Court Opinion

ID: 837053
Source: CourtListenerOpinion
Date Created: 2013-03-01 21:19:05.540842+00
Date Added: 2024-06-11T12:35:03.341612
License: Public Domain

Order                                                                      Michigan Supreme Court
                                                                                 Lansing, Michigan

  May 1, 2009                                                                            Marilyn Kelly,
                                                                                             Chief Justice

  136431                                                                           Michael F. Cavanagh
                                                                                   Elizabeth A. Weaver
                                                                                    Maura D. Corrigan
                                                                                   Robert P. Young, Jr.
  ATTORNEY GENERAL OF THE                                                          Stephen J. Markman
  STATE OF MICHIGAN,                                                               Diane M. Hathaway,
            Appellant,                                                                            Justices

  v                                                      SC: 136431
                                                         COA: 261747
                                                         MPSC: U-013917
  MICHIGAN PUBLIC SERVICE
  COMMISSION, CONSUMERS ENERGY
  COMPANY, ADRIAN ENERGY
  ASSOCIATION, L.L.C., CADILLAC
  RENEWABLE ENERGY, L.L.C.,
  GENESEE POWER STATION, L.P.,
  GRAYLING GENERATING STATION,
  L.P., HILLMAN POWER COMPANY,
  L.L.C., TES FILER CITY STATION,
  L.P., VIKING ENERGY OF LINCOLN,
  INC., VIKING ENERGY OF McBAIN,
  INC., and MIDLAND COGENERATION
  VENTURE, L.P.,
               Appellees.

  _________________________________________/

          On order of the Court, leave to appeal having been granted and the briefs and oral
  arguments of the parties having been considered by the Court, we AFFIRM the April 1,
  2008 Court of Appeals judgment that “transmission costs” may be recovered through a
  power supply cost recovery (PSCR) clause on different grounds. The Court of Appeals
  followed the binding decision of In re Detroit Edison Application, 276 Mich App 216,
  229 (2007), which held that “[p]ayments made by Edison for transmission costs . . . are
  necessarily ‘transportation costs,’ and therefore are properly recoverable in a PSCR
  clause.” See MCR 7.215(J)(1). Electric utilities can recover two types of power supply
  costs through a PSCR clause: (1) “booked costs, including transportation costs,
  reclamation costs, and disposal and reprocessing costs, of fuel burned by the utility for
  electric generation;” or (2) “booked costs of purchased and net interchanged power
  transactions.” MCL 460.6j(1)(a). The Court of Appeals interpretation does not give any
  meaning to the limitation that the “transportation costs” must be those “of fuel burned by
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the utility for electric generation.” (Emphasis added). However, the second clause,
“booked costs of purchased and net interchanged power transactions,” is a technical
phrase that has acquired a “peculiar and appropriate” meaning in the regulation of electric
utilities to include “transmission costs” charged by third-parties. MCL 8.3a; see In re
Wisconsin Electric Power Company, unpublished opinion and order of the Public Service
Commission, issued September 16, 2002 (Case No. U-12725) at 16. Accordingly, it
“shall be construed and understood according to such peculiar and appropriate meaning,”
MCL 8.3a, and the PSC did not err in permitting Consumers Energy Company to
recover transmission costs through its PSCR clause. The Court of Appeals affirmance of
the PSC decision is thus affirmed on this alternate ground.

                         I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
                   foregoing is a true and complete copy of the order entered at the direction of the Court.
                         May 1, 2009                         _________________________________________
        0428                                                                 Clerk