Energy assistance fund on the ropes in Michigan

Environmental groups in Michigan are asking the state’s Public Service Commission to challenge a court ruling that threatens to block funding for a home heating and energy efficiency assistance program.

As the Detroit Free Press reported last week, the state Court of Appeals ruled that the PSC, which regulates utilities, doesn’t have the authority to collect money from ratepayers in order to help other customers who have fallen behind on their bills. The decision blocks the disbursement of some $80 million in funds from the program, the Low Income and Energy Efficiency Fund.

The court’s written opinion states:

The PSC’s authority under MCL 460.6a(2) to establish procedures for considering and deciding petitions from regulated utilities, and to allow a utility to recover its reasonably and prudently incurred costs, does not include the authority to approve of a utility’s collecting funds from its ratepayers in general to fund a program designed to offer some protection against interruptions in services, or other such relief to distressed ratepayers. Such activity has less to do with regulating a utility than with helping the poor. Similarly, a program to promote energy efficiency in general has more to do with environmentalism and conservation than with assessing a utility’s reasonable and prudently incurred costs.

It’s the latter part that’s the focus of the environmental groups’ objection.

David Wright of the Ecology Center (a member of the RE-AMP network, which also funds Midwest Energy News) writes in a letter to the PSC that helping low-income homeowners weatherize their property is a legitimate business function for utilities which should be overseen by the PSC.

While there is a cost associated with energy efficiency, the cost is significantly lower than the cost required to operate existing utility facilities, let alone to build a new assets to meet demand. Investing in energy efficiency, has been shown, and is widely known to reduce costs to all ratepayers. Conservation, while used disparagingly in this opinion, is a widely practiced and carefully evaluated method most effectively employed by utilities to reduce costs for all ratepayers.

In a commentary published in the Free Press, MPSC director Orjiakor Isiogu said the agency is “studying all possible legislative and appellate options and is awaiting comments from interested people.”

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