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Electric Discount Satisfies Mich. PSC

Fortnightly Magazine - December 1996

The Michigan Public Service Commission (PSC) has approved a request by Detroit Edison Co., to offer a special discount contract to one of its large industrial customers, MasoTech, Inc. The customer had failed in an earlier attempt to compel the utility to offer transmission service so that it could gain "direct access" to other sources of electric power. See, Re MasoTech Forming Technologies, Inc., 168 PUR4th 142 (Mich.P.S.C.1996). The 10-year contract permits MasoTech to "tailor its electric supply portfolio" by combining firm and interruptible service options based on existing tariffs. The contract is somewhat unique, however, in that it permits MasoTech to seek other supply options after five years upon payment of a specified charge.

The PSC found that the contract benefited both the customer and the general public by retaining and possibly increasing employment in the region. It also noted that ratepayers are protected because the utility has no guarantee of recovering the cost of the discounts and is required to treat service under all special contracts as a separate rate class for purposes of cost-allocation determinations in future rate cases. Re Detroit Edison Co., Case No. U-11153, Sept. 12, 1996 (Mich.P.S.C.).

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