Energy Law Updates

Public Acts 341 and 342 were passed on December 15, 2016, and signed by Governor Rick Snyder on December 21, 2016. PA 341 updates Michigan’s energy laws relating to utility rate cases, electric choice, certificate of necessity, and electric capacity resource adequacy, and establishes an integrated resource planning process. PA 342 updates Michigan’s energy laws relating to renewable energy, energy waste reduction, and distributed generation, and allows utilities to implement on-bill financing programs. The laws take effect on April 20, 2017.

Below, you will find general information about implementation tasks, staff leads for each of the tasks, implementation status updates, and ways to keep informed of stakeholder engagement opportunities. Click here to receive email updates.

Task Description Statutory Section Staff Lead(s)
Rate Case and Certificate of Necessity (CON)
Rate Case Filing Requirements

The new energy law shortens the deadline for rate cases to be completed from 12 months to 10 months. It also removes the ability of utilities to “self-implement” new rates after 6 months if a final order has not been issued by the MPSC. Existing filing requirements need to be updated to account for these, and related, changes.

MCL 460.6a Bill Stosik
Certificate of Necessity Filing Requirements

Electric utilities are able to apply to the MPSC for a Certificate of Necessity to obtain new electric generation resources. The new energy law made changes to these provisions, and existing CON filing requirements need to be updated to account for these changes.

MCL 460.6s Naomi Simpson
Integrated Resource Planning Process
Integrated Resource Plan (IRP) Statewide Parameter Setting/Modeling The new energy law requires rate-regulated electric utilities to submit integrated resource plans to the MPSC for review and approval. The law also requires that the MPSC hold a collaborative proceeding to take input from the Michigan Agency for Energy (MAE), Department of Environmental Quality (DEQ), and the public, to set modeling parameters and assumptions for utilities to use in filing integrated resource plans. MCL 460.6t Cathy Cole, Bonnie Janssen, Mary Maupin
Integrated Resource Plan (IRP) Filing Requirements/Schedule

The new energy law requires rate-regulated electric utilities to submit integrated resource plans to the MPSC for review and approval. The law also requires the MPSC to set a schedule and establish filing requirements for utility integrated resource plan filings.

MCL 460.6t Cathy Cole
Demand Response (DR) Potential Study As part of the collaborative proceeding to set modeling parameters and assumptions for utilities to use in filing integrated resource plans, the MPSC is required to conduct a study to determine the potential to use demand response resources to meet electric needs. MCL 460.6t Dave Isakson
Energy Waste Reduction (EWR) Potential Study

As part of the collaborative proceeding to set modeling parameters and assumptions for utilities to use in filing integrated resource plans, the MPSC is required to conduct a study to determine the potential to use energy waste reduction resources to meet electric needs.

MCL 460.6t Patricia Poli
Resource Adequacy
Resource Adequacy Process Implementation

Provisions in the new energy law require all electric providers to demonstrate to the MPSC that they have enough resources to serve the anticipated needs of their customers. In certain areas of the state where some customers are served by non-utility electric providers under the electric choice program, the MPSC is also required to determine a generation capacity charge.

MCL 460.6w Eric Stocking
Electric Choice
Electric Choice Implementation The new energy law updates provisions related to the electric choice program, which allows up to 10% of the electric load in a utility’s service territory to choose a non-utility provider of electric generation service. The MPSC needs to modify existing electric choice provisions to reflect these changes. MCL 460.10a Heather Cantin
Renewable Energy
Renewable Energy (RE) Plan Cases The new energy law increases the amount of energy that electric providers are required to produce from renewable sources to 15% of their production by 2021. The MPSC needs to review electric providers’ plans to meet this requirement. MCL 460.1022 et seq. April Stow
Green Pricing Programs Under the new energy law, electric utilities are required to offer “green-pricing programs” which allow their customers to purchase electricity generated by renewable energy sources. The MPSC needs to work with electric providers to implement these new provisions. MCL 460.1061 Katie Trachsel
Distributed Generation
Distributed Generation Program

The new energy law requires the MPSC to create a new distributed generation program within 90 days of the law’s effective date. The MPSC is also required to conduct a study by April 20, 2018, on an appropriate cost-of-service tariff for customers who participate in net metering or distributed generation programs by.

MCL 460.1171 et seq.

MCL 460.6a

Julie Baldwin, Jesse Harlow
Energy Waste Reduction
Energy Waste Reduction Program Updates

Energy waste reduction programs help participants use less energy, and lower overall costs for utility companies, helping all utility customers save money. The new energy law makes a number of changes to these provisions, and the MPSC needs to work with utilities and other interested parties to implement these changes.

MCL 460.1071 et seq Patricia Poli
On-Bill Financing Implementation/Rulemaking Under the new energy law, rate-regulated utilities may offer residential customers the option to finance home energy improvement projects, and the ability to pay off the costs of those projects on their utility bill. The MPSC and MAE will work with utilities and other interested parties to create a framework for “on-bill financing” programs. MCL 460.1201 et seq Patricia Poli, Madhu Anderson
Demand Response
Demand Response Implementation The new energy law requires the MPSC to promote voluntary load management programs such as demand response programs, time-of-use and peak pricing, and remote shut off of air conditioning, and requires certain utility companies to offer MPSC-approved demand response programs. The MPSC will work with providers and interested parties to implement these provisions. MCL 460.1095 Dave Isakson
Other Items
PURPA Avoided Cost Review PURPA is a federal law which requires electric utilities to purchase electricity from certain generators that use renewable energy and cogeneration resources. The MPSC is required to determine the rate that a utility must pay these generators. The new energy law creates a process for MPSC review of these “avoided cost” rates. MCL 460.6v Merideth Hadala
Performance Based Regulation (PBR) Report

The new energy law requires the MPSC to complete a study on “performance-based regulation” of utility companies by April 20, 2018.

MCL 460.6u Patrick Hudson
Code of Conduct / Value-Added Programs Under the new energy law, the MPSC is required to establish a code of conduct that applies to electric, natural gas, and steam utilities, and which is intended to prevent cross-subsidization, preferential treatment, and information sharing, between a utility‘s regulated services and unregulated programs and services. The law also allows utility companies to offer their customers “value-added programs and services.” The MPSC needs to undertake a rulemaking process to implement these provisions. MCL 460.10ee Lisa Gold,
Mike Byrne