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Mich. PSC Staff: Michigan Gas Utilities May Only Cease Choice Enrollments Upon PSC Approval
July 8, 2011
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Michigan Gas Utilities Corporation may only stop accepting new choice enrollments, "after obtaining Commission approval to change its program and tariff," Michigan PSC Staff argued in a filing yesterday (Case No. U-16481).
However, at least within the confines a motion to strike filed by Staff on July 7, Staff did not seek any injunctive relief against Michigan Gas Utilities' stated intent to cease choice enrollments.
As only reported in Matters, Michigan Gas Utilities said that it, "will cease accepting new GCC [Gas Customer Choice] customer enrollments for one year," beginning September 1, 2011, to allow it time to evaluate current operational issues raised by the current level of choice load (see 6/29).
Although Michigan Gas Utilities made the statement in rebuttal testimony in a proceeding regarding a proposed reservation charge for capacity, nothing in the testimony suggested that Michigan Gas Utilities was seeking approval or only proposing the choice enrollment moratorium. Rather, as described by Staff, the statement appears to indicate that Michigan Gas Utilities will, "unilaterally (seemingly without Commission approval)," cease accepting new choice enrollments.
Michigan Gas Utilities did not address any authority to implement a unilateral moratorium in its testimony; however, in discussing other aspects of the choice program, it has stressed that, "the Customer Choice programs which the various utilities in Michigan have elected to implement are purely voluntary." Presumably, if Staff's interpretation that Michigan Gas Utilities is not seeking approval for the choice enrollment moratorium is correct, Michigan Gas Utilities is relying on the voluntary nature of the program to support such a change without approval.
"The Commission has no statutory authority to require the Company to offer a Customer Choice program," Michigan Gas Utilities said in rebuttal testimony (again, not directly in the context of the moratorium).
The Michigan Supreme Court made such a finding in examining MCL 460.6 in Consumers Power v. Michigan Public Service Commission, 460 Mich 148, 1999, in which the Court determined that this statute did not provide the Commission with the authority to require utilities to provide a customer choice program.
In response to Michigan Gas Utilities' stated intent for the choice enrollment moratorium, Staff filed a motion to strike the relevant portions of Michigan Gas Utilities' testimony in which it said would impose the moratorium on choice enrollments; however, it is not apparent what striking such testimony would accomplish. As noted above, the testimony was not offered to support a finding that a moratorium is required, but rather appeared to be a courtesy notification that Michigan Gas Utilities would be taking such action.
In its motion to strike, Staff did not request any specific relief barring Michigan Gas Utilities from enacting the moratorium, though Staff said that such a moratorium does require Commission approval. Staff did not petition for a ruling to that effect, however, at least in its motion to strike (given this issue is not related to the evidentiary proceeding, Staff may have filed or will file a separate petition to stop the moratorium; however, it made no mention of any intent to do so in its motion. Any such petition filed as a new case yesterday would not be docketed online until later today).
Michigan Gas Utilities, "proposes a fundamental change to the MGUC gas customer choice program and tariff. It is Staff's position that MGUC may only take such action after obtaining Commission approval to change its program and tariff," Staff said.
Staff further said that Michigan Gas Utilities, "may only cease accepting new GCC [choice] customers upon an appropriate application and approval by the Commission," though Staff cited no rule or law for this requirement.
Additionally, even if Michigan Gas Utilities' testimony was merely proposing a moratorium on choice enrollments (rather than apparently decreeing one), Staff moved to strike the testimony as outside the scope of the proceeding, which is limited to what, if any, surcharge should be imposed upon choice customers for the costs that the utility incurs in order to meet its duty to be the supplier of last resort for choice customers.
Michigan Gas Utilities' current tariff requires that choice service (Rate CC), "is available to all customers without limitation." Presumably, to effect a moratorium, the tariff would have to be amended, although it is unclear, given the voluntary nature of the choice offering, whether Michigan Gas Utilities could simply "file and use" a revised tariff, or if it would be subject to PSC approval.
Although Michigan Gas Utilities has not made the same argument here, Michigan Consolidated Gas in a prior case took the position, "[w]here there is no authority to require the implementation of a gas choice program there can likewise be no authority to require changes to a voluntarily implemented choice program."
In that same case, Staff cited Commission precedent in which the Commission (in Case U-12550) ordered changes to the choice tariffs not previously agreed to by the LDCs, with Staff arguing that, "the utilities were not free to accept or reject the Commission's changes," and were compelled to comply. However, even after a review of the relevant order in Case U-12550, it is not clear if the Commission's changes were solely related to tariff provisions regarding slamming, cramming, and deceptive marketing (three limited areas where the PSC does have explicit statutory authority over choice programs), or whether the changes were to other parts of the tariff where there was no specific grant of statutory authority, and the Commission asserted such authority (and thus could do so again with respect to the choice moratorium). A full reading of the record in Case U-12550 would be required to compare the ultimate changes ordered by the Commission, and those previously agreed to by the LDCs, to determine whether the changes implicated an extension of PSC authority over all aspects of the choice tariffs.
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