January 29, 2014, Introduced by Rep. 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 sections 9 and 10a (MCL 460.9 and 460.10a), section 9
as added by 2002 PA 634 and section 10a as amended by 2008 PA 286.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 9. (1) As used in this section:
(a) "Alternative gas supplier" or "supplier" means a person
who sells natural gas at unregulated retail rates to customers
located in this state, where the gas is delivered to customers by a
natural gas utility that has a customer choice program. Retail
sales in a customer choice program by an alternative gas supplier
do not constitute public utility service.
(b) "Commission" means the Michigan public service commission
created
in the department of consumer and
industry services.section
1.
(c) "Customer" means an end-user of natural gas.
(d) "Customer choice program" means a program approved by the
commission on application by a natural gas utility that allows
retail customers to choose an alternative gas supplier.
(e) "Natural gas utility" means an investor-owned business
engaged in the sale and distribution of natural gas within this
state whose rates are regulated by the commission.
(2) An alternative gas supplier or natural gas utility shall
not switch a customer to its gas supply without the authorization
of
the customer. A natural gas utility shall not be found is not in
violation of this subsection or a commission order issued under
subsection (3), if the customer's service was switched by the
natural gas utility under the applicable terms and conditions of a
commission approved gas customer choice program or as the result of
the default of an alternative gas supplier.
(3) The commission may issue orders to ensure that an
alternative gas supplier or natural gas utility does not switch a
customer to another supplier without the customer's written
confirmation, confirmation through an independent third party, or
other verification procedures subject to commission approval,
confirming the customer's intent to make a switch and that the
customer has approved the specific details of the switch.
(4) An alternative gas supplier or natural gas utility shall
not include or add optional services in a customer's service
package without the authorization of the customer.
(5) The commission may issue orders to ensure that an
alternative gas supplier or natural gas utility does not include or
add optional services in a customer's service package without the
customer's written confirmation, confirmation through an
independent third party, or other verification procedures approved
by the commission confirming the customer's intent to receive the
optional services.
(6) An alternative gas supplier or natural gas utility shall
not solicit or enter into contracts subject to this section with
customers in this state in a misleading, fraudulent, or deceptive
manner. At the beginning of a telephone solicitation to a customer
regarding natural gas service, a person making the telephone
solicitation shall state his or her name and the full name of the
alternative gas supplier or natural gas utility on whose behalf the
call was initiated.
(7) The commission may by order establish minimum standards
for the form and content of all disclosures, explanations, or sales
information relating to the sale of a natural gas commodity in a
customer choice program and disseminated by an alternative gas
supplier or natural gas utility to ensure that the disclosures,
explanations, and sales information contain accurate and
understandable information and enable a customer to make an
informed decision relating to the purchase of a natural gas
commodity. Any standards established under this subsection shall be
developed to do all of the following:
(a) Not be unduly burdensome.
(b) Not unnecessarily delay or inhibit the initiation and
development of competition among alternative gas suppliers or
natural gas utilities in any market.
(c) Establish different requirements for disclosures,
explanations, or sales information relating to different services
or similar services to different natural gas supply classes of
customers,
whenever such the different requirements are appropriate
to
carry out the provisions of this section.
(8) The commission may adopt rules under the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to
implement this section.
(9) If after notice and hearing the commission finds a person
has violated this section, the commission may order remedies and
penalties
to protect and make whole another person who that has
suffered an economic loss 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 subsection (2) or (4),
the commission shall order the person to pay a fine of not more
than $70,000.00. Each switch made in violation of subsection (2) or
service
added in violation of subsection (4) shall be is 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 a portion between 10% to 50% of the fine assessed
under
subdivision (a) be paid directly to the customer who that
suffered the violation of subsection (2) or (4).
(d) Order the person to reimburse an authorized supplier an
amount equal to the amount paid by the customer that should have
been paid to the authorized supplier.
(e) If the person is licensed under this act, revoke the
license if the commission finds a pattern of violations of
subsection (2) or (4).
(f) Issue cease and desist orders.
(10) Notwithstanding subsection (9), a fine shall not be
imposed for a violation if the person shows that the violation was
an
unintentional and bona fide error which that occurred
notwithstanding the maintenance of procedures reasonably adopted to
avoid the error.
