MPSC Invites Michigan Regulated Electric and Natural Gas Utilities, Others to Participate in Group that Will Implement Market-Based Energy Efficiency Pilot Programs

Contact: Judy Palnau (517) 241-3323

The Michigan Public Service Commission (MPSC) today invited regulated electric and natural gas utilities and others to participate in a working group that will implement a market-based system designed to provide energy efficient products that are purchased with no up-front payment and no customer debt obligation.

The creation of the working group comes as a result of a $50,000 grant from the National Governors Association's Clean Energy States Grants Program in June.  The grant's purpose is to develop a statewide infrastructure to support a program modeled after the Pay as You Save (PAYS®) system and to implement up to four pilot projects.

Under this type of program, the customer at a location where energy efficient measures are installed pays a tariffed charge on the utility bill until all measure costs, including financing costs, are paid.  In all cases, the energy cost savings from the products installed are guaranteed to exceed the charge. 

This system makes it easier for customers to purchase energy-saving equipment and to make property improvements through a mechanism that overcomes the market barriers that inhibit the purchase of energy efficiency products.

"Over the past few years, the MPSC has consistently said that this type of program could provide significant benefits to all classes of utility customers, provided the program is properly designed and implemented," noted MPSC Chairman Orjiakor Isiogu.  "Rising energy costs have made energy efficiency programs more attractive, and the recent grant will move Michigan closer toward a proven energy efficiency program."

In today's order, the MPSC directed all regulated gas and electric utilities, cooperatives, municipal utilities, local units of government, lenders, vendors, customer advocacy groups and others interested in participating in the working group to file their notice of intent to participate by Sept. 19 in Case No. U-15633.

The outcome of this project will include:

     ·        formation of a Michigan working group and completion of action steps and plans for the group;

     ·        recommendations for regulatory or statutory changes that are necessary or desirable for implementation of  the program;

     ·        specific outreach plans regarding program financing for Michigan lenders, vendors, and customers;

     ·        development of detailed program designs to direct how the system will be implemented for different types of customers;

     ·        plans for eventual integration of the program with Michigan utility company energy efficiency programming and renewable energy supply portfolio management; and

     ·        plans for integration with Michigan state goals for implementation of the Midwestern Governors Association Energy Security and Climate Stewardship Platform.

In addition, the MPSC staff  is directed to file bimonthly reports on the status of the working group, with the first report due Dec. 1.

The MPSC is an agency within the Department of Labor & Economic Growth.

Case No. U-15633 et al.