The Michigan Public Service Commission (PSC) has approved a price-cap electric regulation plan for Edison Sault Electric Co. Edison will cap base rates at existing levels, roll its existing power-supply cost-recovery (PSCR) factor into base rates, and suspend the PSCR clause prospectively. The utility will then be authorized to change initial rates upon 30 days' written notice to the PSC, as long as the altered rates for each class do not exceed initial rates. Edison said it would not discriminate among members of a class when reducing tariffed charges, and that rate increases would only be permitted under extraordinary circumstances when the increase could be proven necessary. The PSC expects the plan to reduce regulatory costs, provide greater incentives for efficient operation, and enhance the utility's ability to respond to market demands and the needs of its customers. The PSC required Edison to report on its experience by October 1, 2000, and to recommend revisions to the mechanism. Re Edison Sault Electric Co., Case No. U-10923, Sept. 21, 1995 (Mich.P.S.C.).
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