(11)
A natural gas utility shall not be found is not in
violation of this section for switching a customer's supplier or
adding optional services to a customer's account if the switch or
addition was made pursuant to the request or notice of an
alternative gas supplier that is responsible under a customer
choice program for obtaining the customer's approval.
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 October 6, 2008 are 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 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% of the serving electric utility's
average weather-adjusted retail sales.
(2) The commission shall issue orders establishing a licensing
procedure for all alternative electric suppliers. To ensure
adequate service to customers in this state, the commission shall
require that an alternative electric supplier maintain an office
within this state, shall assure that an alternative electric
supplier has the necessary financial, managerial, and technical
capabilities, shall require that an alternative electric supplier
maintain
records which that the commission considers necessary, and
shall ensure an alternative electric supplier's accessibility to
the commission, to consumers, and to electric utilities in this
state. The commission also shall require alternative electric
suppliers to agree that they will collect and remit to local units
of government all applicable users, sales, and use taxes. An
alternative electric supplier is not required to obtain any
certificate, license, or authorization from the commission other
than as required by this act.
(3) The commission shall issue orders to ensure that customers
in this state are not switched to another supplier or billed for
any services without the customer's consent. At the beginning of a
telephone solicitation to a customer regarding electric service, a
person making the telephone solicitation shall state his or her
name and the full name of the alternative electric supplier or
electric utility on whose behalf the call was initiated.
(4)
No later than December 2, 2000, the The commission shall
establish
a code of conduct that shall apply applies 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
applies to electric utilities and alternative electric suppliers
consistent with section 10, this section, and sections 10b through
10cc.
(5) An electric utility may offer its customers an appliance
service program. Except as otherwise provided by this section, the
utility shall comply with the code of conduct established by the
commission under subsection (4). As used in this section,
"appliance service program" or "program" means a subscription
program for the repair and servicing of heating and cooling systems
or other appliances.
(6) A utility offering a program under subsection (5) shall do
all of the following:
(a) Locate within a separate department of the utility or
affiliate within the utility's corporate structure the personnel
responsible for the day-to-day management of the program.
(b) Maintain separate books and records for the program,
access to which shall be made available to the commission upon
request.
(c) Not promote or market the program through the use of
utility billing inserts, printed messages on the utility's billing
materials, or other promotional materials included with customers'
utility bills.
(7) All costs directly attributable to an appliance service
program allowed under subsection (5) shall be allocated to the
program as required by this subsection. The direct and indirect
costs of employees, vehicles, equipment, office space, and other
facilities used in the appliance service program shall be allocated
to the program based upon the amount of use by the program as
compared to the total use of the employees, vehicles, equipment,
office space, and other facilities. The cost of the program shall
include administrative and general expense loading to be determined
in the same manner as the utility determines administrative and
general expense loading for all of the utility's regulated and
unregulated activities. A subsidy by a utility does not exist if
costs allocated as required by this subsection do not exceed the
revenue of the program.
(8) A utility may include charges for its appliance service
program on its monthly billings to its customers if the utility
complies with all of the following requirements:
(a) All costs associated with the billing process, including
the postage, envelopes, paper, and printing expenses, are allocated
as required under subsection (7).
(b) A customer's regulated utility service is not terminated
for nonpayment of the appliance service program portion of the
bill.
(c) Unless the customer directs otherwise in writing, a
partial payment by a customer is applied first to the bill for
regulated service.
(9) In marketing its appliance service program to the public,
a utility shall do all of the following:
(a) The list of customers receiving regulated service from the
utility shall be available to a provider of appliance repair
service upon request within 2 business days. The customer list
shall
be provided in the same electronic format as such the
information is provided to the appliance service program. A new
customer shall be added to the customer list within 1 business day
of the date the customer requested to turn on service.
(b) Appropriately allocate costs as required under subsection
(7) when personnel employed at a utility's call center provide
appliance service program marketing information to a prospective
customer.
(c)
Prior to Before enrolling a customer into the program, the
utility shall inform the potential customer of all of the
following:
(i) That appliance service programs may be available from
another provider.
(ii) That the appliance service program is not regulated by the
commission.
(iii) That a new customer shall have has 10
days after
enrollment to cancel his or her appliance service program contract
without penalty.
(iv) That the customer's regulated rates and conditions of
service provided by the utility are not affected by enrollment in
the program or by the decision of the customer to use the services
of another provider of appliance repair service.
