SENATE BILL No. 1263
May 11, 2000, Introduced by Senators DINGELL, HOFFMAN and DUNASKISS and referred
to the Committee on Technology and Energy.
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 sections 10p and 10q.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 SEC. 10P. (1) THE COMMISSION SHALL REQUIRE THAT EACH ELEC-
2 TRIC UTILITY OPERATING IN THIS STATE ESTABLISH AN INDUSTRY WORKER
3 TRANSITION PROGRAM THAT SHALL, IN CONSULTATION WITH EMPLOYEES OR
4 APPLICABLE COLLECTIVE BARGAINING REPRESENTATIVES, PROVIDE SKILLS
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1 UPGRADES, APPRENTICESHIP AND TRAINING PROGRAMS, VOLUNTARY
2 SEPARATION PACKAGES CONSISTENT WITH REASONABLE BUSINESS PRAC-
3 TICES, AND JOB BANKS TO COORDINATE AND ASSIST PLACEMENT OF
4 EMPLOYEES INTO COMPARABLE EMPLOYMENT AT NO LESS THAN THE WAGE
5 RATES AND SUBSTANTIALLY EQUIVALENT FRINGE BENEFITS RECEIVED
6 BEFORE THE TRANSITION.
7 (2) STRANDED COSTS SHALL INCLUDE AUDITED AND VERIFIED
8 EMPLOYEE-RELATED RESTRUCTURING COSTS THAT ARE INCURRED AS A
9 RESULT OF THE AMENDATORY ACT THAT ADDED THIS SECTION, INCLUDING
10 EMPLOYEE SEVERANCE COSTS, EMPLOYEE RETRAINING PROGRAMS, EARLY
11 RETIREMENT PROGRAMS, OUTPLACEMENT PROGRAMS, AND SIMILAR COSTS AND
12 PROGRAMS, THAT HAVE BEEN APPROVED AND FOUND TO BE PRUDENTLY
13 INCURRED BY THE COMMISSION.
14 (3) IN THE EVENT OF A SALE, PURCHASE, OR ANY OTHER TRANSFER
15 OF OWNERSHIP OF 1 OR MORE MICHIGAN DIVISIONS OR BUSINESS UNITS,
16 OR GENERATING STATIONS OR GENERATING UNITS, OF AN ELECTRIC UTILI-
17 TY, TO EITHER A THIRD PARTY OR A UTILITY SUBSIDIARY, THE ELECTRIC
18 UTILITY'S CONTRACT AND AGREEMENTS WITH THE ACQUIRING ENTITY OR
19 PERSONS SHALL REQUIRE ALL OF THE FOLLOWING:
20 (A) THAT THE ACQUIRING ENTITY OR PERSONS HIRE A SUFFICIENT
21 NUMBER OF NONSUPERVISORY EMPLOYEES TO SAFELY AND RELIABLY OPERATE
22 AND MAINTAIN THE STATION, DIVISION, OR UNIT BY MAKING OFFERS OF
23 EMPLOYMENT TO THE NONSUPERVISORY WORKFORCE OF THE ELECTRIC
24 UTILITY'S DIVISION, BUSINESS UNIT, GENERATING STATION, OR GENER-
25 ATING UNIT.
26 (B) THAT THE ACQUIRING ENTITY OR PERSONS NOT EMPLOY
27 NONSUPERVISORY EMPLOYEES FROM OUTSIDE THE ELECTRIC UTILITY'S
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1 WORKFORCE UNLESS OFFERS OF EMPLOYMENT HAVE BEEN MADE TO ALL
2 QUALIFIED NONSUPERVISORY EMPLOYEES OF THE ELECTRIC UTILITY.
3 (C) THAT THE ACQUIRING ENTITY OR PERSONS HAVE A DISPUTE RES-
4 OLUTION MECHANISM CULMINATING IN A FINAL AND BINDING DECISION BY
5 A NEUTRAL THIRD PARTY FOR RESOLVING EMPLOYEE COMPLAINTS OR DIS-
6 PUTES OVER WAGES, FRINGE BENEFITS, AND WORKING CONDITIONS.
7 (D) THAT THE ACQUIRING ENTITY OR PERSONS OFFER EMPLOYMENT AT
