2006 Michigan Compiled Laws - Mich. Comp. Laws § 460.10y Municipally owned utility; requirements.

Sec. 10y.

(1) The governing body of a municipally owned utility shall determine whether it will permit retail customers receiving delivery service from the municipally owned utility the opportunity of choosing an alternative electric supplier, subject to the implementation of rates, charges, terms, and conditions referred to in subsection (7).

(2) Except with the written consent of the municipally owned utility, a person shall not provide delivery service or customer account service to a retail customer that was receiving that service from a municipally owned utility as of the effective date of the amendatory act that added this section, or is receiving the service from a municipally owned utility and has the opportunity to choose an alternative electric supplier under terms consistent with this section. For purposes of this subsection, "customer" means the building or facilities served rather than the individual, association, partnership, corporation, governmental body, or any other entity taking service.

(3) After December 31, 2007, subsection (2) does not apply if the governing body of the municipally owned utility does not permit all of its retail customers receiving delivery service from the municipally owned utility located outside of the boundaries of the municipality that owns the utility the opportunity to choose an alternative electric supplier.

(4) If a municipally owned utility elects to provide electric generation service to retail customers receiving delivery service from an electric utility, all of the following apply:

(a) The municipally owned utility shall provide all of its retail customers receiving delivery service from the municipally owned utility located outside of the boundaries of the municipality that owns the utility the opportunity of choosing an alternative electric supplier. The rates, charges, terms, and conditions of delivery service for customers choosing an alternative electric supplier shall be established by the governing body of the municipally owned utility as provided under subsection (7).

(b) If a municipally owned utility and an electric utility both provide delivery service to retail customers in the same municipality located outside of the boundaries of the municipality that owns the municipal utility, then the municipally owned utility shall do 1 of the following:

(i) Make a filing as provided under subsection (5).

(ii) Enter into a written agreement as provided under subsection (6).

(c) The municipally owned utility shall comply with orders issued pursuant to sections 10a(3), 10q, 10r, and 10t with respect to customers located outside of the municipality that owns the municipally owned utility. Upon a complaint or on the commission's own motion, if the commission finds, after notice and hearing, that the municipally owned utility has not complied with a provision or order issued under sections 10a(3), 10q, 10r, and 10t the commission shall order such remedies and penalties as necessary to make whole a customer or other person who has suffered damages as a result of the violation, including, but not limited to, 1 or more of the following:

(i) Order the municipally owned utility to pay a fine of not less than $1,000.00 or more than $20,000.00 for the first offense and not less than $40,000.00 for a second and any subsequent offense.

(ii) Order a refund to the customer of any excess charges.

(iii) Order any other remedies that would make whole a person harmed, including, but not limited to, payment of reasonable attorney fees.

(iv) Revoke the license of the municipally owned utility if the commission finds a pattern of violations.

(v) Issue cease and desist orders.

(d) The municipally owned utility may provide electric generation service to serve electric retail customers receiving delivery service from an electric utility up to an amount equal to the municipally owned utility's retail customer load that has the opportunity of choosing from an alternative electric supplier.

(e) The municipally owned utility shall obtain a license under section 10a(2). The commission shall issue a license unless it determines that the municipally owned utility has adopted rates, charges, terms, and conditions for delivery service that are unduly discriminatory or reflect recovery of stranded costs in an amount considered unjust and unreasonable by the commission. A municipally owned utility operating under a license issued by the commission shall notify the commission before modifying rates, charges, terms, and conditions for delivery services. This subsection does not grant the commission authority to set rates for a municipally owned utility. The commission, after notice and opportunity for hearing, may revoke a license issued to a municipally owned utility if it determines that the municipally owned utility is not in compliance with this subsection.

(5) With respect to any electric utility regarding delivery service to customers located outside of the municipal boundaries of the municipality that owns the utility, a governing body of a municipally owned utility may elect to operate in compliance with R 460.3411 of the Michigan administrative code, as in effect on the effective date of the amendatory act that added this section. However, compliance with R 460.3411(13) of the Michigan administrative code is not required for the municipally owned utility. Concurrent with the filing of an election under this subsection with the commission, the municipally owned utility shall serve a copy of the election on the electric utility. Beginning 30 days after service of the copy of the election, the electric utility shall, as to the electing municipally owned utility, be subject to the terms of R 460.3411 of the Michigan administrative code as in effect on the effective date of the amendatory act that added this section. The commission shall decide disputes arising under this subsection subject to judicial review and enforcement.

(6) A municipally owned utility and an electric utility that provides delivery service in the same municipality as the municipally owned utility may enter into a written agreement to define the territorial boundaries of each utility's delivery service area and any other terms and conditions as necessary to provide delivery service. The agreement is not effective unless approved by the governing body of the municipally owned utility and the commission. The governing body of the municipally owned utility and the commission shall annually review and supervise compliance with the terms of the agreement. At the request of a party to the agreement, disputes arising under the agreement shall be decided by the commission subject to judicial review and enforcement.

