June 12, 2007

The Michigan Public Service Commission (MPSC) today directed the MPSC staff to begin and manage a collaborative proceeding for a demand response pilot program.

Demand response programs are customer-driven efforts that reduce electric consumption in response to price signals, incentives, or information from electric grid operators. The programs are intended to reduce electric demand during periods of high wholesale prices, providing an alternative to building new generation capacity. Demand response programs help address short-term reliability concerns and provide customers with an opportunity to manage their electric energy costs. These programs will enable customers to save on energy costs by shifting their consumption patterns to less expensive times of the day. Although utilities in Michigan currently provide demand response programs, customer participation is low, and new technology is available to improve the program's performance.

"The 21st Century Energy Plan released earlier this year demonstrated the potential value of demand response programs in Michigan," said MPSC Chairman J. Peter Lark. "The collaborative proceeding will put in place pilot programs that will implement the latest technological advances to help customers reduce their electric bills, will reduce the need for additional electric generation, and will allow customers to use power when it is least expensive."

In its order, the Commission directed the collaborative process to include pilot programs that emphasize the use of "smart" metering, advanced technology, and time-based or real time rate structures, in particular assessing the impact of time-based rates on customer demand for electricity. Customers would be allowed to participate in these programs on a voluntary basis.

The MPSC staff will file a report at the end of one year describing the status of the collaborative and a final report when the collaborative is complete, with recommendations on whether to expand the program.

The Commission is requiring all regulated electric distribution companies to participate in the collaborative and invites participation from other interested parties.

The MPSC notes that public comments may be submitted in this case. Comments may be e-mailed to mpscefilecases@michigan.gov. Written comments should be mailed to the Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909. All comments on demand response should reference Case No. U-15277. All information submitted to the Commission in this matter will become public information, available on the Commission's Web site, and subject to disclosure.

Regulated electric utilities in Michigan are:

Alpena Power Company, Consumers Energy Company, The Detroit Edison Company, Edison Sault Electric Company, Indiana Michigan Power Company, Xcel Energy, Upper Peninsula Power Company, We Energies, Wisconsin Public Service Corporation, Alger Delta Cooperative Electric Association, Cherryland Electric Cooperative, Cloverland Electric Cooperative, Great Lakes Energy Cooperative, Tri-County Electric Cooperative, Midwest Energy Cooperative, The Ontonagon County Rural Electrification Association, Presque Isle Electric & Gas Co-op, and Thumb Electric Cooperative of Michigan.

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

Case No. U-15277