The Michigan Public Service Commission (MPSC) released a list of actions that the Michigan legislature could take to tackle energy affordability. The recommendations came in response to a June letter from Governor Gretchen Whitmer asking the MPSC to identify ways to lower utility bills for residents, through both legislative reforms and options for new and improved energy assistance programs.
In response, the MPSC detailed a set of recommendations, chief among them ending the pattern of annual rate cases, realigning utility incentives to focus more on core reliability and affordability objectives, removing costs that add to customer bills without adding value, and increasing competitive bidding and other opportunities to drive down costs within the current regulatory system.
Among the recommendations is addressing the utility regulatory and rate recovery model used in Michigan and other states, which, according to the commission, encourages utilities to favor capital expenditures over less costly approaches.
Specifics within the recommendations include:
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- Move to multi-year rate cases.
- Tie utility earnings to cost efficiency and improved performance outcomes for customers.
- Compel utilities to make the most of current grid infrastructure that’s already been paid for by customers before investing in expensive upgrades and expansions.
- Codify the protections the MPSC has adopted to ensure data centers cover 100% of the costs they impose on the system.
- Align eligibility for low-income rates and credits with eligibility for MEAP assistance.
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