, CORPORATION, 11 ASSOCIATION, GOVERNMENTAL ENTITY, OR OTHER LEGAL ENTITY. 12 (E) "PRODUCTS OR EQUIPMENT" MEANS ALL PRODUCTS OR EQUIPMENT, 13 INCLUDING HOUSEHOLD APPLIANCES, THAT DEPEND UPON ENERGY SUPPLIED 14 BY A UTILITY FOR THEIR OPERATION. 15 (F) "UTILITY" MEANS A PUBLIC UTILITY SUBJECT TO THE 16 COMMISSION'S REGULATION AND CONTROL THAT PRODUCES OR FURNISHES 17 NATURAL, MANUFACTURED, OR MIXED GAS OR ELECTRIC SERVICE AT RETAIL 18 OR FOR RESALE. UTILITY DOES NOT INCLUDE ALL OF THE FOLLOWING: 19 (i) THE SELLER OF COMPRESSED NATURAL GAS AT RETAIL FOR USE 20 AS A VEHICULAR FUEL WHO PURCHASES THE NATURAL GAS FROM A 21 UTILITY. 22 (ii) THE SELLER OF GAS OR ELECTRIC SERVICE ONLY TO TENANTS 23 OR COOPERATIVE OR CONDOMINIUM OWNERS IN BUILDINGS OWNED, LEASED, 24 OR OPERATED BY THE SELLER OR THE SELLER'S AUTHORIZED REPRESENTA- 25 TIVE WHO DOES NOT OTHERWISE ENGAGE IN THE BUSINESS OF A UTILITY. 26 (iii) THE FURNISHER OF GAS OR ELECTRIC SERVICE TO OCCUPANTS 27 OF A MANUFACTURED HOME OR TRAILER PARK, OWNED, LEASED, OR 03228'97 3 1 OPERATED BY THE FURNISHER OR THE FURNISHER'S AUTHORIZED 2 REPRESENTATIVE WHO DOES NOT OTHERWISE ENGAGE IN THE BUSINESS OF A 3 UTILITY. 4 (iv) AN ELECTRIC COOPERATIVE WITH NOT MORE THAN 50,000 RATE- 5 PAYERS IN THIS STATE. 6 (G) "UTILITY CONTRACTOR" MEANS A PERSON WHO CONTRACTS WITH A 7 UTILITY TO PROVIDE THE SALES AND SERVICES ENGAGED IN BY AN APPLI- 8 ANCE SERVICE AFFILIATE. UTILITY CONTRACTOR DOES NOT INCLUDE AN 9 OFFICIAL OR EMPLOYEE OF A UTILITY. 10 (2) EXCEPT IN EMERGENCY SERVICE SITUATIONS OR AS OTHERWISE 11 PROVIDED BY LAW, A UTILITY SHALL NOT DO ANY OF THE FOLLOWING: 12 (A) SELL, LEASE, OR OTHERWISE TRANSFER AN ASSET TO AN APPLI- 13 ANCE SERVICE AFFILIATE OF THE UTILITY OR A UTILITY CONTRACTOR FOR 14 AN AMOUNT LESS THAN THE FAIR MARKET VALUE OF THE ASSET. 15 (B) BUY, LEASE, OR OTHERWISE ACQUIRE AN ASSET FROM AN APPLI- 16 ANCE SERVICE AFFILIATE OF THE UTILITY OR A UTILITY CONTRACTOR FOR 17 AN AMOUNT GREATER THAN THE FAIR MARKET VALUE OF THE ASSET. 18 (C) SELL SERVICES OR PRODUCTS, EXTEND CREDIT, OR OFFER OTHER 19 TERMS AND CONDITIONS ON MORE FAVORABLE TERMS TO AN APPLIANCE 20 SERVICE AFFILIATE OF THE UTILITY OR A UTILITY CONTRACTOR THAN THE 21 UTILITY OFFERS TO OTHER PERSONS. 22 (D) USE RATES OR PROCEEDS FROM RATEPAYERS OR THE SALE, 23 LEASE, OR TRANSFER OF RATE-ACQUIRED ASSETS, DIRECTLY OR INDIRECT- 24 LY, TO SUBSIDIZE OR OFFSET THE COSTS OF SERVICE OFFERED BY AN 25 APPLIANCE SERVICE AFFILIATE OF THE UTILITY OR A UTILITY 26 CONTRACTOR. 