In re Detroit Edison Co.
296 Mich. App. 101
| Mich. Ct. App. | 2012Background
- ABATE and the Attorney General appeal a January 2010 PSC opinion/order involving Detroit Edison rate actions under Act 286.
- Detroit Edison filed Case U-15751 (Jan 5, 2009) to realign retail electric rates for educational institutions and sought surcharges or a regulatory asset to recover revenue shifts.
- Detroit Edison filed Case U-15768 (Jan 26, 2009) seeking $378 million rate increase and authorization for various riders, trackers, and an UETM, plus amendments to rate schedules.
- PSC authorized a rate decoupling mechanism (RDM), funding for the LIEEF as O&M, four trackers, and AMI program funding.
- ABATE challenged the RDM, LIEEF funding, AMI program, and peak-demand methodology changes; the Court remanded the AMI issue, reversed the RDM and LIEEF funding, and affirmed the peak-demand decision.
- The Court ultimately affirmed in part, reversed in part, and remanded for further proceedings consistent with its opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PSC exceeded authority by approving a rate decoupling mechanism for electric providers | ABATE argues PSC lacked statutory authorization | PSC contends statutory framework permits RDM under certain conditions | PSC exceeded authority; RDM reversed |
| Whether PSC erred in funding LIEEF from ratepayers | ABATE contends LIEEF funding lacks authorization after removal of enabling act | PSC relied on residual regulatory powers to fund LIEEF | PSC reversal; LIEEF funding improper |
| Whether tracking mechanisms and uncollectible expense true-up are permissible | ABATE argues trackers constitute retroactive ratemaking without authorization | Tracking mechanisms approved to adjust future rates for past expenses are permissible | Tracking mechanisms approved; not exceeding authority (prospective recovery) |
| Whether Advanced Metering Infrastructure (AMI) funding is supported by record | AMI is experimental and lacks solid evidence of benefit | AMI pilot justified; evidence sufficient for rate impact | Remand for full evidentiary hearing; amends to require robust record on costs/benefits |
| Whether peak-demand calculation method complies with statutory language | ABATE asserts MH4CP should remain as legislatively prescribed | PSC has discretion to choose 12CP given silent statutory language | PSC correctly used 12CP; affirmed in part, reversed in part, remanded for consistency |
Key Cases Cited
- Mich. Consol. Gas Co v Pub. Serv. Comm., 460 Mich 148 (1999) (agency powers are limited to those conferred by clear language)
- In re Application of Mich. Consol. Gas Co to Increase Rates, 293 Mich App 360 (2011) (review for unlawful/ unreasonable PSC orders; substantial evidence required)
- In re Consumers Energy Co for Rate Increase, 291 Mich App 106 (2010) (tracking mechanisms approved; retroactive ratemaking rules; UETM)
- Attorney General v Pub. Serv. Comm No 2, 237 Mich App 82 (1999) (deference to PSC but need for statutory basis)
- Residential Ratepayer Consortium v Pub. Serv. Comm., 239 Mich App 1 (1999) (experimental rates and need for test basis)
- Ford Motor Co v Unemployment Compensation Comm, 316 Mich 468 (1947) (statutory interpretation and not enlarging agency powers)