October 3, 2002

The Michigan Public Service Commission today accepted Consumers Energy Company’s and The Detroit Edison Company’s compliance plans as required by the Commission’s December 4, 2000 code of conduct order.  Today’s order accepts in part and denies in part specific waiver requests from each of the companies.  In separate orders issued today, the Commission addressed the waiver requests of smaller electric utilities.

The Commission stated that many of the products and services for which Detroit Edison and Consumers Energy seek a waiver are requested by customers or are offered in markets that are competitive such as lighting products, surge protectors or carbon monoxide detectors and can be purchased in numerous retail outlets throughout Michigan.  Many of the competitors in those markets are large and well-established, have a national presence, and may have a significant market share.  In these markets, Consumers Energy or Detroit Edison would not seem to have any advantage due to their size or their business experience.   The Commission concludes that, as long as costs are appropriately allocated and regulated operations do not subsidize unregulated services and products, waivers for many of these services are appropriate.

The Commission found, however, that certain services included in Detroit Edison’s and Consumers Energy’s waiver requests, especially those related to heating and air conditioning sales and services, are provided in localized markets characterized by numerous small firms.  The Commission determined that, in those markets, Detroit Edison and Consumers Energy may have a major advantage due to their relatively large size, name recognition, and may unfairly influence local markets.  Therefore, the Commission will require that heating and air conditioning services be provided through full functional separation, preferably through a separate affiliate, and no waivers will be granted for these programs. 

The Commission granted waivers for Detroit Edison over a two-year period to permit the company to provide development support for distributed generation technologies by DTE Energy Technologies.  The Commission concluded that the use of distributed generation technologies for customer-based generation and in support of the company’s distribution system potentially is innovative, improves efficiency and reduces both the company’s and its customers’ costs of electricity.

“The Commission has provided flexibility to Consumers Energy and Detroit Edison by granting requests for waivers from selected provisions of the code,” said Chairman Laura Chappelle.  “The additional flexibility requires the Commission and MPSC staff to be diligent in preventing cross-subsidization between utilities and their non-regulated operations and affiliates.  Therefore, the Commission will require each company to continue to file annual reports that contain crucial information, as outlined in today’s order, relating to affiliate relations.”

Detroit Edison is headquartered in Detroit and provides electric service to about 2.1 million customers in Southeastern Michigan.  Consumers Energy, headquartered in Jackson, provides electric service to about 1.7 million customers in Michigan’s Lower Peninsula.

The MPSC is an agency within the Department of Consumer and Industry Services.

Case No. U-12134