In response to a recent court ruling, the Michigan PublicService Commission (PSC) issued a decision this week affirming itsauthority to carry out its 1998 electricity restructuring orders ona voluntary basis with participating utilities.

The Michigan regulators’ decision followed a court challenge byConsumers Energy and Detroit Edison, the state’s biggest electricutilities, to the PSC’s statutory authority to mandate utilityparticipation in an experimental retail-choice program. In June,the Michigan Supreme Court ruled that the decision of whether toparticipate rested with the individual utility’s management, notthe state PSC.

Nonetheless, Consumers Energy and Detroit Edison, which togetherserve about 90% of Michigan’s electric market (or 3.6 millioncustomers), have signaled their intent to voluntarily comply withthe PSC’s orders to open up the retail power market to competition.The commission has given them until Sept. 1 to officially notify itof their plans to voluntarily participate. If neither utilityshould decide to implement customer choice, then the decision ofwhether to require them to do so would be up to the MichiganLegislature.

Under the PSC’s orders, retail customers would be allowed tobegin choosing alternative electric suppliers by Sept. 20th of thisyear. The program would be phased in over the next 2 « years, withfull participation expected by Jan. 1, 2002.

Michigan Gov. John Engler said Tuesday that he continued to”support the implementation of the MPSC’s orders to [begin] thecreation of a competitive market,” and that “the next step [was] tocodify those orders into law.” With the “cooperative efforts” ofutilities, customers and regulators, he indicated he would supportlegislation that was based on the PSC’s orders. “I believe thelegislature should look at what has been done by the Public ServiceCommission to create a fair plan and turn the commission’s ordersinto law.”

Detroit Edison Chairman and CEO Anthony F. Earley Jr. echoed thegovernor’s call for codification of the PSC’s orders by the statelegislature, even as the Lansing, MI-utility moves forward tovoluntarily implement those orders.

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