Enbridge Energy Limited Partnership v. Upper Peninsula Power Co
313 Mich. App. 669
| Mich. Ct. App. | 2015Background
- UPPC filed for a >$12 million electric rate increase in 2009; parties (including PSC Staff) signed a settlement that implemented a revenue decoupling mechanism (RDM) for UPPC for test year 2010 and the PSC approved it.
- Enbridge, not a party to the original rate case, later challenged the PSC’s authority to approve the RDM and filed a formal complaint after the PSC denied its rehearing petition for lack of standing.
- This Court decided Detroit Edison while UPPC’s RDM reconciliation was pending, holding MCL 460.1097(4) authorizes only study/reporting for electric RDMs and does not authorize implementation (contrasting the explicit gas-utility RDM authorization in MCL 460.1089(6)).
- The PSC defended approval of the settlement-RDM by relying on its general rate-setting authority and Dodge v Detroit Trust Co, arguing it could approve settlements that resolve disputed legal questions.
- The PSC dismissed Enbridge’s complaint; on appeal the Court (Saad, J.) reviewed whether the PSC exceeded its statutory authority by approving an RDM for an electric utility via settlement and reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSC had authority to approve settlement implementing an RDM for an electric utility | Enbridge: Act 295’s MCL 460.1097(4) does not authorize implementation; PSC exceeded statutory authority | PSC: General rate-setting power and precedent (Dodge) allowed approval of settlement resolving legal dispute | Court: PSC exceeded its statutory authority; Act 295 does not permit electric RDM implementation |
| Whether approval of an unlawful RDM via settlement is saved by settlement-doctrine | Enbridge: Settlement cannot legalize an action contrary to clear statutory limits, especially where non-parties are bound | PSC: Settlement resolves disputed legal issues and should be upheld under Dodge | Court: Dodge inapposite — statute was clear, no reasonable dispute, and regulatory settlements bind many nonparties, so settlement cannot authorize ultra vires act |
| Whether PSC order dismissal for lack of standing was proper | Enbridge: PSC should adjudicate complaint challenging PSC’s statutory authority | PSC: Initially denied rehearing for lack of standing; later treated matter on motions and dismissed on merits | Court: Reversed dismissal; substantive ruling that PSC lacked authority to approve RDM remains controlling |
| Standard of review applicable to PSC statutory authority | Enbridge: De novo review of whether PSC exceeded statutory authority | PSC: Deference to PSC statutory construction where ambiguous | Court: De novo review for scope of authority; gave deference only where statute ambiguous — here statute clear against electric RDMs |
Key Cases Cited
- Detroit Edison Co. v. Public Service Commission, 296 Mich. App. 101 (court held MCL 460.1097(4) authorizes study/reporting only and not implementation of electric RDMs)
- Dodge v. Detroit Trust Co., 300 Mich. 575 (settlement resolving disputed legal issue will generally be upheld)
- Michigan Electric Cooperative Ass’n v. Public Service Commission, 267 Mich. App. 608 (agency has only authority expressly granted by Legislature)
- In re MCI Telecommunications Complaint, 460 Mich. 396 (standard for overturning PSC orders; must follow mandatory statute or show abuse of discretion)