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MICHIGAN
REPORT

Special permission has been granted to the Michigan Public Service Commission by the Gongwer News Service to post the articles about electric utility restructuring in Michigan. Gongwer articles will be posted here on a two-day delayed basis. Check with Gongwer for a subscription to its Michigan legislative news service to obtain copies sooner.

REPORT NO. 81, VOLUME 41--FRIDAY, APRIL 26, 2002

P.S.C CLARIFIES ELECTRIC OPEN ACCESS METERING

The Public Service Commission Friday amended the retail open access programs for both Consumers Energy and Detroit Edison to ensure both utilities were under the same rules with regard to metering for competitor power providers.

The commission found that prior orders for the companies gave them slightly differing rules and requirements regarding metering and so amended those orders (case No. U-12488 and case No. U-12489) to unify the requirements.

The commission also opened a new case (case No. U-13385) to request comments on some additional issues surrounding metering and customer load profiling.   Edison is to file a proposal on the issues by June 17.

REPORT NO. 79, VOLUME 41--WEDNESDAY, APRIL 24, 2002

CONSUMERS SEEKING STRANDED COSTS

Consumers Energy in papers filed with the Public Service Commission this week is again seeking to be reimbursed for investments it argues it cannot recover in a competitive power market.

The company, in papers filed Monday (case No. U-13380), asked the PSC for $191,278,000 in stranded costs for 2000-2002 based on the new formula the commission created late last year (case No. U-12639).   The commission in the latter order had found that the utilities to date had no stranded costs, but Consumers officials said the order also welcomed them to disagree with the commission and file new stranded costs requests.

Competitors argue the filing is merely intended to inhibit growth of the market by making it unclear what costs would be for customers switching to alternative suppliers.

Jeff Holyfield, Consumers spokesperson, said the company was actually looking to benefit competition by delaying some of its stranded costs collections.   The costs for 2000 and 2001, about $65 million of the total, would require a 3.07-cent charge per kilowatt-hour to recover.   "In order to encourage a competitive marketplace, we've asked that part of that be deferred to later years," Mr. Holyfield said.

The company instead is asking for a 1.25-cent charge with the rest of the costs being ruled a regulatory asset to be collected later.   The excess costs would be assessed interest and could be added back into the company's rates at some later date.

But even that works to add uncertainty to the power market, said David Waymire with the Association of Businesses Advocating Tariff Equity (ABATE).   "This is just a cynical ploy to shut down competition for a couple of quarters," he said of the filing.

Mr. Waymire said the commission had already rejected the utility's assertions that it had stranded costs for the years in question and was not likely to reverse that finding.   In that case, he said, people will be unlikely to switch to a competitive power provider because they will not know how much it will cost them to have power delivered in six months, the likely time it would take the commission to move the case through the process.

If the commission does approve Consumers' request, competitors' customers would face a transmission charge increase at some uncertain time in the future when the commission agrees to allow Consumers to add the abated stranded costs back into its rates.

Mr. Holyfield said the company is following the process laid out by the PSC and that the commission would address any uncertainty in the market.

REPORT NO. 73, VOLUME 41--TUESDAY, APRIL 16, 2002

AMERICAN ELECTRIC GIVEN 30 DAYS TO JOIN REGIONAL GROUP

American Electric Power has a month to explain to the Public Service Commission why it should not be found in violation of state law for not joining the Midwest Independent System Operator.

Statute requires that the major utilities in the state join a regional transmission organization as part of efforts to improve electric transmission into the state.   AEP, known as Indiana Michigan Power Company in PSC proceedings, had been a member of the Alliance regional organization that was rejected by the Federal Energy Regulatory Commission in December in favor of the Midwest group.

The PSC Tuesday ordered the company (case No. U-13360) to show cause by May 17 why it should not be found in violation of the Customer Choice and Electricity Reliability Act for not joining the Midwest group after it was certified by the FERC.

"We are encouraged that nearly all investor-owned electric utilities in Michigan appear to be in compliance with this provision of the act," said PSC Chair Laura Chappelle.   "Once we receive this information from I&M we will be able to determine whether any further action is required by the MPSC to ensure compliance by the company."

"We have been and continue to be active at the FERC to develop a regional (group)," said Greg Clark, spokesperson for AEP.

Mr. Clark said the FERC asked the former Alliance members to work with the Midwest ISO on an agreement and he said that and other efforts are still under way.   And he said those efforts should keep the company in compliance with the state law.