September 30, 2015, Introduced by Senator CASPERSON 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 section 6q (MCL 460.6q), as added by 2008 PA 286, and
by adding section 6t.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6q. (1) A person shall not acquire, control, or merge,
directly or indirectly, in whole or in part, with a jurisdictional
regulated utility nor shall a jurisdictional regulated utility
sell, assign, transfer, or encumber its assets to another person
without first applying to and receiving the approval of the
commission.
(2) After notice and hearing, the commission shall issue an
order stating what constitutes acquisition, transfer of control,
merger activities, or encumbrance of assets that are subject to
this section. This section does not apply to the encumbrance,
assignment, acquisition, or transfer of assets that are encumbered,
assigned, acquired, transferred, or sold in the normal course of
business or to the issuance of securities or other financing
transactions not directly or indirectly involved in an acquisition,
merger, encumbrance, or transfer of control that is governed by
this section. This section does not apply to the creation of a
Michigan-only state jurisdictional utility under section 6t.
(3) The commission shall promulgate rules creating procedures
for the application process required under this section. The
application shall include, but is not limited to, all of the
following information:
(a) A concise summary of the terms and conditions of the
proposed acquisition, transfer, merger, or encumbrance.
(b) Copies of the material acquisition, transfer, merger, or
encumbrance documents if available.
(c) A summary of the projected impacts of the acquisition,
transfer, merger, or encumbrance on rates and electric service in
this state.
(d) Pro forma financial statements that are relevant to the
acquisition, transfer, merger, or encumbrance.
(e) Copies of the parties' public filings with other state or
federal regulatory agencies regarding the same acquisition,
transfer, merger, or encumbrance, including any regulatory orders
issued by the agencies regarding the acquisition, transfer, merger,
or encumbrance.
(4)
Within 60 days from after the date an application is filed
under this section, interested parties, including the attorney
general, may file comments with the commission on the proposed
acquisition, transfer, merger, or encumbrance.
(5)
After notice and hearing and within 180 days from after
the date an application is filed under this section, the commission
shall issue an order approving or rejecting the proposed
acquisition, transfer of control, merger, or encumbrance.
(6) All parties to an acquisition, transfer, merger, or
encumbrance subject to this section shall provide the commission
and the attorney general access to all books, records, accounts,
documents, and any other data and information the commission
considers necessary to effectively assess the impact of the
proposed acquisition, transfer, merger, or encumbrance.
(7) The commission shall consider among other factors all of
the following in its evaluation of whether or not to approve a
proposed acquisition, transfer, merger, or encumbrance:
(a) Whether the proposed action would have an adverse impact
on the rates of the customers affected by the acquisition,
transfer, merger, or encumbrance.
(b) Whether the proposed action would have an adverse impact
on the provision of safe, reliable, and adequate energy service in
this state.
(c) Whether the action will result in the subsidization of a
nonregulated activity of the new entity through the rates paid by
the customers of the jurisdictional regulated utility.
(d) Whether the action will significantly impair the
jurisdictional regulated utility's ability to raise necessary
capital or to maintain a reasonable capital structure.
(e) Whether the action is otherwise inconsistent with public
policy and interest.
(8) In approving an acquisition, transfer, merger, or
encumbrance under this section, the commission may impose
reasonable terms and conditions on the acquisition, transfer,
merger, or encumbrance to protect the jurisdictional regulated
utility, including the division and allocation of the utility's
assets. A jurisdictional regulated utility may reject the terms and
conditions imposed by the commission and not proceed with the
transaction.
(9) In approving an acquisition, transfer, merger, or
encumbrance under this section, the commission may impose
reasonable terms and conditions on the acquisition, transfer,
merger, or encumbrance to protect the customers of the
jurisdictional regulated utility. A jurisdictional regulated
utility may reject the terms and conditions imposed by the
commission and not proceed with the transaction.
(10) Nonpublic information and materials submitted by a
jurisdictional regulated utility under this section clearly
designated by that utility as confidential are exempt from the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. The
commission shall issue protective orders as necessary to protect
information designated by that utility as confidential.
(11)
Nothing in this This section alters does not alter the
authority of the attorney general to enforce federal and state
antitrust laws.
(12) As used in this section:
(a) "Commission" means the Michigan public service commission.
(b) "Jurisdictional regulated utility" means a utility whose
rates are regulated by the commission. Jurisdictional regulated
utility does not include a telecommunication provider as defined in
the Michigan telecommunications act, 1991 PA 179, MCL 484.2101 to
484.2604,
484.2603, or a motor carrier as defined in the motor
carrier
act, 1933 PA 254, MCL 475.1 to 479.43.479.42.
