The bill amends the existing law governing public and private utilities in Michigan, specifically focusing on the regulation of electric utilities and their 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 shared savings incentives ranging from 25% to 30% of net benefits, depending on the level of energy savings realized.

Additionally, the bill stipulates that the shared savings mechanism must not exceed a certain percentage of the utility's expenditures on energy waste reduction programs for the calendar year. The commission is tasked with determining the net benefits by calculating the net present value of avoided utility costs from the energy waste reduction programs, deducting the utility's expenditures, and using a discount rate based on the utility's weighted average cost of capital. This legislative change aims to enhance the effectiveness of energy conservation efforts and promote sustainable practices within the state's electric utility sector.

Statutes affected:
Senate Introduced Bill: 460.1, 460.11