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Mich. PSC Directs Utilities to Design Tariff for Retail Customer Participation in
RTOs, Once FERC Proceedings End
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December 3, 2010
The Michigan PSC has directed the electric distribution utilities to file specific
tariffs governing the participation of retail customers in RTO markets, but delayed
the filing of such tariffs until further orders from FERC regarding participation
of aggregators of retail customers (ARCs), which are being addressed in specific
compliance proceedings at PJM and the Midwest ISO (U-
The Commission ordered that with respect to demand response resources, Michigan retail customers, or aggregators of retail customers on behalf of retail customers, "shall not participate in any regional transmission organization wholesale power market until further order of the Commission." While the Commission had previously issued such a ban on retail customer participation as it investigated the issue, the ban did not apply to existing contracts (1/26/10), and it is not immediately clear if the continued prohibition is meant to have the same effect, or includes all contracts.
The PSC declined, at this time, to adjudicate specific requirements for retail customer participation in RTO markets, or institute licensing of aggregators of retail customers (e.g. curtailment service providers).
The Commission did find, however, that, "[s]everal rate and reliability issues may arise when ARCs participate in electric wholesale power markets using retail load that is served by utilities under the Commission's jurisdiction."
"The Commission encourages utilities to develop proposals, with accompanying tariff
sheets, that allow ARCs to participate in a manner where the participating load is
not inadvertently counted by both the utility and the ARC. The proposal should also
ensure that the rate paid is fair to participants as well as non-
The Commission said that these tariffs and related proceedings should not be filed
until the FERC issues its orders in Dockets RM07-
The Commission said that it would be premature to commence a rulemaking on ARC licensing, but held that, within 30 days after the issuance of a FERC order responding to the MISO rulemaking and PJM Order 719 filings referenced above, the PSC Staff should convene a meeting with Michigan electric utilities with distribution exceeding 4 million MWh in the previous fiscal year to discuss issues relative to conforming to the final FERC order.
"Although a separate docket for each utility shall be opened, the proposed tariffs for each docket shall be substantially similar with the effects on each utility addressed uniformly," the PSC said.
The Commission also affirmed in its order that FERC Order 719 expressly grants the PSC the authority to determine the eligibility for participation of retail customers, either directly or indirectly through ARCs, in organized wholesale power markets.
The PSC said that the scope of the forthcoming proceeding shall be limited to an
investigation of effects related to the offering of demand response resources by
retail customers or ARCs on behalf of retail customers in wholesale power markets
only. "The Commission does not envision broadening the scope of this investigation
to include other non-
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