Michigan Adopts Permanent Gas Choice Program Terms
Despite trouble in the retail market in several states this
year, gas customer choice appears to be making a little progress.
The Michigan Public Service Commission has adopted terms and
conditions to make gas choice programs for residential and
commercial customers a permanent fixture in the state.
This "action reinforces the Commission's belief that flexible
regulatory mechanisms are appropriate in the dynamic natural gas
industry," said Commission Chairman John Strand. It follows a
commission-ordered collaborative process conducted by the
commission staff involving Michigan Consolidated Gas (MichCon),
Consumers Energy Co., SEMCO Energy Gas Co. and other interested
parties to develop uniform terms for Michigan's natural gas choice
program. On Sept. 22, staff submitted its report to the commission
and interested parties filed comments on it.
In the order, the commission recognized among other things, that
a customer choice program established for larger local distribution
companies (LDCs) would not the right model for smaller LDCs. The
commission encouraged smaller regulated LDCs to develop tailored
customer choice programs according to their own time frame. The gas
division of the commission plans to work with smaller LDCs such as
WPS Corp., Xcel Energy and Peninsular Gas to help them implement
their own programs.
The comments the commission received were mixed, with some
utilities agreeing with the majority of staff's recommendations but
others requesting more time. The one common factor was that all the
companies offered changes to proposed rules.
After the order was issued, Consumers Energy filed to expand its
program and make it permanent. Using a phased-in approach,
Consumers will expand to 600,000 customers beginning April 1, 2001,
then to 900,000 on April 1, 2002, and to all customers by April 1,
Semco told the commission there was not enough time for it to
make a decision on the proposal. "The time constraint that was
imposed upon the participants, as well as the process as a whole,
did not provide adequate time to explore and evaluate what Semco
believes to be other viable options," Semco said in its comments.
"Additional time is still available before the expiration of
Semco's choice program, during which Semco would like the
opportunity to explore and discuss its options with the staff and
Michigan Gas Utilities (MGU), an LDC serving about 150,000
Michigan customers, said it supported the concept of voluntary
customer choice programs. "MGU will be working with Semco to
develop a draft plan of permanent customer choice program that will
be submitted to staff by Jan. 1, 2001," MGU said. "This proposed
draft will be designed to meet the operational needs of the
mid-sized utilities and will contain as much detail as is practical
in the time frame given to the final plan." MGU hopes to implement
a customer choice program for its customers around spring 2002.
The commission also ordered that unbundling should be considered
for other services provided by Michigan's major utilities within
one year of this order and that the commission staff should develop
a customer education program with the help of major stakeholders.
The MichCon and Semco pilots run until March 31, 2002. The
Consumers Energy pilot expires next April. The three companies
provide natural gas for 94% of retail gas customers in the state.