03228'97 4 1 (E) UNLESS OTHERWISE REQUIRED BY LAW, ENGAGE IN OR OFFER A 2 CONTRACT FOR THE SALE, LEASE, RENTAL, INSTALLATION, CONSTRUCTION, 3 MODERNIZATION, RETROFITTING, MAINTENANCE, OR REPAIR OF PRODUCTS 4 OR EQUIPMENT THAT ARE NOT USED FOR DELIVERING OR MEASURING ELEC- 5 TRIC OR GAS SERVICE, EXCEPT THROUGH AN APPLIANCE SERVICE 6 AFFILIATE. 7 (F) REFER OR STEER CUSTOMERS TO SPECIFIC PERSONS ENGAGED IN 8 THE SALE OR SERVICING OF PRODUCTS OR EQUIPMENT, INCLUDING AN 9 APPLIANCE SERVICE AFFILIATE OR UTILITY CONTRACTOR. 10 (G) LEND MONEY TO OR GUARANTEE, ENDORSE, OR ACT AS A SURETY 11 ON THE DEBTS, LIABILITIES, BONDS, NOTES, CONTRACTS, OR OTHER 12 OBLIGATIONS OF, OR OTHERWISE ASSIST FINANCIALLY, AN APPLIANCE 13 SERVICE AFFILIATE. 14 (H) PURCHASE, RECEIVE, HOLD, OR OTHERWISE ACQUIRE THE STOCK, 15 SHARES, BONDS, DEBENTURES, NOTES, OR OTHER SECURITIES, OR OTHER 16 INTEREST IN, AN APPLIANCE SERVICE AFFILIATE UNLESS THE UTILITY 17 PAYS AT LEAST THE FAIR MARKET VALUE FOR THE INTEREST ACQUIRED. 18 (3) AN APPLIANCE SERVICE AFFILIATE SHALL NOT ENGAGE IN OR 19 OFFER A CONTRACT FOR THE SALE, LEASE, RENTAL, INSTALLATION, CON- 20 STRUCTION, MODERNIZATION, RETROFITTING, MAINTENANCE, OR REPAIR OF 21 PRODUCTS OR EQUIPMENT UNLESS THE APPLIANCE SERVICE AFFILIATE COM- 22 PLIES WITH ALL OF THE FOLLOWING REQUIREMENTS: 23 (A) THE APPLIANCE SERVICE AFFILIATE'S NAME DOES NOT RESEMBLE 24 THE UTILITY'S NAME, AND NEITHER THE UTILITY NOR THE APPLIANCE 25 SERVICE AFFILIATE TRADES UPON, PROMOTES, OR ADVERTISES THE AFFIL- 26 IATED STATUS. 03228'97 5 1 (B) THE APPLIANCE SERVICE AFFILIATE DOES NOT HAVE A PLACE OF 2 BUSINESS AT OR ON PREMISES OWNED OR OCCUPIED BY THE UTILITY, AND 3 THE APPLIANCE SERVICE AFFILIATE DOES NOT SHARE THE USE OF THE 4 UTILITY'S PREMISES, EQUIPMENT, INVENTORY, PERSONNEL, OR OTHER 5 RESOURCES. 6 (C) THE APPLIANCE SERVICE AFFILIATE DOES NOT ADVERTISE, PRO- 7 MOTE, OR MARKET ITS PRODUCTS OR SERVICES THROUGH MAILINGS OF THE 8 UTILITY OR ADVERTISEMENTS WHICH CONTAIN THE UTILITY'S NAME. 9 (D) THE APPLIANCE SERVICE AFFILIATE MAINTAINS SEPARATE AND 10 DISTINCT ACCOUNTS, BOOKS, AND RECORDS FROM THOSE OF THE UTILITY. 11 (E) COSTS AND EXPENSES INVOLVED IN OPERATING THE APPLIANCE 12 SERVICE AFFILIATE ARE BORNE BY THE APPLIANCE SERVICE AFFILIATE 13 AND NOT BY THE UTILITY, AND REVENUES FROM THE APPLIANCE SERVICE 14 AFFILIATE ARE NOT PROVIDED OR DISBURSED TO THE UTILITY. 