HOUSE BILL NO. 4760
June 14, 2023, Introduced by Reps. Pohutsky, Conlin, Hoskins, Farhat, O'Neal, Puri, Byrnes,
Mentzer, Rheingans, Arbit, Morse, Hope, Young, Wegela, Price, McKinney, Brixie, Glanville,
MacDonell, Tyrone Carter, Breen, Stone, Churches, Hood, Weiss, Hill, Morgan, Wilson,
McFall, Edwards, Paiz, Martus, Aiyash and Whitsett and referred to the Committee on Energy,
Communications, 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 powers and
duties of certain state governmental officers and entities; 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
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qualify residential energy conservation programs permitted under
state law for certain federal exemption; to create a fund; 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 6, 6a, 6m, 6t, and 11 (MCL 460.6, 460.6a,
460.6m, 460.6t, and 460.11), section 6 as amended by 2005 PA 190
and sections 6a, 6m, and 11 as amended and section 6t as added by
2016 PA 341, and by adding section 6aa.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 6. (1) The public service commission is vested with
2 complete power and jurisdiction to regulate all public utilities in
3 the state except a municipally owned utility, the owner of a
4 renewable resource power production facility as provided in section
5 6d, and except as otherwise restricted by law. The public service
6 commission is vested with the power and jurisdiction to regulate
7 all rates, fares, fees, charges, services, rules, conditions of
8 service, and all other matters pertaining to the formation,
9 operation, or direction of public utilities. The public service
10 commission is further granted the power and jurisdiction to hear
11 and pass upon all matters pertaining to, necessary, or incident to
12 the regulation of public utilities, including electric light and
13 power companies, whether private, corporate, or cooperative; water,
14 telegraph, oil, gas, and pipeline companies; motor carriers;
15 private wastewater treatment facilities; and all public
16 transportation and communication agencies other than railroads and
17 railroad companies.
18 (2) A private, investor-owned wastewater utility may apply to
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1 the commission for rate regulation. If an application is filed
2 under this subsection, the commission is vested with the specific
3 grant of jurisdictional authority to regulate the rates, fares,
4 fees, and charges of private, investor-owned wastewater utilities.
5 As used in this subsection, "private, investor-owned wastewater
6 utilities" means a utility that delivers wastewater treatment
7 services through a sewage system and the physical assets of which
8 are wholly owned by an individual or group of individual
9 shareholders.
10 (3) In executing its duties, powers, and regulatory function
11 under this act, the commission shall prioritize the following
12 goals:
13 (a) The reliability, safety, and resilience of the utility
14 system in this state.
15 (b) Service quality in this state.
16 (c) The affordability of utility service in this state. As
17 used in this subdivision, "affordability" includes, but is not
18 limited to, all of the following:
19 (i) The ability of residential customers in this state,
20 including low-income residential customers, to access safe and
21 reliable utility services at a price the customer can pay without
22 compromising the customer's ability to meet other essential needs.
23 (ii) Any definitions of affordability developed by the energy
24 affordability and accessibility collaborative or other relevant
25 working groups and adopted by the commission.
26 (d) Equitable access to energy efficiency, weatherization,
27 home electrification programs and services, and clean energy
28 technologies.
29 (e) Minimization of harm and prioritization of benefits in
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1 communities consisting predominately of minorities or households
2 below the poverty line where factors, including socioeconomic
3 stressors, disproportionate cost and environmental burdens,
4 vulnerability to environmental degradation, and lack of
5 accessibility in public participation, may act cumulatively to
6 affect public health and the environment and contribute to
7 persistent disparities.
8 (f) Compliance with state public policy goals for the utility
9 sector, including the goals of meeting 60% of this state's
10 electricity needs using renewable energy by 2030 and meeting 100%
11 of this state's electricity needs using carbon-free energy by 2035.
12 (g) Overall cost-effectiveness and nondiscrimination in
13 providing utility service in this state.
14 (4) Upon complaint, on its own motion, or in any contested
15 proceeding, including, but not limited to, any general rate case,
16 the commission may do any of the following:
17 (a) Direct a public utility to establish or undertake any
18 policy, practice, or service that is reasonable, prudent, and in
19 the public interest, including any policy, practice, or service
20 that falls within the management powers or decisions of the public
21 utility.
