The Michigan Public Service Commission (PSC) has denied requests to modify its newly instituted retail wheeling experiment (see 161 PUR4th 441). However, the PSC did clarify its ruling to permit a form of "self-service" wheeling by the Dow Chemical Co. (em a limited partner, along with Consumers Power Co., in the Midland Cogeneration Venture (MCV). Dow had asked the PSC for an exemption from restrictions on participation by utility affiliates as third-party providers in their own service territory. Dow said it would use self-service wheeling to move 30 megawatts of its entitlement of MCV power to other Dow production facilities in Consumers' service territory.
The PSC rejected attempts by Consumers to increase transmission rates under the program by allocating a greater percentage of administrative and general expenses than are currently assigned under a bundled rate design. Consumers had claimed that more overhead costs should be allocated to wheeling rates to prevent other customers from subsidizing wheeling services. The PSC found unconvincing the utility's explanation that the existing allocation method (direct labor ratios) was only accurate under a bundled rate scheme because "customers end up paying the costs for all functions."
The PSC also rejected efforts by large customers to expand "deadband protection" requirements from a 3-to a 6-percent overrun to allow customers to use more power than delivered by its third-party provider, without penalty. The PSC concluded that customers require incentives to secure their own generation services and disincentives to use services supplied by the local utilities. Re Association of Businesses Advocating Tariff Equity, Case Nos. U-10143;