8 NO LESS THAN THE WAGE RATES AND SUBSTANTIALLY EQUIVALENT FRINGE
9 BENEFITS AND TERMS AND CONDITIONS OF EMPLOYMENT THAT ARE IN
10 EFFECT AT THE TIME OF TRANSFER OF OWNERSHIP OF THE DIVISION,
11 BUSINESS UNIT, GENERATING STATION, OR GENERATING UNIT. THE WAGE
12 RATES AND SUBSTANTIALLY EQUIVALENT FRINGE BENEFITS AND TERMS AND
13 CONDITIONS OF EMPLOYMENT SHALL CONTINUE FOR AT LEAST 30 MONTHS
14 FROM THE TIME OF THE TRANSFER OF OWNERSHIP UNLESS THE EMPLOYEES,
15 OR WHERE APPLICABLE COLLECTIVE BARGAINING REPRESENTATIVE, AND THE
16 NEW EMPLOYER MUTUALLY AGREE TO DIFFERENT TERMS AND CONDITIONS OF
17 EMPLOYMENT WITHIN THAT 30-MONTH PERIOD.
18 (4) THE ELECTRIC UTILITY SHALL OFFER A TRANSITION PLAN TO
19 THOSE EMPLOYEES WHO ARE NOT OFFERED JOBS BY THE ENTITY BECAUSE
20 THE ENTITY HAS A NEED FOR FEWER WORKERS. IF THERE IS LITIGATION
21 CONCERNING THE SALE, OR OTHER TRANSFER OF OWNERSHIP OF THE ELEC-
22 TRIC UTILITY'S DIVISIONS, BUSINESS UNITS, GENERATING STATIONS, OR
23 GENERATING UNITS, THE 30-MONTH PERIOD UNDER SUBSECTION (3) WILL
24 BEGIN ON THE DATE THE ACQUIRING ENTITY OR PERSONS TAKE CONTROL OR
25 MANAGEMENT OF THE DIVISIONS, BUSINESS UNITS, GENERATING STATIONS,
26 OR GENERATING UNITS OF THE ELECTRIC UTILITY.
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1 (5) THE COMMISSION SHALL ADOPT GENERALLY APPLICABLE SERVICE
2 QUALITY AND RELIABILITY STANDARDS FOR THE TRANSMISSION AND
3 DISTRIBUTION SYSTEMS OF ELECTRIC UTILITIES AND OTHER ENTITIES
4 SUBJECT TO ITS JURISDICTION AND IN CONJUNCTION WITH ANY PER-
5 FORMANCE RATE MAKING PLAN IMPLEMENTED, INCLUDING, BUT NOT LIMITED
6 TO, STANDARDS FOR CUSTOMER SATISFACTION, SERVICE OUTAGES, DISTRI-
7 BUTION FACILITY UPGRADES, REPAIRS AND MAINTENANCE, TELEPHONE
8 SERVICE, BILLING SERVICE, AND PUBLIC AND WORKER SAFETY. IN SET-
9 TING SERVICE QUALITY AND RELIABILITY STANDARDS, THE COMMISSION
10 SHALL CONSIDER SAFETY, COSTS, LOCAL GEOGRAPHY AND WEATHER, APPLI-
11 CABLE CODES, NATIONAL ELECTRIC INDUSTRY PRACTICES, SOUND ENGI-
12 NEERING JUDGMENT, AND EXPERIENCE. THE COMMISSION SHALL ALSO
13 ADOPT STANDARDS FOR OPERATIONAL RELIABILITY AND SAFETY DURING
14 PERIODS OF EMERGENCY OPERATIONS. IN CONNECTION WITH ANY PER-
15 FORMANCE BASED RATE MAKING PLAN, THE SERVICE QUALITY AND RELI-
16 ABILITY STANDARDS SHALL INCLUDE BENCHMARKS FOR EMPLOYEE STAFF
17 LEVELS AND EMPLOYEE TRAINING PROGRAMS.
18 (6) IN COMPLYING WITH THE SERVICE QUALITY AND RELIABILITY
19 STANDARDS AND EMPLOYEE BENCHMARKS ESTABLISHED UNDER THIS SECTION,
20 A JURISDICTIONAL ENTITY THAT MAKES A PERFORMANCE BASED RATING
21 FILING AFTER THE EFFECTIVE DATE OF THE ACT THAT ADDED THIS SEC-
22 TION SHALL NOT BE ALLOWED TO ENGAGE IN LABOR DISPLACEMENT OR
