Appellants in these three cases appeal as of right from the December 19, 1997, order of the Michigan Public Service Commission in which the PSC approved Consumers Energy Company’s application for a voluntary three-year experimental pilot program. We affirm.
*3 The Expanded Gas Customer Choice (egcc) program approved by the psc allowed Consumers to expand its gas transportation program, suspended Consumers’ gas cost recovery (GCR) clause, froze Consumers’ rates at the then current level, and implemented a revenue sharing program that provides customers with a refund if Consumers’ earnings exceed a particular level during the term of the program. Appellants contend that the PSC was without authority to suspend a GCR clause and that, even if it had such authority, it should not have done so without a formal hearing because the order increased rates. Appellants also contend that the order is a violation of the statutory requirement that GCR factors be reconciled annually with actual revenues. We disagree.
This Court’s review of an order of the PSC is limited; pursuant to MCL 462.25; MSA 22.44, all rates, fares, charges, classification and joint rates, regulations, practices, and services of the PSC are presumed to be lawful and reasonable.
Attorney General v Public Service Comm,
In
Attorney General, supra,
this Court addressed a similar situation with regard to power supply cost recovery (pscr) factors in the electrical utility industry. The statutory schemes for cost recovery clauses in the natural gas and electrical utility industries are identical save for the fact that one refers to GCR factors and the other refers to pscr factors. For example, MCL 460.6h(2); MSA 22.13(6h)(2) provides: “Pursuant to its authority under this act, the public service commission may incorporate a gas cost recovery clause in the rates or rate schedule of a gas utility, but is not required to do so.” MCL 460.6j(2); MSA 22.13(6j)(2) states: “Pursuant to its authority under this act, the public service commission may incorporate a power supply cost recovery clause in the electric rates or rate schedule of a utility, but is not required to do so.” In
Attorney General, supra,
this Court relied on this discretionary language to hold that the PSC had the authority to suspend the operation of a PSCR clause “at least where the suspension of the PSCR clause will not result in an increase in rates.”
*4 To hold otherwise would require the once-adopted PSCR mechanism to continue into perpetuity; we find nothing in the language of MCL 460.6j; MSA 22.13(6j) to suggest that a pscr clause in perpetuity is the only type of clause contemplated by the Legislature or that such clauses cannot ever be “sunset.” ... We read nothing in the law to suggest that the broad authority of the PSC, including its authority to promulgate pscr clauses, is somehow constrained with respect to its authority to modify the latter, notwithstanding any changes in circumstances that might warrant rescission of such a clause. [231 Mich App 79 -80.]
*5
Moreover, it should be remembered that this matter involves a three-year experimental program. In
Great Lakes Steel Div of Nat’l Steel Corp v Public Service Comm,
Next, appellants argue that even if the PSC had authority to suspend the gcr clause, it committed legal error in doing so without notice or hearing because the suspension resulted in an increase in rates. Had the gcr clause remained operational, they claim, rates would be lower. MCL 460.6a; MSA 22.13(6a) provides in part that changes in rates or rate schedules may be authorized and approved without notice or hearing only if the changes will not result in an increase in cost of service. Just as in the instant matter, in
Attorney General, supra,
the parties challenging the order raised arguments that “focused not on a rate increase directly resulting from suspension of the pscr clause, but on a rate decrease an unsuspended clause might conceivably cause.”
Appellants also argue that the psc’s order should be reversed because there is no reference in the statute to a “gas commodity charge.” However, because the PSC is not bound to apply any particular formula or use any specific method in setting rates, it has the discretion to use whatever terminology it deems appropriate. See
Detroit Edison Co v Public Service
Comm,
Finally, appellants contend that the psc’s order is unlawful because it excuses Consumers from annually reconciling its revenues with its gcr clause as required by MCL 460.6i; MSA 22.13(6i). This issue requires us to construe the statute. The individual provisions of. a statute must be read in context to produce an harmonious whole.
Weems v Chrysler Corp,
In the absence of an operational GCR clause, traditional rate-making procedures come into play in which rates are adjusted prospectively. To require annual reconciliation proceedings in which actual revenues for the preceding year are reconciled with the GCR clause would effectively render the psc’s authority to suspend the GCR clause meaningless because the clause would continue to play a central role in rate-setting procedures. Thus, in order to avoid absurd results, the requirement in MCL 460.6Í; MSA 22.13(6i) that annual reconciliation proceedings be conducted must be construed as applying only when an operational GCR clause is in effect.
Affirmed. 1
Notes
We have been asked to look at the Supreme Court’s decision in
Consumers Power Co v Public Service Comm,