May 5, 2005, Introduced by Senator PATTERSON and referred to the Committee on Local, Urban and State Affairs.
A bill to amend 1939 PA 3, entitled
"An act to provide for the regulation and control of public
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 6m (MCL 460.6m), as added by 1982 PA 304.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6m. (1) The utility consumer representation fund is
created as a special fund. The state treasurer shall be the
custodian of the fund and shall maintain a separate account of the
money in the fund. The money in the fund shall be invested in the
bonds, notes, and other evidences of indebtedness issued or insured
by the United States government and its agencies, and in prime
commercial paper. The state treasurer shall release money from the
fund, including interest earned, in the manner and at the time
directed by the board.
(2) Except as provided in subsection (6), each energy utility
which has applied to the public service commission for the
initiation of an energy cost recovery proceeding shall remit to the
fund prior to or upon filing its initial application for such a
proceeding, and on or before the first anniversary of that
application, an amount of money determined by the board in the
following manner:
(a) In the case of an energy utility company serving at least
100,000 customers in this state, an amount which bears to
$300,000.00, multiplied by a factor as provided in subsection (4),
the same proportion as the company's jurisdictional 1981 total
operating revenues, as stated in its annual report, bear to the
jurisdictional 1981 total operating revenues of all energy utility
companies serving at least 100,000 customers in this state. This
amount shall be made available by the board for use by the attorney
general for the purposes described in subsection (17).
(b) In the case of an energy utility company serving at least
100,000 residential customers in this state, an amount which bears
to $300,000.00, multiplied by a factor as provided in subsection
(4), the same proportion as the company's jurisdictional 1981 gross
revenues from residential tariff sales bear to the jurisdictional
1981 gross revenues from residential tariff sales of all energy
utility companies serving at least 100,000 residential customers in
this state. This amount shall be used for grants under subsection
(11).
(3) Payments made by an energy utility under subsection (2)(a)
shall be operating expenses of the utility which the public service
commission shall permit the utility to charge to its customers.
Payments made by a utility under subsection (2)(b) shall be
operating expenses of the utility which the public service
commission shall permit the utility to charge to its residential
customers.
(4) For purposes of subsection (2), the factor shall be set by
the board at a level not to exceed the percentage increase in the
index known as the consumer price index for urban wage earners and
clerical workers, select areas, all items indexed, for the Detroit
standard metropolitan statistical area, compiled by the bureau of
labor statistics of the United States department of labor, or any
successor agency, which has occurred between January 1981 and
January of the year in which the payment is required to be made. In
the event that more than 1 such index is compiled, the index
yielding the largest payment shall be the maximum allowable factor.
The board shall advise utilities of the factor.
(5) On or before the second and succeeding anniversaries of
its initial application for an energy cost recovery proceeding, an
energy utility shall remit to the board amounts equal to 5/6 of the
amounts required under subsection (2).
(6) The remittance requirements of this section shall not
apply to an energy utility organized as a cooperative corporation
pursuant
to under sections 98 to 109 of Act No. 327 of the
Public
Acts
of 1931, being sections 450.98 to 450.109 of the Michigan
Compiled
Laws 1931 PA 327, MCL 450.98
to 450.109, and grants from
the fund shall not be used to participate in an energy cost
recovery proceeding primarily affecting such a utility.
(7) In the event of a dispute between the board and an energy
utility about the amount of payment due, the utility shall pay the
undisputed amount and, if the utility and the board cannot agree,
the board may initiate civil action in the circuit court for Ingham
county for recovery of the disputed amount. The commission shall
not accept or take action on an application for an energy cost
recovery proceeding from an energy utility subject to this section
which has not fully paid undisputed remittances required by this
section.
(8) The commission shall not accept or take action on an
application for an energy cost recovery proceeding from an energy
utility subject to this section until 30 days after it has been
notified by the board or the director of the energy administration,
if section 6 l(13) is applicable, that the board or the director is
ready to process grant applications, will transfer funds payable to
the attorney general immediately upon the receipt of such funds,
and will within 30 days approve grants and remit funds to qualified
grant applicants.
(9) The board may accept a gift or grant from any source to be
deposited in the fund if the conditions or purposes of the gift or
grant are consistent with this section.
(10) The costs of operation and expenses incurred by the board
in performing its duties under this section and section 6l,
including remuneration to board members, shall be paid from the
fund. A maximum of 5% of the annual receipts of the fund may be
budgeted and used to pay expenses other than grants made under
subsection (11).
(11) The net grant proceeds shall finance a grant program from
which the board may award to an applicant an amount which the board
determines shall be used for the purposes set forth in this
section.