22 (b) Prohibit or direct a utility to cease any policy,
23 practice, or service that is unreasonable, imprudent,
24 discriminatory, or prejudicial to the public interest, including
25 any policy, practice, or service that falls within the management
26 powers or decisions of the public utility.
27 Sec. 6a. (1) A gas utility, electric utility, or steam utility
28 shall not increase its rates and charges or alter, change, or amend
29 any rate or rate schedules, the effect of which will be to increase
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1 the cost of services to its customers, without first receiving
2 commission approval as provided in this section. A utility shall
3 coordinate with the commission staff in advance of filing its
4 general rate case application under this section to avoid resource
5 challenges with applications being filed at the same time as
6 applications filed under this section by other utilities. In the
7 case of electric utilities serving more than 1,000,000 customers in
8 this state, the commission may, if necessary, order a delay in
9 filing an application to establish a 21-day spacing between filings
10 of electric utilities serving more than 1,000,000 customers in this
11 state. The utility shall place in evidence facts relied upon to
12 support the utility's petition or application to increase its rates
13 and charges, or to alter, change, or amend any rate or rate
14 schedules. The commission shall require notice to be given to all
15 interested parties within the service area to be affected, and all
16 allow interested parties shall have a reasonable opportunity for a
17 full and complete hearing. A utility may use projected costs and
18 revenues for a future consecutive 12-month period in developing its
19 requested rates and charges. The commission shall notify the
20 utility within 30 days after filing, whether the utility's petition
21 or application is complete. A petition or application is considered
22 complete if it complies with the rate application filing forms and
23 instructions adopted under subsection (8). If the application is
24 not complete, the commission shall notify the utility of all
25 information necessary to make that filing complete. If the
26 commission has not notified the utility within 30 days of whether
27 the utility's petition or application is complete, the application
28 is considered complete. Concurrently with filing a complete
29 application, or at any time after filing a complete application, a
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1 gas utility serving fewer than 1,000,000 customers in this state
2 may file a motion seeking partial and immediate rate relief. After
3 providing notice to the interested parties within the service area
4 to be affected and affording interested parties a reasonable
5 opportunity to present written evidence and written arguments
6 relevant to the motion seeking partial and immediate rate relief,
7 the commission shall make a finding and enter an order granting or
8 denying partial and immediate relief within 180 days after the
9 motion seeking partial and immediate rate relief was submitted. The
10 commission has 12 months to issue a final order in a case in which
11 a gas utility has filed a motion seeking partial and immediate rate
12 relief. In approving a utility's petition or application to
13 increase its rates and charges, or to alter, change, or amend any
14 rate or rate schedules, the commission must consider and address
15 whether the petition or application promotes the public interest.
16 In assessing whether the petition or application promotes the
17 public interest, the commission shall consider the goals in section
18 6(3) and any significant issues raised in a public input hearing
19 under section 6aa.
20 (2) If the commission has not issued an order within 180 days
21 of after the filing of a complete application, the utility may
22 implement up to the amount of the proposed annual rate request
23 through equal percentage increases or decreases applied to all base
24 rates. If the utility uses projected costs and revenues for a
25 future period in developing its requested rates and charges, the
26 utility may not implement the equal percentage increases or
27 decreases before the calendar date corresponding to the start of
28 the projected 12-month period. For good cause, the commission may
29 issue a temporary order preventing or delaying a utility from
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1 implementing its proposed rates or charges. If a utility implements
2 increased rates or charges under this subsection before the
3 commission issues a final order, that utility shall refund to
4 customers, with interest, any portion of the total revenues
5 collected through application of the equal percentage increase that
6 exceed the total that would have been produced by the rates or
7 charges subsequently ordered by the commission in its final order.
