In re Mich. Consol. Gas Company's Compliance With 2008 PA 286 & 295, Docket No. 292683.

• Decision Date: 13 September 2011
• Docket Number: Docket No. 292683.
• Citation: 818 N.W.2d 354,294 Mich.App. 119
• Parties: In re MICHIGAN CONSOLIDATED GAS COMPANY'S Compliance with 2008 PA 286 AND 295.
• Court: Court of Appeal of Michigan — District of US

294 Mich.App. 119

818 N.W.2d 354

In re MICHIGAN CONSOLIDATED GAS COMPANY'S Compliance with 2008 PA 286 AND 295.

Docket No. 292683.

Court of Appeals of Michigan.

Submitted May 11, 2011, at Lansing.

Decided Sept. 13, 2011, at 9:05 a.m.

Clark Hill PLC, Birmingham (by Thomas E. Maier and Robert A.W. Strong) for the Association of Businesses Advocating Tariff Equity.

Bill Schuette, Attorney General, John J. Bursch, Solicitor General, and Steven D. Hughey and Patricia S. Barone, Assistant Attorneys General, for the Public Service Commission.

Before: MARKEY, P.J., and FITZGERALD and SHAPIRO, JJ.

MARKEY, P.J.

Appellant Association of Businesses Advocating Tariff Equity (ABATE) ¹ appeals by right a June 2, 2009, order of the Michigan Public Service Commission (PSC), approving the energy optimization plan submitted by Michigan Consolidated Gas Company (MichCon) pursuant to Michigan's Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq. (the Act).² We affirm.

I. BACKGROUND

The Act became effective on October 6, 2008. MCL 460.1191 provides that the PSC was to issue a temporary order implementing the Act within 60 days of its passage. As discussed more fully in this Court's related case, In re Review of Consumers Energy Co. Renewable Energy Plan, 293 Mich.App. 254, 820 N.W.2d 170 (2011), subpart A requires regulated electric utilities to adopt “renewable energy plan[s]” in which the electric companies are required to demonstrate how they would achieve compliance with the Act's requirements for obtaining electric capacity and energy production from “renewable energy resource[s]” as defined in part 1 of [294 Mich.App. 122]the Act. See MCL 460.1011 and MCL 460.1021 through MCL 460.1053. Subpart B of the Act requires, among other things, that regulated electric and natural gas providers adopt “energy optimization plan[s].” See MCL 460.1071 through MCL 460.1097. Broadly speaking, an energy optimization plan is designed to reduce the demand for energy and provide for load management, and thus reduce the future costs of providing service to customers. Specifically, these plans are meant “to delay the need for constructing new electric generating facilities and thereby protect consumers from incurring the costs of such construction.” MCL 460.1071(2). See also MCL 460.1001(2) (stating Act's purpose). Combination utilities are to adopt both electric and natural gas energy optimization plans. The Act provides companies with the option of enacting their own energy optimization plans with PSC approval, see MCL 460.1071 through MCL 460.1089, or of turning to an “independent energy optimization program administrator,” a nonprofit organization selected by the PSC through a competitive bid process, MCL 460.1091. Certain electric customers may also opt to enact a self-directed energy optimization plan. MCL 460.1093. Also, gas or electric companies are permitted to recover certain costs for the energy optimization plans from their customers, see MCL 460.1089 and MCL 460.1091(3), while electrical customers who have a self-directed plan would be exempt from some of the utilities' plan costs, MCL 460.1093(1), as we will discuss further.

The PSC conducted meetings and discussions on a proposed order and released its temporary order on December 4, 2008, followed by amendatory orders on December 23, 2008, and January 13, 2009. In re Temporary Order to Implement 2008 PA 295 (PSC Case No. U–15800).³ At the same time, to comply with the strict time limits placed on the PSC to complete the initial phases of the implementation process by MCL 460.1021 and MCL 460.1073, the PSC opened dockets for all rate-regulated natural gas distribution companies, including MichCon. MichCon then filed a notice of intent to file an application to seek review approval of its energy optimization plan for 2009, 2010, and 2011. On March 4, 2009, MichCon filed its application with supporting testimony and exhibits for approval of its energy optimization plan. Among other surcharges it sought to impose on its customers for implementation of the plan was a surcharge of $0.0009/Ccf ⁴ on MichCon's “End Use Transportation” customers,⁵ some of which are ABATE members. A hearing was held on the proposed plan on April 20, 2009, and briefs were subsequently submitted on May 5, 2009. With respect to the surcharge at issue here, ABATE, which had moved to intervene and was granted permission to do so,⁶ continued its arguments, first raised in In re Rules Governing Renewable Energy Plans (PSC Case No. U–15800), that natural gas transportation customers cannot be subject to energy optimization plan surcharges of their transportation providers. It also challenged MichCon's proposed gas surcharge for these customers. ABATE also argued, again consistently with its argument in U–15800, that electric customers who file self-directed electric energy optimization plans with their electric providers should be exempt under MCL 460.1093(1) not only for their electric providers' energy optimization plan surcharges, but from their gas providers' energy optimization plan surcharges as well. However, consistently with its holding in the initial case, the PSC again rejected these arguments and approved MichCon's energy optimization plan, including the surcharges on the gas transportation customers.

