Gas customer choice appears to be taking hold in yet anotherstate, as the Michigan Public Service Commission last week adoptedterms and conditions to make gas choice programs for residentialand commercial customers a permanent fixture in the state.

Commission Chairman John Strand said “Today’s action reinforcesthe Commission’s belief that flexible regulatory mechanisms areappropriate in the dynamic natural gas industry.”

The action follows a commission-ordered collaborative processconducted by the commission staff involving Michigan Consolidated Gas(MichCon), Consumers Energy Co., SEMCO Energy Gas Co. and otherinterested parties to develop uniform terms for Michigan’s natural gaschoice program (see Daily GPI, Aug. 7). On Sept. 22, staff submitted itsreport to the commission and interested parties filed comments on it.

In the order, the commission recognized among other things, thata customer choice program established for larger local distributioncompanies (LDCs), would not be adequate to impose on smaller LDCs.The commission stated that it would allow smaller regulated LDCs todevelop tailored customer choice programs on their own time frame.

The comments the commission received were mixed, with someutilities agreeing with the majority of staff’s recommendations,while others requested more time. The one common factor was thatall the companies offered minor amendments.

Consumers Energy agreed with the majority of the staff’s report.”In general, Consumers Energy Co. believes the report and relateddocuments reflect a reasonable balancing of the various intereststhat were represented at the collaborative meetings,” the companysaid. Consumers thought a program based on the report could be”implemented in a fairly expeditious manner.” It only had a fewrecommendations and changes.

SEMCO on the other hand, found that there was not enough time toarrive at a decision. “Additional time is still available beforethe expiration of SEMCO’s choice program, during which SEMCO wouldlike the opportunity to explore and discuss its options with thestaff and commission,” said the company.

Michigan Gas Utilities (MGU), an LDC serving about 150,000Michigan customers supports the concept of voluntary customerchoice programs. “MGU will be working with SEMCO to develop a draftplan of permanent customer choice program that will be submitted tostaff by Jan. 1, 2001,” MGU said. “This proposed draft will bedesigned to meet the operational needs of the mid-sized utilitiesand will contain as much detail as is practical in the timeframegiven to the final plan.” MGU hopes to implement a customer choiceprogram for its customers around spring 2002.

The commission also ordered that unbundling should be consideredfor other services provided by Michigan’s major utilities withinone year of this order, and that the commission staff shoulddevelop a customer education program with the help of majorstakeholders.

While the three-year terms of the MichCon and SEMCO pilots rununtil March 31, 2002, that of Consumers Energy, which was initiateda year earlier, expires next April 1. The three companies providenatural gas for approximately 94% of retail gas customers in thestate.

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