History of the MPSC
In 1873, the Michigan Legislature established the Michigan Railroad Commission, with a single Commissioner, to regulate railroad rates and conditions of service. The Legislature expanded the Commission to a three-member body in 1909, to regulate rail and electric rates and conditions of service. The Michigan Railroad Commission's authority was extended to include telephone service in 1911.
In 1919, the Michigan Railroad Commission was abolished and replaced by the Michigan Public Utilities Commission MPUC), composed of five members. Each member served four year terms. Public Act 419 of 1919 gave the MPUC authority to regulate steam and natural gas, expanding to water carriers (ferry services) in 1921, natural gas pipelines through Public Act 9 of 1929, petroleum pipelines through Public Act 16 of 1929, and motor carriers through Public Act 254 of 1933.
The Michigan Public Utilities Commission was abolished in 1939 and the Michigan Public Service Commission (MPSC) was established, a five member panel with each member serving a five-year term. The Legislature reduced the body to a three member panel in 1947, with members serving staggered six-year terms. At that time, the Legislature imposed the first political restrictions on Commission members since the Railroad Commission had been abolished. MPSC members were prohibited from serving as officers or committee members of any political party organization. In 1951, the Legislature passed Public Act 275, which required that not more than two Commissioners may represent a single political party.
The MPSC first established Gas Safety Standards in 1957, prescribing safety requirements for pipeline facilities used to transport natural gas. In 1969, the Legislature passed Public Act 165, providing for enforcement and penalties. Periodic revisions and updates over the past forty years have kept Michigan's regulations current with federal and state legislative requirements and safety standards.
Water utilities came under MPSC jurisdiction through Public Act 19 of 1967. Commission jurisdiction over these utilities was repealed by Public Act 246 of 1995.
In 1968, the MPSC assumed duties over administration and enforcement of the size, weight, and load of motor carriers from the Department of State Highways. Executive Order 1982-1 transferred the Motor Carrier Enforcement Division to the Department of State Police. The Michigan Legislature amended the Motor Carrier Act in 1982, removing certain constraints on competition and permitting motor carriers to raise or lower rates without Commission approval. The Commission maintained regulatory authority over the rates and services of motor carriers of household goods.
Executive Order 1986-17 merged the Energy Administration of the Michigan Department of Commerce with the MPSC, with the intent to strengthen the regulatory and non-regulatory energy planning, policy and program capabilities for Michigan. The merger also consolidated Michigan's responsibility for energy-related programs within the MPSC.
In 1991, the Michigan Legislature passed the Michigan Telecommunications Act (MTA), in an effort to improve opportunities for economic development and promote customer choice. MTA amendments in 1995, 1997, 2005, and 2011 significantly revamped the MPSC's role in telecommunications regulation. For example, the MPSC no longer regulates the rates for local telecommunications services, and instead competition from both intra- and intermodal technologies governs the local service marketplace. Approximately 200 companies have been granted licenses to provide basic local telephone service in Michigan. The Commission also has responsibility for interconnection agreements between telecommunications providers and in 2017 there were over 300 Commission-approved interconnection agreements in effect.
Beginning in the 1990s, a number of changes occurred at the MPSC designed to streamline operations and improve the competitiveness of Michigan's utility industries. Executive Order 1996-2 transferred energy program functions from the MPSC to the Department of Consumer and Industry Services, which created a State Energy Office to administer these programs. Natural gas customer choice programs have been approved for the four largest natural gas companies in Michigan and more than 400,000 Michigan customers use an alternative gas supplier. In addition, approximately 10% of electric load in Michigan is served by alternative electric suppliers.
Michigan's Customer Choice and Electricity Reliability Act (2000 PA 141) directed the MPSC to issue orders that gave all customers of Michigan's investor-owned utilities the ability to choose an alternative electric supplier. Michigan's electric industry was restructured so that the generation and supply of electricity became open to competitive suppliers. The electric distribution business remained under a regulated monopoly utility structure, but the law provided for the divestiture of transmission assets.
Public Acts 286 and 295 of 2008 authorized energy efficiency programs, required electric utilities to meet a 10 percent renewable portfolio standard, and retained electric choice but capped it at 10 percent of a utility's average weather-adjusted retail sales for the preceding calendar year.
In Nov. 2012, Governor Rick Snyder, delivered a Special Message on Energy and the Environment in which he laid out a vision for a "no regrets" energy policy, one that would be adaptable and built on three pillars: excellent reliability, an affordable price, and a protected environment. The Governor charged the MPSC and Michigan Energy Office with the task of gathering data, reports and public comment related to those issues. That effort resulted in four in-depth reports issued in Nov. 2013 on renewable energy, energy efficiency, electric choice and additional areas.
On Dec. 19, 2013, Gov. Snyder announced his goals for Michigan's "no regrets" energy future with 2025 in mind:
Eliminating energy waste and reducing coal-fired electric generation by replacing it with newer, cleaner technologies.
Improving reliability by reducing the average number of outages and their length and ensuring that Michigan never experiences massive outages due to lack of supply.
Improving affordability by having residential customers spend less on their combined energy bills (electric and natural gas) than the national average and by helping to ensure that energy-intensive industries can choose Michigan for job and investment decisions to better compete.
Improving environmental protection and the health of Michigan citizens by reducing mercury emissions, pollution that creates acid rain, and particles in the air.
Increasing the amount of electricity generated from renewable sources, based on relative cost, reliability and environmental benefits.
Executive Order 2015-10 took effect May 18, 2015, creating the Michigan Agency for Energy (MAE) and transferring the Commission as an autonomous agency from the Department of Licensing and Regulatory Affairs to MAE. The Order transferred the Motor Carrier Division and its authority to the Michigan State Police.
Public Acts 341 and 342 of 2016 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. In order to implement the provisions of PA 341 and 342, the MPSC has created a number of work teams; more information can be found at www.Michigan.gov/energylegislation.