(c) "Person" means an individual, corporation, association,
partnership, utility, or any other legal private or public entity.
Sec. 6t. (1) An affected multistate jurisdictional utility may
not change its corporate form to create a Michigan-only state
jurisdictional utility without first applying for and receiving
approval of the commission.
(2) On its own motion, the commission may order its staff to
conduct a review of any affected multistate jurisdictional utility
to recommend whether the commission should require the creation of
a Michigan-only subsidiary.
(3) An application filed under subsection (1) must include all
of the following:
(a) An analysis of whether the division of assets,
liabilities, and costs between the utility in its current form and
in the proposed alternative is fair and equitable to ratepayers in
both states.
(b) An analysis of whether the creation of a Michigan-only
state jurisdictional utility would allow greater transparency or
simplicity in ratemaking and other proceedings.
(c) Any other information required by the commission.
(4) After notice and hearing and within 1 year after an
application is filed under subsection (1) or, if the commission
staff recommends creation of a Michigan-only state jurisdictional
utility under subsection (2), within 1 year of that recommendation,
the commission shall issue an order approving or rejecting the
creation of a Michigan-only state jurisdictional utility. The
commission shall not approve the creation of a Michigan-only state
jurisdictional utility under this section unless it determines that
it is in the best interest of electric ratepayers in this state.
The commission shall consider all of the following in determining
whether to approve the proposed creation of a Michigan-only state
jurisdictional utility:
(a) Whether the division of assets, liabilities, and costs
between the utility in its current form and in the proposed
alternative is fair and equitable to electric ratepayers in the
affected states.
(b) Whether the creation of a Michigan-only state
jurisdictional utility would allow greater transparency or
simplicity in ratemaking and other proceedings.
(c) Any other factors the commission considers relevant to
determining the best interest of electric ratepayers in this state.
The commission may also evaluate those factors that would be
considered if a merger were proposed under section 6q.
(5) A hearing under subsection (4) shall be conducted as a
contested case pursuant to chapter 4 of the administrative
procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.287. The
commission shall allow intervention by interested persons,
including the attorney general and a representative of the entity
charged with regulating the rates of the affected multistate
jurisdictional utility in another state. The commission shall
permit reasonable discovery before and during the hearing in order
to assist parties and interested persons in obtaining evidence.
(6) An affected multistate jurisdictional utility shall
provide the commission access to all books, records, accounts,
documents, and any other data and information that the commission
considers necessary to determine whether to approve the creation of
a Michigan-only state jurisdictional utility under this section.
(7) Nonpublic information and materials submitted by an
affected multistate jurisdictional utility and designated by the
utility as confidential are exempt from disclosure under the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. The
commission shall issue protective orders as necessary to protect
information designated by the affected multistate jurisdictional
utility as confidential. The intervenors provided for in subsection
(5) may view all materials submitted to the commission under an
appropriate protective order.
(8) In a proceeding initiated under this section, if the
commission finds that the creation of a Michigan-only state
jurisdictional utility is in the best interest of ratepayers, the
commission may order an affected multistate jurisdictional utility
to do 1 or more of the following:
(a) Make changes to the utility's corporate form.
(b) Make changes to the division of assets, liabilities, and
costs between the various jurisdictions of the utility in its
current form and the utility's affiliates.
(c) Create a corporate entity separate from the entity or
entities subject to the jurisdiction of another state to own the
utility's facilities in this state.
(d) File a general rate case in this state under section 6a
establishing rates for the new entity.
(e) Make any other changes necessary to effectuate the
commission's order.
(f) Require the utility to report to the commission in 90 days
regarding the effectuation of the commission's order.
(9) Any appeal from a commission decision under this section
either taken by a representative of the entity charged with the
regulation of rates of the utility in another state or arguing that
the division of assets, liabilities, and costs is not fair and
equitable between the corporate entities in each state is not
required to be taken in the courts of this state.
(10) The commission shall set just and reasonable rates for an
affected multistate jurisdictional utility under Michigan law. In
setting rates for an affected multistate jurisdictional utility
under the laws of this state, the commission is not bound by the
decisions of, or any preapprovals given by, the entity charged with
regulation of rates of the affected multistate jurisdictional
utility in another state.
(11) As used in this section:
(a) "Affected multistate jurisdictional utility" means an
investor-owned electric utility regulated by the commission that
has fewer than 75,000 customers located in this state and that has
a greater number of customers located outside of this state.
(b) "Attorney general" means the Michigan attorney general.
(c) "Commission" means the Michigan public service commission
created in section 6.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.