The Michigan Public Service Commission (PSC) has reaffirmed its earlier approval of special manufacturing contracts submitted by Detroit Edison Co. to supply power to Chrysler Corp., Ford Motor Co., and General Motors Corp. Opponents had argued that the PSC erred by approving the price discounts while deferring consideration of their rate treatment as well as their effect on existing competitive programs. The contracts include $2 billion in 10-year sole-supplier contracts with the entire automobile industry located in the utility's service territory.
The PSC said it had already ruled that Detroit Edison would not be permitted to reallocate the costs of serving the contract customers to other ratepayer classes without a compelling showing to justify different ratemaking treatment. It also rejected the claims of independent power producers that approval of the discounts required the PSC to resolve issues such as whether the discounts might frustrate competitive policies by avoiding the need for new capacity and delaying its capacity solicitation and experimental retail wheeling programs. Re Detroit Edison Co., Case No. U-10646, June 30, 1995 (Mich.P.S.C.).
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