December 18, 2003

The Michigan Public Service Commission (MPSC) today issued an order remanding for rehearing and clarification Consumers Energy Company’s case dealing with its sale of securitization bonds.  A prehearing conference has been scheduled for Jan. 13, 2004.

The Commission on June 2, 2003 granted the company authority to securitize up to $554,323,000 of its qualified costs.

Consumers on July 1, 2003 field a petition for rehearing and clarification of certain portions of the Commission’s June 2, 2003 order.

Today’s order grants in part and rejects in part Consumer’s application for rehearing.  The Commission finds that Consumers’ concern regarding unintended consequences of its previous order should be the subject of further scrutiny and reevaluation by the Commission.

The Commission determined that it cannot act on Consumers’ proposal to modify the Commission’s order without additional evidentiary hearings. 

Of particular concern to the Commission is the allegation that its June 2, 2003 order may not result in the highest possible rating for Consumers’ securitization bonds, something necessary to ensure that ratepayers receive the most benefit of savings derived through securitzation.

In today’s order, the MPSC also takes the unusual step of delineating two issues on which it intends to focus.   First, the Commission is concerned by challenges to its June 2 order with regard to the issue of “non-bypassability,” whether the entire securitization charge should be paid by both tariff and retail open access customers.  Second, the Commission is concerned by the allegations of unfairness on the part of retail open access customers concerning the extent to which they could be “double-charged” for Clean Air Act compliance costs. 

Today’s remand order provides the parties in this proceeding with an additional opportunity to present evidence and argument on these issues.

Chair J. Peter Lark abstained in this case due to prior involvement.

The MPSC is an agency within the Department of Labor & Economic Growth.

Case No. U-13715

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