November 19, 2008, Introduced by Reps. Nofs and Moore and referred to the Committee on Energy and Technology.
A bill to amend 2008 PA 295, entitled
"Clean, renewable, and efficient energy act,"
by amending sections 21, 23, and 25 (MCL 460.1021, 460.1023, and
460.1025).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 21. (1) This section applies only to electric providers
whose rates are regulated by the commission.
(2) Each electric provider shall file a proposed renewable
energy plan with the commission within 90 days after the commission
issues
a temporary order under section 171 191. The proposed plan
shall meet all of the following requirements:
(a) Describe how the electric provider will meet the renewable
energy standards.
(b) Specify whether the number of megawatt hours of
electricity used in the calculation of the renewable energy credit
portfolio will be weather-normalized or based on the average number
of megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the plan is approved by the commission, this option
shall not be changed.
(c) Include the expected incremental cost of compliance with
the renewable energy standards for a 20-year period beginning when
the plan is approved by the commission.
(d) For an electric provider that had 1,000,000 or more retail
customers in this state on January 1, 2008, describe the bidding
process to be used by the electric provider under section 33. The
description shall include measures to be employed in the
preparation of requests for proposals and the handling and
evaluation of proposals received to ensure that any bidder that is
an affiliate of the electric utility is not afforded a competitive
advantage over any other bidder and that each bidder, including any
bidder that is an affiliate of the electric provider, is treated in
a fair and nondiscriminatory manner.
(3) The proposed plan shall establish a nonvolumetric
mechanism for the recovery of the incremental costs of compliance
within the electric provider's customer rates. The revenue recovery
mechanism shall not result in rate impacts that exceed the monthly
maximum retail rate impacts specified under section 45. The revenue
recovery mechanism is subject to adjustment under sections 47(4)
and 49. A customer participating in a commission-approved voluntary
renewable
energy program under an agreement in effect on the
effective
date of this act October 6,
2008 shall not incur charges
under the revenue recovery mechanism unless the charges under the
revenue recovery mechanism exceed the charges the customer is
incurring for the voluntary renewable energy program. In that case,
the customer shall only incur the difference between the charge
assessed under the revenue recovery mechanism and the charges the
customer is incurring for the voluntary renewable energy program.
The limitation on charges applies only during the term of the
agreement,
not including automatic agreement renewals, or until 1
year
after the effective date of this act October 6, 2009,
whichever is later. Before entering an agreement with a customer to
participate in a commission-approved voluntary renewable energy
program and before the last automatic monthly renewal of such an
agreement
that will occur less than 1 year after the effective date
of
this act before October 6, 2009, an electric provider shall
notify the customer that the customer will be responsible for the
full applicable charges under the revenue recovery mechanism and
under the voluntary renewable energy program as provided under this
subsection.
(4) If proposed by the electric provider in its proposed plan,
the revenue recovery mechanism shall result in an accumulation of
reserve funds in advance of expenditure and the creation of a
regulatory liability that accrues interest at the average short-
term borrowing rate available to the electric provider during the
appropriate period. If proposed by the electric provider in its
proposed plan, the commission shall establish a minimum balance of
accumulated reserve funds for the purposes of section 47(4).
(5) The commission shall conduct a contested case hearing on
the proposed plan filed under subsection (2), pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328. If a renewable energy generator files a petition to
intervene in the contested case in the manner prescribed by the
commission's rules for interventions generally, the commission
shall grant the petition. Subject to subsections (6) and (10),
after the hearing and within 90 days after the proposed plan is
filed with the commission, the commission shall approve, with any
changes consented to by the electric provider, or reject the plan.
(6) The commission shall not approve an electric provider's
plan unless the commission determines both of the following:
(a) That the plan is reasonable and prudent. In making this
determination, the commission shall take into consideration
projected costs and whether or not projected costs included in
prior plans were exceeded.
(b) That the life-cycle cost of renewable energy acquired or
generated under the plan less the projected life-cycle net savings
associated with the provider's energy optimization plan does not
exceed the expected life-cycle cost of electricity generated by a
new
conventional coal-fired facility. In determining the expected
life-cycle
cost of electricity generated by a new conventional
coal-fired
facility making this
determination, the commission shall
consider data from this state and the states of Ohio, Indiana,
Illinois, Wisconsin, and Minnesota, including, if applicable, the
life-cycle costs of the renewable energy system and new
conventional coal-fired facilities. When determining the life-cycle
costs of the renewable energy system and new conventional coal-
fired facilities, the commission shall use a methodology that
includes, but is not limited to, consideration of the value of
energy, capacity, and ancillary services. The commission shall also
consider other costs such as transmission, economic benefits, and
environmental costs, including, but not limited to, greenhouse gas
constraints or taxes. In performing its assessment, the commission
may utilize other available data, including national or regional
reports and data published by federal or state governmental
agencies, industry associations, and consumer groups.
(7) An electric provider shall not begin recovery of the
incremental costs of compliance within its rates until the
commission has approved its proposed plan.