(12) The board shall create and make available to applicants
an application form. Each applicant shall indicate on the
application how the applicant meets the eligibility requirements
provided for in this section and how the applicant proposes to use
a grant from the fund to participate in 1 or more proceedings as
authorized in subsection (17) which have been or are expected to be
filed. The board shall receive an application requesting a grant
from the fund only from a nonprofit organization or a unit of local
government in this state. The board shall consider only
applications for grants containing proposals which are in keeping
with subsections (17) and (18) and which serve the interests of
residential utility consumers. For purposes of making grants, the
board may consider protection of the environment, energy
conservation, the creation of employment and a healthy economy in
the state, and the maintenance of adequate energy resources. The
board shall not consider an application which primarily benefits
the applicant or a service provided or administered by the
applicant. The board shall not consider an application from a
nonprofit organization if 1 of the organization's principal
interests or unifying principles is the welfare of a utility or its
investors or employees, or the welfare of 1 or more businesses or
industries, other than farms not owned or operated by a
corporation, which receive utility service ordinarily and primarily
for use in connection with the profit-seeking manufacture, sale, or
distribution of goods or services. Mere ownership of securities by
a nonprofit organization or its members shall not disqualify an
application submitted by that organization.
(13) The board shall encourage the representation of the
interests of identifiable types of residential utility consumers
whose interests may differ, including various social and economic
classes and areas of the state, and if necessary, may make grants
to more than 1 applicant whose applications are related to a
similar issue to achieve this type of representation. In addition,
the board shall consider and balance the following criteria in
determining whether to make a grant to an applicant:
(a) Evidence of the applicant's competence, experience, and
commitment to advancing the interests of residential utility
consumers.
(b) In the case of a nongovernmental applicant, the extent to
which the applicant is representative of or has a previous history
of advocating the interests of citizens, especially residential
utility consumers.
(c) The anticipated effect of the proposal contained in the
application on residential utility consumers, including the
immediate and long-term impacts of the proposal.
(d) Evidence demonstrating the potential for continuity of
effort and the development of expertise in relation to the proposal
contained in the application.
(e) The uniqueness or innovativeness of an applicant's
position or point of view, and the probability and desirability of
that position or point of view prevailing.
(14) As an alternative to choosing between 2 or more
applications which have similar proposals, the board may invite 2
or more of the applicants to file jointly and award a grant to be
managed cooperatively.
(15) The board shall make disbursements pursuant to a grant in
advance of an applicant's proposed actions as set forth in the
application if necessary to enable the applicant to initiate,
continue, or complete the proposed actions.
(16) Any notice to utility customers and the general public of
hearings or other state proceedings in which grants from the fund
may be used shall contain a notice of the availability of the fund
and the address of the board.
(17) The annual receipts and interest earned, less
administrative costs, may be used only for participation in
administrative and judicial proceedings under sections 6h, 6i, 6j,
and 6k, and in federal administrative and judicial proceedings
which directly affect the energy costs paid by Michigan energy
utilities. Amounts which have been in the fund more than 12 months
may be retained in the fund for future grants, or may be returned
to energy utility companies or used to offset their future
remittances in proportion to their previous remittances to the
fund, as the board determines will best serve the interests of
consumers.
(18) The following conditions shall apply to all grants from
the fund:
(a) Disbursements from the fund may be used only to advocate
the interests of energy utility customers or classes of energy
utility customers, and not for representation of merely individual
interests.
(b) The board shall attempt to maintain a reasonable
relationship between the payments from a particular energy utility
and the benefits to consumers of that utility.
(c) The board shall coordinate the funded activities of grant
recipients with those of the attorney general to avoid duplication
of effort, to promote supplementation of effort, and to maximize
the number of hearings and proceedings with intervenor
participation.
(19) A recipient of a grant pursuant to subsection (11) may
use the grant only for the advancement of the proposed action
approved by the board, including, but not limited to, costs of
staff, hired consultants and counsel, and research.
(20) A recipient of a grant under subsection (11) shall file a
report with the board within 90 days following the end of the year
or a shorter period for which the grant is made. The report shall
be made in a form prescribed by the board and shall be subject to
audit by the board. The report shall include the following
information:
(a) An account of all grant expenditures made by the grant
recipient. Expenditures shall be reported within the following
categories:
(i) Employee and contract for services costs.
(ii) Costs of materials and supplies.
(iii) Filing fees and other costs required to effectively
represent residential utility consumers as provided in this
section.
(b) Any additional information concerning uses of the grant
required by the board.
(21) The attorney general shall file a report with the house
and senate committees on appropriations within 90 days following
the end of each fiscal year. The report shall include the following
information:
(a) An account of all expenditures made by the attorney
general of funds received under this section. Expenditures shall be
reported within the following categories:
(i) Employee and contract for services costs.
(ii) Costs of materials and supplies.
(iii) Filing fees and other costs required to effectively
represent utility consumers as provided in this section.
(b) Any additional information concerning uses of the funds
received under this section required by the committees.
(22) On or before July 1 of each calendar year, the board
shall submit a detailed report to the legislature regarding the
discharge of duties and responsibilities under this section and
section 6l during the preceding calendar year.
(23)
Three years after the effective date of this section, and
at
3-year intervals thereafter, a senate committee chosen by the
majority
leader of the senate and a house committee chosen by the
speaker
of the house of representatives shall review the
relationship
between costs and benefits resulting from this section
and
sections 6h through 6l, and
may recommend changes to the
legislature.