23 REDUCTIONS BELOW STAFFING LEVELS IN EXISTENCE ON JANUARY 1, 2000,
24 UNLESS ALLOWED BY A COLLECTIVE BARGAINING AGREEMENT OR AGREEMENTS
25 BETWEEN THE ENTITY AND THE APPLICABLE ORGANIZATION OR ORGANIZA-
26 TIONS REPRESENTING THE WORKERS, OR WITH THE APPROVAL OF THE
27 COMMISSION FOLLOWING NOTICE AND HEARING AT WHICH THE BURDEN SHALL
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1 BE UPON THE ENTITY TO DEMONSTRATE THAT THE STAFFING REDUCTIONS
2 WOULD NOT ADVERSELY DISRUPT SERVICE QUALITY AND RELIABILITY STAN-
3 DARDS AS ESTABLISHED BY THE COMMISSION. THIS PARAGRAPH DOES NOT
4 PREVENT REDUCTION OF FORCES BELOW THE JANUARY 1, 2000 LEVEL
5 THROUGH EARLY RETIREMENT AND SEVERANCES NEGOTIATED WITH LABOR
6 ORGANIZATIONS.
7 (7) ANNUALLY, EACH JURISDICTIONAL UTILITY OR ENTITY SHALL
8 FILE ITS PLAN WITH THE COMMISSION DETAILING THE INSPECTION, MAIN-
9 TENANCE, REPAIR, AND REPLACEMENT ACTIONS TO BE TAKEN TO COMPLY
10 WITH THE SERVICE QUALITY AND RELIABILITY STANDARDS DURING THE
11 NEXT CALENDAR YEAR. EACH JURISDICTIONAL ENTITY SHALL FILE A
12 REPORT WITH THE COMMISSION DETAILING ITS PERFORMANCE IN RELATION
13 TO THE SERVICE QUALITY AND RELIABILITY STANDARDS DURING THE PRIOR
14 CALENDAR YEAR. THE ANNUAL REPORTS SHALL CONTAIN OUTAGE DATA
15 BASED ON A STANDARD OUTAGE REPORTING METHODOLOGY, INCLUDING, BUT
16 NOT LIMITED TO, DATA AS TO THE NUMBER OF OUTAGES EXPERIENCED BY
17 CUSTOMERS, THE LENGTH OF OUTAGES BASED ON SYSTEM AVERAGE INTER-
18 RUPTION FREQUENCY INDICES, SYSTEM AVERAGE INTERRUPTION DURATION
19 INDICES, AND MOMENTARY AVERAGE INTERRUPTION FREQUENCY INDICES,
20 THE TIME OF OUTAGES, OUTAGE SEVERITY, THE IMPACT OF WEATHER CON-
21 DITIONS ON OUTAGES, AND YEAR-TO-YEAR COMPARISONS.
22 (8) THE COMMISSION SHALL ANALYZE THE DATA TO DETERMINE
23 WHETHER THE JURISDICTIONAL ENTITIES ARE PROPERLY OPERATING AND
24 MAINTAINING THEIR SYSTEMS, ASSESS THE IMPACT OF DEREGULATION ON
25 RELIABILITY, AND TAKE CORRECTIVE ACTION IF NEEDED.
26 (9) THE COMMISSION SHALL BE AUTHORIZED TO LEVY A PENALTY
27 AGAINST ANY JURISDICTIONAL ENTITY WHICH FAILS TO MEET THE SERVICE
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1 QUALITY AND RELIABILITY STANDARDS IN AN AMOUNT UP TO AND
2 INCLUDING THE EQUIVALENT OF 2% OF ITS TRANSMISSION AND DISTRIBU-
3 TION SERVICE REVENUES FOR THE PRECEDING CALENDAR YEAR.
4 SEC. 10Q. (1) A PERSON SHALL NOT ENGAGE IN THE BUSINESS OF
5 AN ELECTRIC SUPPLIER IN THIS STATE UNLESS THE PERSON OBTAINS AND
6 MAINTAINS A LICENSE ISSUED UNDER THIS ACT.
7 (2) AN APPLICATION FOR ELECTRIC SUPPLIER LICENSE SHALL
8 INCLUDE ALL OF THE FOLLOWING:
9 (A) BE IN WRITING ON A FORM APPROVED BY THE COMMISSION.
10 (B) BE VERIFIED BY OATH OR AFFIRMATION.
