Alternative Energy Providers

In Michigan, the Public Service Commission has clarified its regulations regarding limits on the number of customers that can be served by alternative electric suppliers (AESs) within any one electric utility's service territory. 

The commission noted that recent changes in the state's energy laws had capped the percentage of ratepayers that can purchase power from AESs at 10 percent of a utility's customer load. But, the commission added, that cap is actually reduced to zero for those smaller utilities serving fewer than 200,000 customers. 

However, because that exemption was set forth in the statute as having a six-year sunset date, questions had arisen as to from what point in time that six-year period runs. In reviewing the matter, the commission commented that electric choice and the introduction of AES offerings began in 2013, with the amended energy legislation taking effect on April 20 of this year. 

Therefore, the commission ruled, the first four years of the six-year timetable should start on April 20, 2013 and go through April 20, 2017. The next two years will be measured from that date, such that the waiver of the 10 percent limit will be eliminated in 2019. The commission pointed out that the exception to the 10 percent cap likewise is no longer available if a smaller utility ends up having customers who purchased power from an AES in the previous year. 

The commission underscored the fact that the law was crafted to promote retail competition while not simultaneously destabilizing the revenue bases of incumbent utilities. (Case Nos. U- 15801 et al.)