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MPSC Licensing Issues. Energy Regulatory Partnership Program Abuja, Nigeria July 14-18, 2008 Presented by Robert W. Kehres. Discussion Points. Transmission Lines Alternative Electric Suppliers Certificates of Public Convenience and Necessity
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MPSC Licensing Issues Energy Regulatory Partnership Program Abuja, Nigeria July 14-18, 2008 Presented by Robert W. Kehres
Discussion Points • Transmission Lines • Alternative Electric Suppliers • Certificates of Public Convenience and Necessity • Rule 411 -- Service Area Disputes between existing Electric Utilities
Act 30 of 1995 • After a disputed effort by Consumers Energy Company to construct a major transmission line, the Legislature granted the Commission authority to approve the siting of major and non-major transmission lines • The MPSC has had only two such applications – one was granted and one was rejectede
Requirements of the Act • Transmission line case cannot be filed until the company has held public hearings in each municipality • Adequate notice must be given to affected areas. • Application must identify a route and at least one alternative route • Application must be cost beneficial
Alternative Electric Suppliers • Commission’s initial effort to open the market to AESs was struck down by the courts • Act 141 granted the Commission authority to open energy markets to AESs • Markets had to be opened by January 1, 2002 • Utilities had to be provided full recovery of stranded costs
AES Requirements • Commission established licensing procedure by order • AESs must maintain an office in Michigan • MPSC had to examine the AES’s managerial, financial, and technical capabilities. • AESs must maintain adequate records and agree to collect taxes
Certificates of Public Convenience and Necessity • Act 69 of 1929 • No public utility shall begin construction of any utility plant or render service for the purpose of carrying on a local business in any place where another utility is conducting a similar business without obtaining from the Commission a certificate of public convenience and necessity
CPCN Requirements • Franchise from the municipality • Notice to municipalities and other utilities • Public hearing to consider • Adequacy of existing service • Investment by the utility • Benefits to be achieved • Effect on rates • Other factors
Rule 411 • An administrative rule to govern which of two or more utilities serving one area should be permitted to serve a customer in the area • This is not an AES situation • This is all about having only one company’s distribution facilities in one area
Rule 411 • Customer preference is not necessarily a controlling factor • Weight is given to the provision of service by a utility to the location in the past • Weight is also given to the distance that facilities must be extended • Goal is to eliminate redundant facilities, which only add to all customers’ costs • Also, safety is always a concern