The Michigan Public Service Commission (PSC) completed final action on rehearing orders required to introduce competition to the state’s electric utilities. By a 2-1 vote, the commission adopted a phase-in schedule to allow 2 «% of customers of Consumers Energy and Detroit Edison to select a supplier as early as March 31 if federal regulatory approvals are obtained.

Customer choice would be available in four additional 2 «% blocks on June 30, 1998 and on Jan. 1 1999, 2000, and 2001. In 2002, all remaining customers would be able to choose an alternative power supplier. The PSC previously issued restructuring orders June 5, 1997 and Oct. 29, 1997.

In addition to establishing a schedule for choice, the order resolves potential conflicts with federal tariffs, provides an initial estimation of stranded costs, adds clarity to the annual true-up mechanism, provides latitude in establishing the minimum bid to participate in open access, establishes a process for suspending the power supply cost recovery clauses and clarifies rates for standby service, the PSC said.

Consumers Energy parent CMS Energy said the key elements of the plan that affect the company are:

Full recovery of $1.8 billion of transition costs through a 1.2 cent/kWh transmission surcharge for all retail customers who choose alternate generation suppliers. A separate 0.14 cent/kWh nuclear decommissioning surcharge will continue to be collected from all customers.

An annual true-up mechanism on the surcharge to assure no over-collection or under-collection of transition costs.

Recovery of an additional estimated $200 million of restructuring implementation costs through the annual true-up mechanism.

A four-year phase-in of open access capacity with 300 MW (5% of the utility’s load) of competition beginning later this year, and an additional 150 MW/year in increments through 2001.

An endorsement by the PSC of securitization legislation.

CMS said it would have further comment on the plan after studying its details.

Joe Fisher, Houston

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