(d) The utility name and logo may be used to market the
appliance service program provided that the program is not marketed
in
conjunction with a regulated service. To the extent that If a
program utilizes the utility's name and logo in marketing the
program, the program shall include language on all material
indicating that the program is not regulated by the commission.
Costs shall not be allocated to the program for the use of the
utility's name or logo.
(10) This section does not prohibit the commission from
requiring a utility to include revenues from an appliance service
program in establishing base rates. If the commission includes the
revenues of an appliance service program in determining a utility's
base rates, the commission shall also include all of the costs of
the program as determined under this section.
(11) Except as otherwise provided in this section, the code of
conduct with respect to an appliance service program shall not
require a utility to form a separate affiliate or division to
operate an appliance service program, impose further restrictions
on the sharing of employees, vehicles, equipment, office space, and
other facilities, or require the utility to provide other providers
of appliance repair service with access to utility employees,
vehicles, equipment, office space, or other facilities.
(12) This act does not prohibit or limit the right of a person
to obtain self-service power and does not impose a transition,
implementation, exit fee, or any other similar charge on self-
service power. A person using self-service power is not an electric
supplier, electric utility, or a person conducting an electric
utility business. As used in this subsection, "self-service power"
means any of the following:
(a) Electricity generated and consumed at an industrial site
or contiguous industrial site or single commercial establishment or
single residence without the use of an electric utility's
transmission and distribution system.
(b) Electricity generated primarily by the use of by-product
fuels, including waste water solids, which electricity is consumed
as part of a contiguous facility, with the use of an electric
utility's transmission and distribution system, but only if the
point or points of receipt of the power within the facility are not
greater than 3 miles distant from the point of generation.
(c) A site or facility with load existing on June 5, 2000 that
is divided by an inland body of water or by a public highway, road,
or street but that otherwise meets this definition meets the
contiguous requirement of this subdivision regardless of whether
self-service power was being generated on June 5, 2000.
(d) A commercial or industrial facility or single residence
that meets the requirements of subdivision (a) or (b) meets this
definition whether or not the generation facility is owned by an
entity different from the owner of the commercial or industrial
site or single residence.
(13) This act does not prohibit or limit the right of a person
to engage in affiliate wheeling and does not impose a transition,
implementation, exit fee, or any other similar charge on a person
engaged in affiliate wheeling. As used in this section:
(a) "Affiliate" means a person or entity that directly, or
indirectly through 1 or more intermediates, controls, is controlled
by, or is under common control with another specified entity. As
used in this subdivision, "control" means, whether through an
ownership, beneficial, contractual, or equitable interest, the
possession, directly or indirectly, of the power to direct or to
cause the direction of the management or policies of a person or
entity or the ownership of at least 7% of an entity either directly
or indirectly.
(b) "Affiliate wheeling" means a person's use of direct access
service where an electric utility delivers electricity generated at
a person's industrial site to that person or that person's
affiliate at a location, or general aggregated locations, within
this state that was either 1 of the following:
(i) For at least 90 days during the period from January 1, 1996
to October 1, 1999, supplied by self-service power, but only to the
extent of the capacity reserved or load served by self-service
power during the period.
(ii) Capable of being supplied by a person's cogeneration
capacity within this state that has had since January 1, 1996 a
rated capacity of 15 megawatts or less, was placed in service
before December 31, 1975, and has been in continuous service since
that date. A person engaging in affiliate wheeling is not an
electric supplier, an electric utility, or conducting an electric
utility business when a person engages in affiliate wheeling.
(14) The rights of parties to existing contracts and
agreements in effect as of January 1, 2000 between electric
utilities and qualifying facilities, including the right to have
the charges recovered from the customers of an electric utility, or
its
successor, shall 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 that elects to receive service from an
alternative electric supplier may subsequently provide notice to
the electric utility of the customer's desire to receive standard
tariff service from the electric utility. The procedures in place
for each electric utility as of January 1, 2008 that set forth the
terms
pursuant to under which a customer receiving service from an
alternative electric supplier may return to full service from the
electric
utility are ratified, and shall remain in effect, and
may
be amended by the commission as needed. If an electric utility did
not have the procedures in place as of January 1, 2008, the
commission shall adopt those procedures.
(16) The commission shall 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.