November 25, 2003

The Michigan Court of Appeals has affirmed the Michigan Public Service Commission on several electric retail choice matters, including the recovery of net stranded costs.

Detroit Edison and Consumers Energy had filed the lawsuit against the Commission based upon orders the Commission issued pursuant to the Customer Choice and Electricity Reliability Act (Public Act 141).   In Consumers Energy Co, et al and The Detroit Edison Co. vs. MPSC (Case No. 241990), the Court affirmed the Commission’s December 20, 2001 and May 16, 2002 opinions and orders in Case No. U-12639 by holding that the orders were both lawful and reasonable. 

Specifically, the Court held that:

• until a full rate case is decided, it was reasonable and lawful for the Commission to impose an offsetting credit to certain full service and retail access customers to ensure that these customers did not pay twice for the same electric service;
• the Commission properly rejected Consumer Energy’s proposed skewing adjustment, thus adhering to the law’s requirement that bars the reallocation of cost responsibility among customer classes; and
• the Commission’s decision on net stranded costs, including the deferral of certain implementation costs, during the rate freeze, was consistent with the law.

“The Commission is pleased that these important orders were unanimously upheld,” said MPSC Chair J. Peter Lark.  “It certainly demonstrates that the Commission has issued orders on stranded costs and offsets in a lawful manner that is fair and balanced to all parties.”

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

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