Opinion ID: 2125013
Heading Depth: 1
Heading Rank: 7

Heading: Michigan Public Service Commission's Position

Text: Initially, the MPSC took the position that under the act it only had to determine, regardless of whether the requested securities were to finance new construction or ongoing construction, whether the issuance was necessary for construction of a plant which was reasonably required for the purpose of the utility. Secondly, it determined whether the funds generated by an issuance were to be applied for a lawful purpose. This means that the issue and the amount were essential to the successful carrying out of this purpose. In response to the Attorney General's challenge of its regulatory behavior in security cases, the commission has modified its position somewhat. It now concedes that before approval of the initial issue of securities, a thorough and complete examination into the necessity of the construction of generating plants is appropriate. After approval of initial securities, however, MPSC believes re-examination is not necessary because of the time involved, the risk it would create for the investment community and the fact it would be duplicative. The commission also disputes the case law which the Attorney General cites in support of his statutory interpretation. In addition, it finds support for its position by arguing that since proposed amendments to the act were not enacted by the Legislature, this Court should not interpret the language reasonably required for the purpose of a utility to include the objectives of siting legislation. The MPSC also argues that in any event the determination argued for by the Attorney General has been made. It believes that it has considered the construction program of Consumers Power in 30 security cases since 1970. In approving the various security requests for purposes of constructing the plant, the MPSC argues that it found that the construction of the plant was lawful and that it was reasonably required for the purposes of the utility. The continued authorizations of funding also indicated that the commission believed that the amount of funds requested was essential for the purposes of completing the plant. Similarly, the MPSC contends that the examination requested by the Attorney General is not necessary as the construction program has also been considered in several ratemaking cases since 1970. In fact, the commission, in case no U-6360, stated that: Adequate protection against unreasonable and imprudent expenditures by the applicant is provided by the statutory provisions governing the setting of rates for that applicant. The commission does not feel that the Legislature intended to provide the same protection for the ratepayers under the rate setting statutes and securities act. Thus, the MPSC believes that the securities act vests it with authority to authorize the issuance of securities after determining that the securities are reasonably required for the ongoing construction of a generating plant where already the commission has continually authorized the issuance of securities through the various phases of construction.