11 (C) CONTAIN ALL INFORMATION THAT THE COMMISSION REQUIRES.
12 (3) IN ADDITION TO ANY OTHER INFORMATION REQUIRED BY THE
13 COMMISSION IN CONNECTION WITH A LICENSING APPLICATION, THE APPLI-
14 CANT SHALL BE REQUIRED TO DO BOTH OF THE FOLLOWING:
15 (A) DISCLOSE WHETHER THE APPLICANT, ANY MEMBER OF ITS BOARD
16 OF DIRECTORS, OR ANY OF ITS OFFICERS OR MANAGING AGENTS HAVE BEEN
17 OR ARE THE SUBJECT OF ANY FEDERAL, STATE, OR LOCAL GOVERNMENT
18 INVESTIGATION, LICENSE REVOCATION PROCEEDING OR LAWSUIT, OR ANY
19 VIOLATIONS OR PENDING CHARGES CONCERNING ANY FEDERAL, STATE, OR
20 LOCAL LAWS, CODES, RULES, OR REGULATIONS, WITHIN THE LAST 10
21 YEARS.
22 (B) PROVIDE INFORMATION, INCLUDE INFORMATION AS TO THE
23 APPLICANT'S SAFETY RECORD AND ITS HISTORY OF SERVICE QUALITY AND
24 RELIABILITY, AS TO THE APPLICANT'S TECHNICAL ABILITY, AS DEFINED
25 UNDER REGULATIONS OF THE COMMISSION, TO SAFELY AND RELIABLY GEN-
26 ERATE OR OTHERWISE OBTAIN AND DELIVER ELECTRICITY AND PROVIDE ANY
27 OTHER PROPOSED SERVICES.
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1 (4) THE COMMISSION SHALL REQUIRE, BY REGULATION OR ORDER,
2 THE FOLLOWING BEFORE ISSUING A LICENSE:
3 (A) REQUIRE PROOF OF FINANCIAL INTEGRITY.
