The Michigan Public Service Commission (MPSC) today issued the "temporary order" required by Public Act 295 of 2008, also known as the Clean, Renewable and Efficient Energy Act.  To implement the Act, the MPSC today established formats, guidelines and procedures that it will use to process, review and approve renewable energy plans and energy optimization plans submitted by electric and natural gas providers.

"Thanks to the passage of the new energy laws, Michigan is poised to reap the benefits of renewable energy sources and energy efficiency efforts," said MPSC Chairman Orjiakor Isiogu.  "The MPSC today is addressing many of the implementation issues dealing with renewable energy and energy optimization plans raised by the passage of Act 295.  It is the first step of many that will be taken by the MPSC and utilities to provide Michigan with a reliable, stable electric supply to meet our future energy needs."

The temporary order will be effective for no more than one year.  Thereafter, the Act will be administered in accordance with a set of administrative rules to be adopted in Case No. U-15900. 

Renewable Energy Plans

Act 295 identifies the following categories of electric providers that are subject to renewable energy plans:  investor-owned retail rate-regulated electric utilities; retail rate-regulated rural electric cooperatives; alternative electric suppliers; municipally-owned electric utilities; and member-regulated rural electric cooperatives (currently none).

Each category of electric provider is required to indicate how it will meet the applicable renewable energy standards and whether the number of megawatt-hours (MWh) of electricity used in the calculation of the applicable renewable energy credit portfolio will be weather-normalized or based on the average number of MWh of electricity sold by the electric provider annually during the previous three years to retail customers in Michigan on a three-year running average.  In addition, electric providers have other requirements, depending on the category of provider spelled out in the order; complete descriptions of the format for renewable energy plans applicable are located in attachments to the order. 

Investor-owned retail rate-regulated electric utilities, retail-regulated rural electric cooperatives, and alternative electric suppliers have 90 days to file a renewable energy plan; municipally-owned electric utilities and member-regulated electric cooperatives have 120 days to file their plans.

Guidelines for Requests for Proposals

Act 295 requires electric providers that have one million or more retail customers as of Jan. 1, 2008 to describe a bidding process to obtain the renewable energy credits that are necessary to meet the renewable energy credit standard in 2015 and thereafter.   The Act directs the MPSC to adopt guidelines in the temporary order regarding such requests for proposals, which are spelled out in Attachment C.

Energy Optimization Plans

Energy optimization plans must be filed by retail rate-regulated electric utilities, retail rate-regulated rural electric cooperatives, member-regulated rural electric cooperatives, municipally-owned electric utilities, and retail rate-regulated gas utilities.  Alternative electric suppliers are not required to have energy optimization plans. 

The overall goal of an energy optimization plan is to save energy and thus reduce the future costs of provider service to customers.   Among other things, energy optimization plans must be designed to delay the need for constructing new electric generation facilities, which will protect customers from incurring the costs of such construction.

Energy optimization plans will, among other things, propose a set of energy optimization programs that include offerings for each customer class, including low income residential; specify necessary funding levels; describe how energy optimization program costs will be recovered; and ensure that charges collected from a particular customer rate class are spent on energy optimization programs for that rate class.  Energy optimization plans filed by providers will be consistent with the format and applicable provisions of Attachment D.

Rate-regulated providers of all types have 90 days to file their energy optimization plans; member-regulated rural electric cooperatives and municipally-owned electric utilities have 120 days to file their energy optimization plans. 

A provider may combine its renewable energy plan with its energy optimization plan.

The Commission will hold contested case hearings on all of the filings by rate-regulated utilities and will accept public comments for all other filings.

Technical Conferences

To facilitate implementation of Act 295, the MPSC staff will hold two technical conferences. 

Technical conference No. 1 should be attended by all investor-owned electric retail-regulated electric utilities and investor-owned retail rate-regulated natural gas utilities; all alternative electric suppliers and member-regulated rural electric cooperatives, if any;  and any other persons with an interest in the plans to be filed by those providers.  It will be held at 9 a.m. on Jan. 5, 2009. 

Technical conference No. 2 should be attended by all rate-regulated rural electric cooperatives; all municipally-owned electric utilities; and any other person interested in the plans to be filed by those providers.  It will be held at 9 a.m. on Jan. 6, 2009. 

Both conferences will take place at the MPSC's Lansing office, located at 6545 Mercantile Way.

Other Issues

Today's order also deals with a number of other matters to implement the Act, including the grouping of providers; a summary of instructions for initial plan filings; bifurcated filing deadlines; contested case processing procedures; comment proceedings; and additional information.

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

Case No. U-15800