In re Michigan Consolidated Gas Co.
304 Mich. App. 155
Mich. Ct. App.2014Background
- Consolidated appeals challenge PSC orders repricing MGAT exchange-gas purchases (April 2009–Sept 27, 2010) under a city-gate index pricing shift adopted Sept 28, 2010.
- GCR reconciliation cases under MCL 460.6h(12) assess reasonableness and prudence of expenses after the fact.
- PSC orders directed pricing MGAT exchange gas at city-gate index rates prospectively after Sept 28, 2010, but the record included purchases before that date.
- Appellant contends the PSC retroactively applied city-gate pricing to pre- Sept 28, 2010 purchases in reconciliation, which should be prospective only.
- PSC eventually vacated the challenged portions and remanded for further proceedings, affirming on other matters.
- Court notes that retroactive-rate-making is generally prohibited absent statutory authorization, but reconciliation proceedings may refine costs authorized by GCR plans.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did PSC exceed its authority by using reconciliation to adjust MGAT pricing? | MichCon argues PSC improperly used reconciliation to change pricing. | PSC contends reconciliation allows adjustments to enforce cost-minimization actions. | PSC did not exceed its authority. |
| Was the pricing change retroactive rate-making part of the PSC’s actions? | MichCon argues retroactive ratemaking violated statutes and principles. | PSC asserts statutory authorization for after-the-fact adjustments in reconciliation. | Adjustments were not improper retroactive rate-making; statutorily authorized in reconciliation context. |
| Was the PSC’s application of city-gate pricing proper as a prospective policy? | PSC promised prospective application; some purchases occurred before Sept 28, 2010. | PSC interpreted orders to require city-gate pricing for MGAT purchases; applied to all relevant periods. | PSC’s prospective-only policy was not applied consistently; retroactive application occurred; orders partly vacated and remanded. |
Key Cases Cited
- Mich. Consol. Gas Co. v. Pub. Serv. Comm., 389 Mich. 624 (1973) (statutory deference; Reasonableness/prudence in PSC orders)
- Detroit Edison Co. v. Pub. Serv. Comm., 221 Mich. App. 370 (1997) (retroactive ratemaking considerations; agency discretion in costs)
- Mich. Bell Tel. Co. v. Pub. Serv. Comm., 315 Mich. 533 (1946) (retroactive ratemaking; framework for agency pricing decisions)