Energy Choice
                            

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Bill Would Limit Electric Choice To Current Customers and Waiting List, Require One-Time Election

July 6, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Michigan State Senator Mike Nofs, Chair of the Energy and Technology committee, has introduced a bill (SB 0437) which would maintain the 10% electric choice cap but make choice available only to current customers taking competitive supply or on the wait list, and would essentially require a one-time election for new customers to take choice or remain on utility supply.

SB 0437 provides that a customer taking choice service on January 1, 2015 may continue choice service but would require that, not later than DECEMBER 15, 2015, each customer that is taking service from an alternative electric supplier shall provide written notice to the electric utility stating whether the customer will remain with an alternative electric supplier or whether that customer intends to return to standard tariff service with the electric utility upon the termination of the customer's electricity supply contract with an alternative electric supplier.

Per SB 0437, a customer on a waiting list to take competitive supply as of January 1, 2015 may elect to continue to remain on the list to take service from an alternative electric supplier if that service becomes available. If the customer next on the list awaiting retail open access service refuses to take service from an alternative electric supplier within 7 days after being notified that less than 10% of an electric utility's average weather-adjusted retail sales for the preceding calendar year is taking service from an alternative electric supplier, that customer will be removed from the waiting list and is not eligible to receive electric generation service from an alternative electric supplier.

Only customers taking choice service as of January 1, 2015 or on the waiting list as of January 1, 2015 would be eligible for choice service.

If a choice customer elects to return to electric supply service from the electric utility, that customer is no longer eligible to receive electric supply service from an alternative electric supplier. Returning customers may return to the utility's standard supply service if they provide three-year's notice; otherwise, such returning customers are responsible for the incremental costs incurred by the utility from their return. A notice to return to standard utility service is irrevocable

SB 0437 includes a carve-out providing that any customer operating an iron ore mining facility, iron ore processing facility, or both, located in the Upper Peninsula may purchase all or any portion of its electricity from an alternative electric supplier, regardless of whether the sales exceed 10% of the serving electric utility's average weather-adjusted retail sales, if the utility agrees or if that customer and utility have entered into a settlement agreement allowing the customer to purchase from an alternative electric supplier

SB 0437 would require a retail supplier to demonstrate to the PSC that it will be able to supply enough dedicated, firm, and physical electric generating capacity to serve its retail electric customers' total current peak demand including a reasonable projection of total peak demand growth, plus the applicable planning reserve margin requirements, for the subsequent 3 years or the term of any contract, whichever is longer.

In case where the relevant ISO projects a capacity shortfall, a retail supplier would be required to demonstrate that it will be able to supply enough dedicated, firm, and physical electric generating capacity to serve its retail electric customers' total current peak demand including a reasonable projection of total peak demand growth, plus the applicable planning reserve margin requirements for the subsequent 5 years or the term of any contract, whichever is longer.

Retail suppliers would not be permitted to rely on capacity that is the result of a wholesale market auction for more than 5% of its capacity requirements.

The bill would require alternative electric suppliers to file all of their electricity supply contracts with the PSC, the price terms of which may be filed under seal

The bill would also allow utilities to offer customers value added programs and services. The PSC may permit a utility to retain profits generated by a program, and the utility may use a portion of the revenues from a program to invest in business development of new programs and services.

Energy Choice Now stated that the rules and regulations required of retail suppliers under the bill would end electric choice.

"Supporters of Senator Nofs' plan have claimed that the proposed legislation would maintain some remnant of electric competition but ratepayers deserve the truth -- the new government rules and regulations in this plan will end electric choice," said Energy Choice Now Executive Director Wayne Kuipers

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