Consumers Energy Co. v. Public Service Commission No. 2
Consumers Energy Co. v. Public Service Commission No. 2
Opinion of the Court
i
Consumers Energy Company (Consumers) appeals from the Michigan Public Service Commission’s order that approved the 1999 implementation expenses incurred by Consumers to establish a retail open access (ROA) program, but which deferred recovery and held that these implementation expenses could be adjusted upon further review. We remand for further proceedings.
ii
Under the ROA program, retail customers of electric utilities can choose to purchase electricity from suppliers other than Consumers. However, the electricity generated by these alternative suppliers would be transmitted to the customer through the existing system. The PSC originally initiated the ROA program, but in
No later than January 1, 2002, the commission shall issue orders establishing the rates, terms, and conditions of service that allow all retail customers of an electric utility or provider to choose an alternative electric supplier. The orders shall provide for full recovery of a utility’s net stranded costs and implementation costs as determined by the commission. [Emphasis added.]
Consumers filed an application seeking PSC authorization to recover its 1999 implementation costs. The PSC held that “ [implementation costs of $25,156,000 incurred by Consumers during 1999 should be approved for deferred recovery, subject to the conditions stated in this order.” The condition at issue provided that the PSC “reserves the right to undertake another review of Consumers’ 1999 implementation expenditures” because the PSC anticipated that it would acquire additional information that would help it evaluate the implementation of the ROA program. The PSC also noted that MCL 460.10d(1) had imposed a rate freeze, and indicated that it would permit recovery of prudently incurred implementation costs at the end of the rate freeze. The PSC further directed:
*458 Consumers should file an application and supporting documentation that provides the Commission with a factual basis for reviewing the success of Consumers’ implementation efforts. Specifically, the Commission is looking for evidence that any component, system, or procedure that is necessary for a retail access program to fully function is in place, completely operational, and capable of seamlessly performing its role in conjunction with the other necessary components, systems, and procedures.
Consumers contends that “full recovery” by January 1, 2002, as mandated by the Legislature in MCL 460.10a(1) means that the PSC had to approve the amount to be recovered by that date without making this determination conditional on a future review.
While a PSC order is presumed to be lawful, it is unlawful if it is based on an erroneous interpretation or application of the law. In re Complaint of Pelland Against Ameritech Michigan, 254 Mich App 675, 681-682; 658 NW2d 849 (2003). Considerable deference is generally shown to an administrative agency for longstanding interpretations of statutes. Although some deference is afforded to the PSC due to its institutional position when initially interpreting a new statute, the deference afforded is less. In re Procedure & Format for Filing Tariffs Under the Michigan Telecommunications Act, 210 Mich App 533, 538-539; 534 NW2d 194 (1995). This Court may not abandon or delegate its responsibility to interpret statutory language and legislative intent. In re Complaint of Pelland, supra.
Consumers argues that the PSC had already made a determination of the methodology for determining a full recovery of implementation costs because, in its earlier orders, it had provided for annual prudence reviews of these costs. Consumers maintains that these earlier orders must be enforced under MCL 460.10a(5). However, this provision states that “orders that determine and authorize recovery of... implementation costs . .. are in compliance with this act and enforceable by the commission.” The PSC had not issued any orders determining and authorizing recovery of 1999 implementation costs before enactment of the statute. Previous orders providing for annual prudence reviews do not necessarily constitute orders determining and authorizing recovery of implementation costs.
Nonetheless, we conclude that in requiring that the PSC “provide for full recovery” of implementation costs in an order issued by January 1, 2002, the Legislature did not intend to allow the PSC to adopt a methodology that would indefinitely defer the determination of the amount to be allowed. An approval made contingent on future unknown facts that may indeed eradicate the
To ensure that the Legislature’s intent, expressed in MCL 460.10a(1), is not frustrated by endless delays, and to ensure that the PSC’s orders are sufficiently comprehensive and detailed to allow for informed judicial review, we remand for further proceedings that adhere to the requirements and schedules set below.
in
PROCEDURE AFTER REMAND
A. Hearing and Orders. The PSC will (1) convene a hearing no later than ninety days from the release of
B. Information Regarding Implementation Costs. Because the PSC has said that it does not have sufficient data to make its determination regarding implementation costs, within thirty days from the release of this opinion, the PSC will serve upon Consumers its request for data that sets forth with reasonable detail all the data the PSC needs to conduct a hearing and a prudency review. Within thirty days of receipt of this request, Consumers will serve the PSC with all the information requested by the PSC (to the extent it is within Consumers’ ability to do so), and will also serve on the PSC any other relevant information that Consumers believes is germane to the issue of its right to recover its implementation costs. The PSC and Consumers may supplement the request for and submission of data, respectively, as is reasonable, during the course of the hearing.
C. Time Deadlines. The PSC and Consumers, may stipulate extensions of time in which to (1) request data, (2) supply data, (3) conduct a hearing, and (4) issue an order, but there shall be no more than one adjournment of any date and for no longer than thirty days.
See our Court’s similar decision in Detroit Edison Co v Public Service Comm, 261 Mich App 448; 683 NW2d 679 (2004).
Consumers has not argued that the PSC was required to issue an order that provided for actual recovery by January 1, 2002. Thus, we need not, and therefore do not, address whether implementation expenses, as qualified expenses under MCL 460.10h(g), could have been recovered through securitization under MCL 460. lOi.
Reference
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- CONSUMERS ENERGY COMPANY v. PUBLIC SERVICE COMMISSION NO 2
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