15 (F) ASSETS OF THE APPLIANCE SERVICE AFFILIATE ARE SEPARATE 16 AND DISTINCT FROM THE ASSETS OF THE UTILITY. 17 (G) THE APPLIANCE SERVICE AFFILIATE TRANSACTS ITS BUSINESS 18 IN THE STATE SEPARATE AND INDEPENDENT OF THE UTILITY AND GAINS NO 19 COMPETITIVE ADVANTAGE BY VIRTUE OF ITS STATUS AS AN APPLIANCE 20 SERVICE AFFILIATE. 21 (4) A UTILITY SHALL NOTIFY THE COMMISSION WHEN IT TRANSFERS, 22 IN WHOLE OR IN PART, SUBSTANTIAL ASSETS, FUNCTIONS, OR EMPLOYEES 23 ASSOCIATED WITH UTILITY SERVICE TO AN APPLIANCE SERVICE AFFILIATE 24 OF THE UTILITY OR A UTILITY CONTRACTOR, INDICATING THE IDENTITY 25 OF THE APPLIANCE SERVICE AFFILIATE OR UTILITY CONTRACTOR, A 26 DESCRIPTION OF THE TRANSACTION, AND THE IMPACT ON THE UTILITY'S 27 SERVICE. AFTER CONSULTATION WITH INTERESTED PARTIES, THE 03228'97 6 1 COMMISSION SHALL SPECIFY BY ORDER THE FORM AND MANNER IN WHICH 2 NOTIFICATION WILL BE REQUIRED UNDER THIS SUBSECTION. 3 (5) WHEN THE ATTORNEY GENERAL HAS REASON TO BELIEVE A UTIL- 4 ITY OR AN AFFILIATE HAS ENGAGED, IS ENGAGING, OR IS ABOUT TO 5 ENGAGE IN A VIOLATION OF THIS SECTION, THE ATTORNEY GENERAL MAY 6 BRING AN ACTION TO ENJOIN THE UTILITY OR THE AFFILIATE, OR BOTH, 7 FROM ENGAGING IN A VIOLATION OF THIS SECTION. THE ACTION SHALL 8 BE BROUGHT IN THE CIRCUIT COURT FOR INGHAM COUNTY. 9 (6) A UTILITY OR AN AFFILIATE WHO ENGAGES IN A VIOLATION OF 10 THIS SECTION SHALL PAY TO THE STATE A CIVIL FINE OF $10,000.00 11 FOR EACH DAY THE UTILITY OR AFFILIATE IS IN VIOLATION OF THIS 12 SECTION, AND THE ATTORNEY GENERAL SHALL PETITION THE CIRCUIT 13 COURT FOR THE COUNTY OF INGHAM FOR RECOVERY OF THE CIVIL FINE. 14 (7) A PERSON MAY BRING AN ACTION IN CIRCUIT COURT TO DO ANY 15 OR ALL OF THE FOLLOWING: 16 (A) OBTAIN A DECLARATORY JUDGMENT THAT EITHER THE UTILITY OR 17 AN AFFILIATE, OR BOTH, HAS ENGAGED, IS ENGAGING, OR IS ABOUT TO 18 ENGAGE IN A VIOLATION OF THIS SECTION. 19 (B) ENJOIN EITHER A UTILITY OR AN AFFILIATE, OR BOTH, WHO 20 HAS ENGAGED, IS ENGAGING, OR IS ABOUT TO ENGAGE IN A VIOLATION OF 21 THIS SECTION. 22 (C) BRING AN ACTION TO COLLECT THE CIVIL FINE FROM EITHER 23 THE UTILITY OR THE AFFILIATE, OR BOTH. WHEN AN ACTION IS COM- 24 MENCED UNDER THIS SUBDIVISION, THE PERSON SHALL GIVE TO THE 25 ATTORNEY GENERAL NOTICE OF THE ACTION. NOT MORE THAN 21 DAYS 26 AFTER RECEIPT OF THE NOTICE, THE ATTORNEY GENERAL MAY INTERVENE 27 IN THE ACTION. IF THE ATTORNEY GENERAL INTERVENES IN THE ACTION, 03228'97 7 1 THEN THE ATTORNEY GENERAL SHALL PROSECUTE THE ACTION TO FINAL 2 JUDGMENT INCLUDING THE COLLECTION OF THE CIVIL FINE AND APPEALS. 