Michigan Utility Seeks Waiver of Billing Rules to Collect Additional Charges from Shopping Customers, due to Prior "Error"

Michigan Gas Utilities Corporation (MGUC) petitioned the Michigan PSC for a waiver of the PSC's billing rules to allow it to collect from shopping customers unrecovered costs authorized under the reservation charge, due to an error in collection of the charge.

The PSC previously allowed MGUC to implement a reservation charge applicable to the company's Gas Customer Choice (GCC) customers (and GCR customers) representing certain MGUC supplier of last resort costs which shopping customers would no longer be able to bypass.

Specifically, in January 2012, MGUC was authorized to implement a reservation charge of $0.8014 per Mcf, which reflected the new charge plus the existing balancing fee of $0.42 per Mcf.

To implement the reservation charge for the February 2012 billings, the line item on the GCC customer's bill was changed from Balancing Fee to Reservation Charge and the amount of the fee was then changed from the previous rate of $0.4200 per Mcf to the newly authorized Reservation Charge rate of $0.8014 per Mcf.

"However, the rate was made effective on a 'service rendered' basis rather than on an 'as billed' basis," MGUC said. "As a result, any services rendered prior to February 1st, but billed after February 1st, were assessed the $0.4200 per Mcf Balancing Fee rather than the $0.8014 per Mcf Reservation Charge. This 'service rendered' basis caused the February billings to GCC customers to be $181,883 lower than was authorized by the Reservation Charge Order."

The billing error was first discovered in March 2013, while MGUC was preparing a response to a discovery request in the 2011-2012 GCR Reconciliation proceeding.

Under PSC billing rules for residential and non-residential customers, a utility may only backbill for billing errors discovered within 12 months of when the error occurred. Thus, the billing error was discovered the first month after the billing rules would no longer allow MGUC to backbill GCC customers for the unrecovered revenue.

MGUC sought a waiver of this backbilling limit.

"Granting a waiver in this case will be in the public interest, as it will allow for the implementation of the Reservation Charge Order as the Commission directed," MGUC said.

"The request made herein will not result in a rate increase to GCC customers because the Reservation Charge Order previously authorized the $0.8014 per Mcf charge to be implemented on bills to GCC customers that were rendered in February 2012," MGUC said.

"The average backbilled charge to a residential GCC customer would be expected to be $3.72," MGUC said.

MGUC asked that its request be approved on an ex parte basis.

Case No. U-17435