4 (B) REQUIRE A LICENSEE OR APPLICANT TO POST A BOND OR OTHER
5 SIMILAR INSTRUMENT, IF, IN THE COMMISSION'S JUDGMENT, THE BOND OR
6 SIMILAR INSTRUMENT IS NECESSARY TO INSURE AN ELECTRICITY
7 SUPPLIER'S FINANCIAL INTEGRITY.
8 (C) REQUIRE A LICENSEE OR APPLICANT TO DO ALL OF THE
9 FOLLOWING:
10 (i) PROVIDE PROOF THAT IT HAS PROPERLY REGISTERED TO DO
11 BUSINESS IN THIS STATE.
12 (ii) AGREE TO BE SUBJECT TO ALL APPLICABLE TAXES OF THE
13 STATE.
14 (iii) COLLECT AND REMIT TO LOCAL UNITS OF GOVERNMENT ALL
15 APPLICABLE USE TAX.
16 (D) ADOPT ANY OTHER REQUIREMENTS THE COMMISSION FINDS TO BE
17 IN THE PUBLIC INTEREST, WHICH MAY INCLUDE DIFFERENT REQUIREMENTS
18 FOR ELECTRIC SUPPLIERS THAT SERVE ONLY LARGE CUSTOMERS.
19 (5) EACH ELECTRIC SUPPLIER SHALL DEMONSTRATE TO THE COMMIS-
20 SION THE COMPETENCE OF ITS EMPLOYEES TO WORK IN THE ELECTRIC
21 INDUSTRY IN ORDER TO OBTAIN AND MAINTAIN AN ELECTRIC SUPPLIER
22 LICENSE. THE KNOWLEDGE, SKILL, AND COMPETENCE LEVELS TO BE
23 DEMONSTRATED SHALL BE CONSISTENT WITH THOSE GENERALLY REQUIRED OF
24 OR BY THE ELECTRIC UTILITIES IN THIS STATE WITH RESPECT TO THEIR
25 EMPLOYEES. ADEQUATE DEMONSTRATION OF NECESSARY KNOWLEDGE, SKILL,
26 AND COMPETENCE SHALL REQUIRE A SHOWING OF FACTORS INCLUDING
27 COMPLETION BY THE EMPLOYEE OF AN ACCREDITED OR OTHERWISE
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1 RECOGNIZED APPRENTICESHIP PROGRAM FOR THE PARTICULAR CRAFT,
2 TRADE, OR SKILL OR SPECIFIED YEARS OF EMPLOYMENT WITH AN ELECTRIC
3 UTILITY PERFORMING A PARTICULAR WORK FUNCTION.
4 (6) TO IMPLEMENT REQUIREMENTS OF SUBSECTION (5), THE COMMIS-
5 SION, IN DETERMINING THAT AN APPLICANT MEETS THE STANDARDS FOR
6 LICENSING AS AN ELECTRIC SUPPLIER, SHALL REQUIRE IN ADDITION TO
7 ANY OTHER LICENSING REQUIREMENTS THAT THE APPLICANT DEMONSTRATE
8 THAT THE EMPLOYEES OF THE APPLICANT THAT WILL BE INSTALLING,
9 OPERATING, AND MAINTAINING GENERATION, TRANSMISSION, OR DISTRIBU-
10 TION FACILITIES WITHIN THIS STATE, OR ANY ENTITY WITH WHICH THE
11 APPLICANT HAS CONTRACTED TO PERFORM THOSE FUNCTIONS WITHIN THIS
12 STATE, HAVE THE REQUISITE KNOWLEDGE, SKILLS, AND COMPETENCE TO
13 PERFORM THOSE FUNCTIONS IN A SAFE AND RESPONSIBLE MANNER IN ORDER
14 TO PROVIDE SAFE AND RELIABLE SERVICE.
15 (7) IF AN APPLICANT COMPLIES WITH THE REQUIREMENTS OF SUB-
16 SECTIONS (2) THROUGH (6), THE COMMISSION SHALL ISSUE A LICENSE TO
17 ALLOW THE PERSON TO ENGAGE IN THE BUSINESS OF AN ELECTRIC
18 SUPPLIER.
19 (8) A LICENSE ISSUED UNDER THIS SECTION MAY NOT BE TRANS-
20 FERRED WITHOUT PRIOR COMMISSION APPROVAL. AN ALTERNATIVE ELEC-
21 TRIC SUPPLIER SHALL NOT BE REQUIRED TO OBTAIN ANY CERTIFICATE,
22 LICENSE, OR AUTHORIZATION OTHER THAN AS REQUIRED BY THIS
23 SECTION. A LICENSED ALTERNATIVE ELECTRIC SUPPLIER IS NOT A
24 PUBLIC UTILITY.
25 (9) IN ADDITION TO ANY OTHER PENALTIES PROVIDED BY THIS ACT
26 OR LAW, IF THE COMMISSION FINDS, AFTER NOTICE AND HEARING, THAT
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1 THERE HAS BEEN A VIOLATION OF THIS SECTION, IT MAY DO 1 OR MORE
2 OF THE FOLLOWING:
3 (A) ISSUE A CEASE AND DESIST ORDER.
4 (B) ISSUE A PRELIMINARY CEASE AND DESIST ORDER IN THE SAME
5 MANNER AS PROVIDED UNDER SECTION 10O.
6 (C) ORDER THE PERSON TO PAY A FINE OF NOT LESS THAN
7 $10,000.00 OR MORE THAN $50,000.00 PER DAY THAT THE PERSON IS IN
8 VIOLATION OF THIS SECTION.
9 (D) ORDER THAT THE LICENSE BE REVOKED.
10 (10) THE COMMISSION SHALL ESTABLISH PROCEDURES WHICH GOVERN
11 THE APPLICATION AND GRANTING OF LICENSES UNDER THIS SECTION
12 WITHIN 60 DAYS OF THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT
13 ADDED THIS SECTION. BEFORE THAT DATE, ELECTRIC SUPPLIERS WHO ARE
14 PROVIDING ELECTRIC GENERATION SERVICE TO RETAIL CUSTOMERS IN THIS
15 STATE OR WHO ARE ELIGIBLE TO PROVIDE ELECTRIC GENERATION SERVICE
16 TO RETAIL CUSTOMERS IN THIS STATE UNDER COMMISSION APPROVED
17 DIRECT ACCESS PROGRAMS IN EFFECT BEFORE THE EFFECTIVE DATE OF THE
18 AMENDATORY ACT THAT ADDED THIS SECTION SHALL BE PERMITTED TO DO
19 SO UNDER PREVIOUSLY EXISTING PROCEDURES AND STATUTES.
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