November 19, 2008, Introduced by Rep. Accavitti 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 10dd and 11 (MCL 460.10dd and 460.11), as
added by 2008 PA 286.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10dd. For the fiscal year ending September 30, 2009,
there is appropriated to the commission from the assessments
imposed under 1972 PA 299, MCL 460.111 to 460.120, the amount of
$2,500,000.00 to hire 25.0 full-time equated positions to implement
the
provisions of the amendatory act that added this section 2008
PA 286.
Sec. 11. (1) This subsection applies beginning January 1,
2009. Except as otherwise provided in this subsection, the
commission shall phase in electric rates equal to the cost of
providing service to each customer class over a period of 5 years
from
the effective date of the amendatory act that added this
section
October 6, 2008. If the commission determines that the rate
impact on industrial metal melting customers will exceed the 2.5%
limit in subsection (2), the commission may phase in cost-based
rates for that class over a longer period. The cost of providing
service to each customer class shall be based on the allocation of
production-related and transmission costs based on using the 50-25-
25 method of cost allocation. The commission may modify this method
to better ensure rates are equal to the cost of service if this
method does not result in a greater amount of production-related
and transmission costs allocated to primary customers.
(2) The commission shall ensure that the impact on residential
and industrial metal melting rates due to the cost of service
requirement in subsection (1) is no more than 2.5% per year.
(3) Notwithstanding any other provision of this act, the
commission may establish eligible low-income customer or eligible
senior citizen customer rates. Upon filing of a rate increase
request, a utility shall include proposed eligible low-income
customer and eligible senior citizen customer rates and a method to
allocate the revenue shortfall attributed to the implementation of
those rates upon all customer classes. As used in this subsection,
"eligible low-income customer" and "eligible senior citizen
customer" mean those terms as defined in section 10t.
(4) Notwithstanding any other provision of this section, the
commission shall establish rate schedules which ensure that public
and private schools, universities, and community colleges are
charged retail electric rates that reflect the actual cost of
providing service to those customers. Not later than 90 days after
the
effective date of the amendatory act that added this section
October 6, 2008, electric utilities regulated under this section
shall file with the commission tariffs to ensure that public and
private schools, universities, and community colleges are charged
electric rates as provided in this subsection.
(5) Subsections (1) to (4) apply only to electric utilities
with 1,000,000 or more retail customers in this state.
(6) This subsection applies beginning January 1, 2009. The
commission shall approve rates equal to the cost of providing
service to customers of electric utilities serving less than
1,000,000 retail customers in this state. The rates shall be
approved by the commission in each utility's first general rate
case
filed after passage of the amendatory act that added this
section
2008 PA 286. If, in the judgment of the commission, the
impact of imposing cost of service rates on customers of a utility
would have a material impact, the commission may approve an order
that implements those rates over a suitable number of years. The
commission shall ensure that any impact on rates due to the cost of
service requirement in this subsection is not more than 2.5% per
year.
(7) The commission shall annually retain an independent
consultant to verify that the requirements of this section are
being satisfied for each electric utility. The costs of this
service shall be recoverable in the utility's electric rates. This
subsection does not apply after December 31, 2015.