Michigan regulators rush to beat deregulation deadline

In a yearend flurry of activity, the Michigan Public Service Commission issued nine orders preparing the state electricity industry for deregulation and customer choice in January. Thursday's actions addressed incumbent utility depreciation, distribution standards, disclosure standards, retail open access tariffs, net stranded costs, unbundling, and restructuring implementation plans.

By the OGJ Online Staff

HOUSTON, Dec. 21 -- In a yearend flurry of activity, the Michigan Public Service Commission issued nine orders preparing the state electricity industry for deregulation and customer choice in January.

Thursday's actions addressed incumbent utility depreciation, distribution standards, disclosure standards, retail open access tariffs, net stranded costs, unbundling, and restructuring implementation plans.

Chairman Laura Chappelle said the measures will help ensure all retail customers in Michigan have a choice of electric suppliers; that competition is fostered in the state; that electric generation ownership is diversified; and that opportunities for economic development in Michigan are improved, while promoting financially healthy and competitive utilities.

The commission approved revised retail open access service tariffs for The Detroit Edison Co. and Consumers Energy Co., setting the rates, terms, and conditions under which retail customers of the two electric utility companies will be permitted to choose an alternative electric supplier.

The retail open access service tariffs will take effect in January. The PSC approved these revised tariffs under last year's deregulation law. The law gives all Detroit Edison and Consumers Energy customers an opportunity to select an alternative electric supplier beginning in January.

The commission previously approved retail open access tariffs for both Detroit Edison and Consumers Energy. The current tariffs will be replaced by the newly approved tariffs.

Detroit Edison provides electric service to about 2.1 million customers in Michigan. Consumers Energy, Jackson, provides electric service to about 1.7 million customers on Michigan's Lower Peninsula.

The commission ordered a rulemaking proceeding to set performance standards for electric distribution systems. It asked electric utilities to begin collecting and submitting data to be used in setting the standards.

Beginning in January, the commission ordered electric service providers to report in a standard format information about the fuel mix and environmental characteristics of their electricity products.

Michigan's deregulation law was adopted in June 2000. It included a 5% rate cut through 2003 for Detroit Edison and Consumers Energy's residential customers. The law also promised a rate cap would remain in place for 2 more years.

Rates for large commercial and industrial electric customers were to be capped at 2000 levels through 2003, and rates for small business customers through 2004. The law also required upgrades to the electric transmission system to increase capacity by 50%, created a $40 million low-income and energy efficiency fund, and established an annual true-up to ensure utilities do not overrecover stranded costs.

More in Home