Great Wolf Lodge of Traverse City, LLC v. Public Service Commission
799 N.W.2d 155
Mich.2011Background
- Cherryland Electric Cooperative entered and maintained electric service to buildings and facilities on the Oleson farm property for decades; after demolition and change of ownership, plaintiff Great Wolf Lodge sought to obtain service from TCLP or another provider; the PSC found Cherryland had the right to serve the entire premises under Rule 411(11) and dismissed other relief; Cherryland continued to serve Great Wolf Lodge at issue-raising rates (LRS vs LCI) after PSC 2004 order; the PSC fined Cherryland in 2004 for improper rate, later actions led to refunds plus questions of interest and penalties; the Michigan Court system analyzed whether Rule 411(11) ties entitlement to the original buildings and facilities and whether demolition extinguishes the right to serve the premises.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Rule 411(11) extend the first-entitlement right to the entire premises even after the initial customer disappears? | Cherryland retains entitlement to serve entire premises regardless of customer changes. | Rule 411(11) ties entitlement to the premises and buildings served, not to the owner or customer changes. | Yes; first entitlement extends to entire premises despite changes in the customer. |
| Is the PSC required to award interest on a refund? | Interest should be included as part of the refund. | No statutory requirement to award interest; PSC has discretion. | No; PSC not required to award interest. |
| Is a fine required under MCL 460.558 whenever a utility fails to comply with a PSC order? | Penalty should apply for violation of order. | Fine only if failure was wilful or knowing. | Fine required only for wilful or knowing noncompliance. |
| Did demolition of all buildings extinguish Cherryland's status as serving utility to the property under Rule 411(11)? | Demolition does not affect entitlement; premises still tied to first utility. | Demolition ends the existing customer on the property, extinguishing entitlement. | Demolition extinguishes entitlement; no ongoing right to serve the premises. |
Key Cases Cited
- Detroit Edison Co v Pub Serv Comm, 155 Mich App 461 (1986) (agency may award interest; not mandatory)
- Consumers Energy Co v Pub Serv Comm, 255 Mich App 496 (2003) (Meijer case on Meijer property Meijer treated as existing customer; urged interpretation of Rule 411)
- In re Complaint of Consumers Energy Co, 255 Mich App 496 (2003) (Meijer property Meijer case central to Rule 411 interpretation)
- Great Wolf Lodge of Traverse City, LLC v Pub Serv Comm, 285 Mich App 26 (2009) (Rule 411 interpretation; premises vs buildings; remand guidance)
- In re MCI Telecom Complaint, 460 Mich 396 (1999) (standard of review for agency interpretations)