Having issued a comprehensive decision on electric utility restructuring on June 5, the Michigan Public Service Commission nevertheless must yet decide what to do about electric utilities that offer contracts to individual customers with off-the-tariff rate discounts. It must consider whether those discounts may stall efforts to promote unbundled direct-access service, whereby the regulated electric utility provides only transmission and distribution service to deliver energy produced by a competitive supplier.
Meanwhile certain competing energy suppliers have complained to the commission that Consumers Power Co. has been able to "lock up" capacity through rate discounts to "at-risk" customers before direct access service could become available.
Thus, the commission has agreed to review certain rate-discount contracts filed last December by Consumers Power Co. to determine whether to count those sales against a block of load to be kept open to competition as the pilot begins. The commission had originally held that the direct-access pilot would expose a total of 240 MW of Consumers' existing load to competition. Of those 240 MW, the utility could compete with third-party suppliers for 140 MW.
In effect, the PSC will decide whether the discounted rate contracts should "compete" against reservations of load for direct-access service.