One Court of Justice

The Supreme Court granted the application of an interest group challenging the Court of Appeals’ affirmance permitting Detroit Edison to issue a prospective rebate to its customers to refund a prior unapproved rate increase.  Our July 2012 post on the Court of Appeals’ decision affirming the prospective rebate, and the dissent arguing that it was not permitted because it was contrary to the plain language of the statute at issue, can be found here.

Detroit Edison had implemented a rate hike to customers prior to receipt of Michigan Public Service Commission approval.  When only part of the rate increase was approved, Detroit Edison wanted to refund the overcharge by crediting a future bill.  The Association of Businesses Advocating Tariff Equity (ABATE) argued that such a refund was impermissible under the applicable statute and failed to compensate past customers who paid the unapproved additional charges.

In 2009 and 2010, Detroit Edison Co. self-implemented a rate increase while waiting for the Michigan Public Service Commission (“MPSC”) to act on its rate-increase request.  On January 11, 2010, the MPSC approved only a portion of Detroit Edison’s requested increase.  Detroit Edison proposed to refund its customers’ overpayments among customer classes based upon each customer class’s pro rata share of the total overpayment, by providing a discount on the January, 2010 billing cycle.  The Association of Business Advocating Tariff Equity (“ABATE”) objected because former primary customers of Detroit Edison, who paid the improperly high rates, would not receive a refund.  Despite the objection, the MPSC approved Detroit Edison’s plan, and the Michigan Court of Appeals affirmed.  In re Appl of Detroit Edison Co. to Increase Rates, No. 302110.  Read more »

In In re Michigan Consolidated Gas Company Compliance to 2008 PA 286/295, No. 292683 the Court of Appeals considered three issues on appeal and ultimately affirmed the June 2, 2009, order of the Michigan Public Service Commission (“PSC”), approving the energy optimization plan submitted by Michigan Consolidated Gas Company (“MichCon”). On appeal, the appellant Association of Business Advocating Tariff Equity (“ABATE”) challenged the PSC’s interpretation of Michigan’s Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq. (“the Act”). The Court of Appeals noted that under the applicable standard of review, PSC orders are presumed to be lawful and reasonable, and the evidentiary burden is on the party challenging the order to prove “by clear and satisfactory evidence that the order is unlawful or unreasonable.” Additionally, agency interpretations of statutes are entitled to “respectful consideration,” although they are not binding on the courts and may not conflict with the legislative intent behind the statute.

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In In re Application of Michigan Consolidated Gas Company, Nos. 298830, 298887, the Michigan Public Service Commission (“PSC”) had decided to allow the Michigan Consolidated Gas Company (“Mich Con”) to use an uncollectable expense true-up mechanism (“UETM”) and to charge ratepayers over $5 million to support the Low-Income and Energy Efficiency Fund (“LIEEF”).  The Court of Appeals affirmed the use of the UETM, but held that the PSC did not have authority to approve the collection of funds for the LIEEF.

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On July 12, 2011, in In the Matter of In Review of Consumers Energy Company Renewable Energy Plan, No. 292659, the Michigan Court of Appeals affirmed the Public Service Commission’s (“PSC”) decision to approve Consumers Energy’s energy optimization and renewable energy plans for its electric division and its energy optimization plan for its gas division, pursuant to Michigan’s Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq. (the “Act”).  The opinion also reports that the Court has resolved a similar challenge to Michigan Consolidated Gas Company’s energy optimization plan in a separate appeal, but the decision has yet to be released. Read more »