This bill amends the existing law governing public and private utilities in Michigan, specifically focusing on the regulation of energy waste reduction programs. It introduces a new section, Sec. 6x, which mandates the establishment of a shared savings mechanism for electric utilities that have not capitalized the costs associated with energy waste reduction measures. The bill outlines specific incentives based on the percentage of annual electric energy savings achieved by the utilities, with varying incentives of 25%, 27.5%, and 30% of net benefits depending on the savings thresholds met. Additionally, it sets limits on the maximum percentage of expenditures that can be associated with these shared savings mechanisms.

The bill also details the methodology for calculating net benefits, which includes determining the net present value of lifetime avoided utility costs from energy waste reduction programs, minus the utility's expenditures for those programs. The calculation will utilize the utility's weighted average cost of capital as the discount rate. Overall, this legislation aims to encourage electric utilities to implement effective energy waste reduction strategies while ensuring that they are fairly compensated for their efforts.

Statutes affected:
Senate Introduced Bill: 460.1, 460.11