(7) If the governing body of a municipally owned utility establishes a program to permit any of its customers the opportunity to choose an alternative electric supplier, the governing body of the municipally owned utility shall have exclusive jurisdiction to do all of the following:

(a) Set delivery service rates applicable to services provided by the municipally owned utility that shall not be unduly discriminatory.

(b) Determine the amount and types of, and recovery mechanism for, stranded and transition costs that will be charged.

(c) Establish rules, terms of access, and conditions that it considers appropriate for the implementation of a program to allow customers the opportunity of choosing an alternative electric supplier.

(8) Complaints alleging unduly discriminatory rates or other noncompliance arising under subsection (7) shall be filed in the circuit court for the county in which the municipally owned utility is located. Complaints arising under subsection (4) shall be decided by the commission subject to judicial review and enforcement.

(9) This section does not prevent or limit a municipally owned utility from selling electricity at wholesale. A municipally owned utility selling at wholesale is not considered to be an alternative electric supplier and is not subject to regulation by the commission.

(10) If a municipally owned utility complies with subsection (4)(a), (b), and (e) and is a member of a joint agency established under the Michigan energy employment act of 1976, 1976 PA 448, MCL 460.801 to 460.848, it may with the consent of the joint agency assign to the joint agency an amount of load up to the amount that it is allowed to serve as an electric supplier under subsection (4)(d), for the purpose of allowing the joint agency the opportunity to sell retail electric generation as an electric supplier, if the joint agency complies with sections 10a(3), 10q, 10r, and 10t and obtains a license under section 10a(2).

(11) This section shall not be construed to impair the contractual rights of a municipally owned utility or customer under an existing contract.

(12) Contracts or other records pertaining to the sale of electricity by a municipally owned utility that are in the possession of a public body and that contain specific pricing or other confidential or proprietary information may be exempted from public disclosure requirements by the governing body of a municipally owned utility. Upon showing of good cause, disclosure subject to appropriate confidentiality provisions may be ordered by a court or the commission.

(13) This section does not affect the validity of the order relating to the terms and conditions of service in the Traverse City area that was issued August 25, 1994, by the commission at the request of consumers power company and the light and power board of the city of Traverse City.

(14) Except as otherwise provided under subsections (4)(c), (4)(e), and (10), sections 6l, 10 through 10x, and 10z through 10bb do not apply to a municipally owned utility.

(15) As used in this section:

(a) "Delivery service" means the providing of electric transmission or distribution to a retail customer.

(b) "Municipality" means any city, village, or township.

(c) "Customer account services" means billing and collection, provision of a meter, meter maintenance and testing, meter reading, and other administrative activity associated with maintaining a customer account.

(16) In the event that an entity purchases 1 or more divisions or business units, or generating stations or generating units, of a municipal electric utility, the acquiring entity's contract and agreements with the selling municipality shall require all of the following for a period of at least 30 months:

(a) That the acquiring entity or persons hires a sufficient number of employees to safely and reliably operate and maintain the station, division, or unit by first making offers of employment to the workforce of the municipal electric utility's division, business unit, or generating unit.

(b) That the acquiring entity or persons not employ employees from outside the municipal electric utility's workforce unless offers of employment have been made to all qualified employees of the acquired business unit or facility.

(c) That the acquiring entity or persons have a dispute resolution mechanism culminating in a final and binding decision by a neutral third party for resolving employee complaints or disputes over wages, fringe benefits, and working conditions.

(d) That the acquiring entity or persons offer employment at no less than the wage rates and substantially equivalent fringe benefits and terms and conditions of employment that are in effect at the time of transfer of ownership of the division, business unit, generating station, or generating unit. The wage rates and substantially equivalent fringe benefits and terms and conditions of employment shall continue for at least 30 months from the time of the transfer of ownership unless the employees, or where applicable collective bargaining representative, and the new employer mutually agree to different terms and conditions of the employment within that 30-month period.

(e) An acquiring entity is exempt from the obligations in this subsection if the selling municipality transfers all displaced municipal electric utility employees to positions of employment within the municipality at no less than the wage rates and substantially equivalent fringe benefits and terms and conditions of employment that are in effect at the time of transfer. The wage rates and substantially equivalent fringe benefits and terms and conditions of employment shall continue for at least 30 months from the time of the transfer unless the employees, or where applicable collective bargaining representative, and the municipality mutually agree to different terms and conditions of the employment within that 30-month period.

History: Add. 2000, Act 141, Imd. Eff. June 5, 2000
Popular Name: Customer Choice and Electricity Reliability Act