March 5, 2015, Introduced by Rep. Nesbitt and referred to the Committee on Energy Policy.
A bill to amend 2008 PA 167, entitled
"Electric cooperative member-regulation act,"
by amending section 9 (MCL 460.39).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 9. (1) The commission shall retain jurisdiction over all
areas served and line extension disputes involving a cooperative
electric utility that is member-regulated under this act and a
regulated electric utility. This act does not limit the
commission's jurisdiction over areas served and line extension
disputes granted to the commission under any other law or statute.
A cooperative electric utility that is member-regulated under this
act shall operate in compliance with R 460.3411 of the Michigan
administrative code, regarding extension of electric service in
areas served by 2 or more utilities. The commission shall continue
to possess all jurisdiction and authority necessary to administer
and enforce the provisions of 1929 PA 69, MCL 460.501 to 460.506,
and R 460.3411 of the Michigan administrative code with respect to
member-regulated cooperative electric utilities.
(2) When a member-regulated cooperative is required to give
notice to the commission and any affected electric utility of its
intention to extend service to a prospective customer as required
under R 460.3411 of the Michigan administrative code, the notice
shall also include the charge to extend service, if any, and the
rate or rates for the service offered.
(3) If the electric utility, after being notified under R
460.3411 of the Michigan administrative code, believes that a
cooperative that is member-regulated under this act either proposes
to unlawfully extend service to a prospective customer or has
offered an unjustly preferential charge for extension of service or
unjust rate to a prospective customer and that prospective customer
could
otherwise be served by the electric utility pursuant to under
the commission's rules for extension of electric service, the
affected electric utility may file an objection with the
commission. Any objection allowed under this subsection shall be
filed within 60 days from the date notice of the intent to extend
service was provided by the cooperative. If an objection is filed
by the utility notified under R 460.3411 of the Michigan
administrative code, the commission shall first determine whether
the complaining utility or the cooperative, or both, have the
lawful right to provide service to the prospective customer and
then, if necessary, determine whether the charges or rates offered
by the cooperative are just and reasonable based on the
cooperative's cost of service. That determination shall be made at
a contested case proceeding conducted pursuant to chapter 4 of the
administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to
24.287. A cooperative's charges or rates offered to a prospective
customer shall be considered just and reasonable upon a showing by
the cooperative that the charges to extend service to a prospective
customer and the rates offered are equivalent to the cooperative's
charges to extend service and rates charged to other similarly
situated customers served by the cooperative. If the cooperative
does not provide service to other similarly situated customers, the
cooperative shall demonstrate that its charges to extend service
and the rates offered to the prospective customer are just and
reasonable based on the cooperative's cost of providing service to
the prospective customer, consistent with industry practice. At the
choice of the customer, either the electric utility or the member-
regulated cooperative may provide service to the prospective
customer until the commission determines the appropriate service
provider.
(4) A municipally owned utility that has entered into a
service area agreement with a cooperative in accordance with
section
10y(6) 10y of 1939 PA 3, MCL 460.10y, may file an action in
the circuit court in the district where the cooperative's main
office is located alleging that a rate or charge offered by the
cooperative is unjust and unreasonable. An action filed under this
subsection shall be filed within 60 days after the municipally
owned utility becomes aware of the rate or charge. In determining
whether a rate or charge is just and reasonable, the circuit court
shall use the standards set forth in subsection (3) for
determinations made by the commission. If the circuit court
determines that the rate or charge offered to the prospective
customer is unjust or unreasonable, the court shall order the
cooperative to assess the appropriate rate or charge to the
prospective customer. Notwithstanding any law to the contrary, if
the circuit court issues an order under this subsection, any
prospective customer directly affected by the order shall be
permitted by the cooperative to switch service to the objecting
municipally owned utility, if the affected customer has given the
cooperative written notice of the customer's intent to switch
within 60 days from the date of the court's order and the objecting
municipally owned utility agrees to pay the cooperative the
reasonable value, as determined by the circuit court, of its
facilities that will continue to be used to serve the customer by
the objecting municipally owned utility.
(5) If the commission finds that an electric utility or
cooperative providing temporary service to a customer under this
act is not a lawful service provider for that customer, the
commission shall order service to that customer transferred to the
lawful provider. That order shall require the provider acquiring
the customer to pay for the reasonable cost of the facilities, as
determined by the commission, constructed to serve the transferred
customer, which will be used by the acquiring provider to serve the
transferred customer.
(6) If the commission finds that the cooperative is a lawful
service provider but the cooperative's charges to extend service,
if any, or the rates offered to the prospective customer are unjust
or unreasonable, the commission shall order the cooperative to
assess the appropriate charges to extend service and assess the
appropriate rates to the prospective customer. Notwithstanding
rules to the contrary, if the commission issues an order under this
subsection, any prospective customer directly affected by the
commission's order shall be permitted by the cooperative to switch
service to the objecting electric utility, if the affected customer
has given the cooperative written notice of the customer's intent
to switch within 60 days from the date of the commission's order
and the objecting electric utility agrees to pay the cooperative
the reasonable value, as determined by the commission, of its
facilities that will continue to be used to serve the customer by
the objecting electric utility.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 4298 (request no.
01467'15) of the 98th Legislature is enacted into law.