3 WHERE THE ATTORNEY GENERAL INTERVENES IN AND PROSECUTES THE 4 ACTION, THE PERSON WHO COMMENCED THE ACTION SHALL BE AWARDED 1/3 5 OF THE CIVIL FINE AND THE REMAINING 2/3 SHALL BE PAID TO THE GEN- 6 ERAL FUND OF THE STATE. WHERE THE ATTORNEY GENERAL DOES NOT 7 INTERVENE IN THE ACTION, THE PERSON WHO COMMENCED THE ACTION MAY 8 THEN PROSECUTE THE ACTION TO FINAL JUDGMENT, AND 1/2 OF THE CIVIL 9 FINE AWARDED SHALL BE PAID TO THE PERSON TOGETHER WITH A REASON- 10 ABLE ATTORNEY'S FEE, AND THE OTHER 1/2 SHALL BE PAID TO THE 11 STATE. 12 (8) A PERSON WHO SUFFERS LOSS AS A RESULT OF VIOLATION OF 13 THIS SECTION MAY BRING AN ACTION TO RECOVER 3 TIMES THE ACTUAL 14 DAMAGES SUSTAINED TOGETHER WITH A REASONABLE ATTORNEY'S FEE. 15 (9) A FINAL JUDGMENT OR DECREE DETERMINING THAT A UTILITY OR 16 AN AFFILIATE HAS VIOLATED THIS SECTION IN AN ACTION BROUGHT BY 17 THE ATTORNEY GENERAL UNDER SUBSECTIONS (5) AND (6) OR PROSECUTED 18 BY THE ATTORNEY GENERAL UNDER SUBSECTION (7)(C) SHALL BE PRIMA 19 FACIE EVIDENCE AGAINST THE UTILITY OR AFFILIATE IN ANY OTHER 20 ACTION AGAINST THE UTILITY OR AFFILIATE AS TO ALL MATTERS WITH 21 RESPECT TO WHICH THE JUDGMENT OR DECREE WOULD BE AN ESTOPPEL 22 BETWEEN PARTIES TO THE ACTION. 23 (10) THE COMMISSION SHALL IMPLEMENT THIS SECTION AND DO ALL 24 OF THE FOLLOWING: 25 (A) REVIEW, INSPECT, AND AUDIT BOOKS, ACCOUNTS, AND OTHER 26 RECORDS KEPT BY A UTILITY, APPLIANCE SERVICE AFFILIATE, OR 27 UTILITY CONTRACTOR. 03228'97 8 1 (B) INVESTIGATE THE OPERATIONS OF A UTILITY, APPLIANCE 2 SERVICE AFFILIATE, OR UTILITY CONTRACTOR AND THEIR RELATIONSHIP 3 TO EACH OTHER FOR THE PURPOSE OF ENSURING COMPLIANCE WITH THIS 4 SECTION. 5 (C) PROMULGATE RULES NECESSARY TO IMPLEMENT THIS ACT UNDER 6 THE ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 7 24.201 TO 24.328. 8 (11) IN ADDITION TO ANY OTHER REMEDY AVAILABLE, A PERSON MAY 9 COMMENCE AN ACTION AGAINST A UTILITY OR APPLIANCE SERVICE AFFILI- 10 ATE FOR INJUNCTIVE OR OTHER EQUITABLE RELIEF WITHOUT REGARD TO 11 THE STATUS OF ANY PROCEEDING BEFORE THE COMMISSION. 12 (12) THIS SECTION DOES NOT LIMIT OR IMPAIR ANY RIGHTS OR 13 OTHER REMEDIES A PERSON MAY OTHERWISE HAVE BY LAW. 03228'97 Final page. 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