II. GAS TRANSPORTATION CUSTOMERS' INCLUSION IN MICHCON'S ENERGY OPTIMIZATION PLANS

ABATE argues that the PSC erroneously interpreted the language of MCL 460.1089(2) to rule that gas transportation only customers were “natural gas customers” subject to a $0.0009/Ccf surcharge to fund MichCon's energy optimization plan.

As explained in In re Application of Detroit Edison Co., 276 Mich.App. 216, 224–225, 740 N.W.2d 685 (2007):

The standard of review for PSC orders is narrow and well-defined. Pursuant to MCL 462.25, all rates, fares, charges, classification and joint rates, regulations, practices, and services prescribed by the PSC are presumed, prima facie, to be lawful and reasonable. Michigan Consolidated Gas Co. v. Pub. Service Comm., 389 Mich. 624, 635–636, 209 N.W.2d 210 (1973). A party aggrieved by an order of the PSC has the burden of proving by clear and satisfactory evidence that the order is unlawful or unreasonable. MCL 462.26(8). To establish that a PSC order is unlawful, the appellant must show that the PSC failed to follow a mandatory statute or abused its discretion in the exercise of its judgment. In re MCI Telecom. Complaint, 460 Mich. 396, 427, 596 N.W.2d 164 (1999). And, of course, an order is unreasonable if it is not supported by the evidence. Associated Truck Lines, Inc. v. Pub. Service Comm., 377 Mich. 259, 279, 140 N.W.2d 515 (1966). In sum, a final order of the PSC must be authorized by law and supported by competent, material, and substantial evidence on the whole record. Const. 1963, art. 6, § 28; Attorney General v. Pub. Service Comm., 165 Mich.App. 230, 235, 418 N.W.2d 660 (1987).

“An agency's interpretation of a statute, while entitled to ‘respectful consideration,’ ‘is not binding on the courts, and it cannot conflict with the Legislature's intent as expressed in the language of the statute at issue.’ ” In re Application of Consumers Energy Co., 281 Mich.App. 352, 357, 761 N.W.2d 346 (2008) (quotation marks omitted), quoting In re Complaint of Rovas Against SBC Mich., 482 Mich. 90, 93, 103, 754 N.W.2d 259 (2008).

With respect to this Court's review of the PSC's factual determinations:

Judicial review of administrative agency decisions must “not invade the province of exclusive administrative fact-finding by displacing an agency's choice between two reasonably differing views.” Employment Relations Comm. v. Detroit Symphony Orchestra, 393 Mich. 116, 124 (1974); see also In re Payne, 444 Mich. 679, 692–693 (1994) (“When reviewing the decision of an administrative agency for substantial evidence, a court should accept the agency's findings of fact, if they are supported by that quantum of evidence. A court will not set aside findings merely because alternative findings also could have been supported by substantial evidence on the record.”). [In re Application of Detroit Edison Co., 483 Mich. 993, 764 N.W.2d 272 (2009).]

With regard to the question of whether natural gas transportation customers should not be subject to a $0.0009/Ccf surcharge to fund MichCon's energy optimization plan, we find ABATE's arguments unpersuasive. Gas transportation customers are “natural gas customers” under MCL 460.1089(2). In resolving this issue we find persuasive and adopt this Court's previous analysis in In re Temporary Order to Implement 2008 PA 295, unpublished opinion per curiam of the Court of Appeals, issued October 14, 2010 (Docket No. 290640), pp. 4–7, 2010 WL 4026100:

When interpreting statutory language, this Court's primary goal is to give effect to the intent of the Legislature. “The first step is to review the language of the statute. If the statutory language is unambiguous, the Legislature is presumed to have intended the meaning expressed in the statute.” Briggs Tax Serv., LLC v. Detroit Pub. Schools, 485 Mich. 69, 76, 780 N.W.2d 753 (2010).... This Court accords to every word or phrase of a statute its plain and ordinary meaning, unless a term has a special, technical meaning, or is defined in the statute. Sun Valley Foods Co. v. Ward, 460 Mich. 230, 237, 596 N.W.2d 119 (1999); Stocker v. Tri–Mount/Bay Harbor Bldg. Co., Inc., 268 Mich.App. 194, 199, 706 N.W.2d 878 (2005). See also MCL 8.3a; Bay Co. Prosecutor v. Nugent, 276 Mich.App. 183, 189–190, 740 N.W.2d 678 (2007). Furthermore, statutory language is to be read in context, and “statutory provisions are not to be read in isolation; rather, context matters, and thus statutory provisions are to be read as a whole.” Robinson v. City of Lansing, 486 Mich. 1, 15, 782 N.W.2d 171 (2010)....

Under MCL 460.1089(1), a provider whose rates are regulated by the PSC is entitled to recover “the...