8 The commission shall allocate any refund required by this
9 subsection among primary customers based upon their pro rata share
10 of the total revenue collected through the applicable increase, and
11 among secondary and residential customers in a manner to be
12 determined by the commission. The rate of interest for refunds
13 shall equal is 5% plus the London interbank offered rate (LIBOR)
14 for the appropriate time period. For any portion of the refund
15 that, exclusive of interest, exceeds 25% of the annual revenue
16 increase awarded by the commission in its final order, the rate of
17 interest shall be is the authorized rate of return on the common
18 stock of the utility during the appropriate period. Any refund or
19 interest awarded under this subsection shall must not be included,
20 in whole or in part, in any application for a rate increase by a
21 utility. This subsection only applies to completed applications
22 filed with the commission before the effective date of the
23 amendatory act that added section 6t.April 20, 2017.
24 (3) This section does not impair the commission's ability to
25 issue a show cause order as part of its rate-making authority. An
26 alteration or amendment in rates or rate schedules applied for by a
27 public utility that will not result in an increase in the cost of
28 service to its customers may be authorized and approved without
29 notice or hearing. There shall be no increase in rates based upon
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1 changes in cost of fuel, purchased gas, or purchased steam unless
2 notice has been given within the service area to be affected, and
3 there has been an opportunity for a full and complete hearing on
4 the cost of fuel, purchased gas, or purchased steam. The rates
5 charged by any utility under an automatic fuel, purchased gas, or
6 purchased steam adjustment clause shall not be altered, changed, or
7 amended unless notice has been given within the service area to be
8 affected, and there has been an opportunity for a full and complete
9 hearing on the cost of the fuel, purchased gas, or purchased steam.
10 (4) The commission shall adopt rules and procedures for the
11 filing, investigation, and hearing of petitions or applications to
12 increase or decrease utility rates and charges as the commission
13 finds necessary or appropriate to enable it to reach a final
14 decision with respect to petitions or applications within a period
15 of time allotted by law to issue a final order after the filing of
16 the complete petitions or applications. The commission shall not
17 authorize or approve adjustment clauses that operate without notice
18 and an opportunity for a full and complete hearing, and all such
19 clauses are abolished. The commission may hold a full and complete
20 hearing to determine the cost of fuel, purchased gas, purchased
21 steam, or purchased power separately from a full and complete
22 hearing on a general rate case and may hold that hearing
23 concurrently with the general rate case. The commission shall
24 authorize a utility to recover the cost of fuel, purchased gas,
25 purchased steam, or purchased power only to the extent that the
26 purchases are reasonable and prudent.
27 (5) Except as otherwise provided in this subsection and
28 subsection (1), if the commission fails to reach a final decision
29 with respect to a completed petition or application to increase or
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1 decrease utility rates within the 10-month period following the
2 filing of the completed petition or application, the petition or
3 application is considered approved. If a utility makes any
4 significant amendment to its filing, the commission has an
5 additional 10 months after the date of the amendment to reach a
6 final decision on the petition or application. If the utility files
7 for an extension of time, the commission shall extend the 10-month
8 period by the amount of additional time requested by the utility.
9 (6) A utility shall not file a general rate case application
10 for an increase in rates earlier than 12 months after the date of
11 the filing of a complete prior general rate case application. A
12 utility may not file a new general rate case application until the
13 commission has issued a final order on a prior general rate case or
14 until the rates are approved under subsection (5).
15 (7) The commission shall, if requested by a gas utility,
16 establish load retention transportation rate schedules or approve
17 gas transportation contracts as required for the purpose of serving
18 industrial or commercial customers whose individual annual
19 transportation volumes exceed 500,000 decatherms on the gas
20 utility's system. The commission shall approve these rate schedules
21 or approve transportation contracts entered into by the utility in
22 good faith if the industrial or commercial customer has the
23 installed capability to use an alternative fuel or otherwise has a
24 viable alternative to receiving natural gas transportation service
25 from the utility, the customer can obtain the alternative fuel or
26 gas transportation from an alternative source at a price that would
27 cause them not to use the gas utility's system, and the customer,
28 as a result of their use of the system and receipt of
29 transportation service, makes a significant contribution to the
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1 utility's fixed costs. The commission shall adopt accounting and
2 rate-making policies to ensure that the discounts associated with
3 the transportation rate schedules and contracts are recovered by
4 the gas utility through charges applicable to other customers if
5