(8) Every 2 years after initial approval of a plan under
subsection (5), the commission shall review the plan. The
commission shall conduct a contested case hearing on the plan
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328. The annual renewable cost reconciliation
under section 49 for that year may be joined with the overall plan
review in the same contested case hearing. Subject to subsections
(6) and (10), after the hearing, the commission shall approve, with
any changes consented to by the electric provider, or reject the
plan and any proposed amendments to the plan.
(9) If an electric provider proposes to amend its plan at a
time other than during the biennial review process under subsection
(8), the electric provider shall file the proposed amendment with
the commission. If the proposed amendment would modify the revenue
recovery mechanism, the commission shall conduct a contested case
hearing on the amendment pursuant to the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328. The annual
renewable cost reconciliation under section 49 may be joined with
the plan amendment in the same contested case proceeding. Subject
to subsections (6) and (10), after the hearing and within 90 days
after the amendment is filed, the commission shall approve, with
any changes consented to by the electric provider, or reject the
plan and the proposed amendment or amendments to the plan.
(10) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
Sec. 23. (1) This section applies only to alternative electric
suppliers and cooperative electric utilities that have elected to
become member-regulated under the electric cooperative member-
regulation act, 2008 PA 167, MCL 460.31 to 460.39.
(2) Each alternative electric supplier or cooperative electric
utility shall file a proposed renewable energy plan with the
commission within 90 days or 120 days, respectively, after the
commission
issues a temporary order under section 171 191.
The
proposed plan shall meet all of the following requirements:
(a) Describe how the electric provider will meet the renewable
energy standards.
(b) Specify whether the number of megawatt hours of
electricity used in the calculation of the renewable energy
portfolio will be weather-normalized or based on the average number
of megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the plan is approved by the commission, this option
shall not be changed.
(3) The commission shall provide an opportunity for public
comment on the proposed plan filed under subsection (2). After the
opportunity for public comment and within 90 days after the
proposed plan is filed with the commission, the commission shall
approve, with any changes consented to by the electric provider, or
reject the plan.
(4) Every 2 years after initial approval of a plan under
subsection (3), the commission shall review the plan. The
commission shall provide an opportunity for public comment on the
plan. After the opportunity for public comment, the commission
shall approve, with any changes consented to by the electric
provider, or reject any proposed amendments to the plan.
(5) If an electric provider proposes to amend its plan at a
time other than during the biennial review process under subsection
(4), the electric provider shall file the proposed amendment with
the commission. The commission shall provide an opportunity for
public comment on the amendment. After the opportunity for public
comment and within 90 days after the amendment is filed, the
commission shall approve, with any changes consented to by the
electric provider, or reject the amendment.
(6) If the commission rejects a proposed plan or amendment
under this section, the commission shall explain in writing the
reasons for its determination.
Sec. 25. (1) This section applies only to municipally-owned
electric utilities.
(2) Each electric provider shall file a proposed renewable
energy plan with the commission within 120 days after the
commission
issues a temporary order under section 171 191.
Two or
more electric providers that each serve fewer than 15,000 customers
may file jointly. The proposed plan shall meet all of the following
requirements:
(a) Describe how the provider will meet the renewable energy
standards.
(b) Specify whether the number of megawatt hours of
electricity used in the calculation of the renewable energy credit
portfolio will be weather-normalized or based on the average number
of megawatt hours of electricity sold by the electric provider
annually during the previous 3 years to retail customers in this
state. Once the commission determines that the proposed plan
complies with this act, this option shall not be changed.
(c) Include the expected incremental cost of compliance with
the renewable energy standards.
(d) Describe the manner in which the provider will allocate
costs.
(3) Subject to subsection (6), the commission shall provide an
opportunity for public comment on the proposed plan filed under
subsection (2). After the applicable opportunity for public comment
and within 90 days after the proposed plan is filed with the
commission, the commission shall determine whether the proposed
plan complies with this act.
(4) Every 2 years after the commission initially determines
under subsection (3) that a renewable energy plan complies with
this act, the commission shall review the plan. Subject to
subsection (6), the commission shall provide an opportunity for
public comment on the plan. After the applicable opportunity for
public comment, the commission shall determine whether any
amendment to the plan proposed by the provider complies with this
act. The proposed amendment is adopted if the commission determines
that it complies with this act.
(5) If a provider proposes to amend its renewable energy plan
at a time other than during the biennial review process under
subsection (4), the provider shall file the proposed amendment with
the commission. Subject to subsection (6), the commission shall
provide an opportunity for public comment on the amendment. After
the applicable opportunity for public comment and within 90 days
after the amendment is filed, the commission shall determine
whether the proposed amendment to the plan complies with this act.
The proposed amendment is adopted if the commission determines that
it complies with this act.
(6) The commission need not provide an opportunity for public
comment under subsection (3), (4), or (5) if the governing body of
the provider has already provided an opportunity for public comment
and filed the comments with the commission.
(7) If the commission determines that a proposed plan or
amendment under this section does not comply with this act, the
commission shall explain in writing the reasons for its
determination.