HVAC Breaking News

Feb. 26, 2003: Michigan Orders Utility To Halt Cross-Subsidization

February 26, 2003
/ Print / Reprints /
/ Text Size+
LANSING, Mich. — The Michigan Public Service Commission has cited Consumers Energy Company for violations of the Commission's code of conduct for the utility’s appliance service plan (ASP) program and has ordered Consumers to cease and desist from further violations of the code, which was established by the Commission's Dec. 4, 2000 order in Case No. U-12134. The Commission also granted, in part, Consumers' request for an extension of the temporary waiver of the code, subject to conditions.

The purpose of the code of conduct is to prevent electric utilities and alternative electric suppliers from engaging in cross-subsidization, information sharing, and preferential treatment between their regulated and unregulated services.

Consumers' ASP program provides repair service for residential heating and cooling equipment as well as major kitchen and laundry appliances. Based on the state’s Customer Choice and Electricity Reliability Act, the Commission found that Consumers' heating and air conditioning services could only be performed through a full functional separation, preferably through a separate affiliate. The Commission did grant Consumers a temporary waiver of the separation requirement of the code for these services through April 3, 2003. Consumers sought an extension of that temporary waiver until April 3, 2004.

The Commission has now extended the temporary waiver until December 31, 2003, at which time Consumers must either terminate its ASP program or complete the full functional separation of its regulated activities from the appliance service program. The extension of the temporary waiver was conditioned on the discontinuation of messages promoting the ASP program in customers' bills and a requirement that Consumers' ASP program bear the full cost of advertising and promotional activities through the use of separate mailings by December 31, 2003. Until that date, Consumers may continue to bill customers for the costs associated with the ASP program on its utility bills, but may do so only if the ASP program is charged for such billing services on a fully allocated (not incremental) cost basis.

The Commission also issued an order (Case No. U-13089) that cited Consumers for jointly advertising unregulated programs with regulated programs, a provision of the code of conduct that was not stayed. The Commission also ordered an immediate cessation of promoting the ASP program via inserts and bills provided through ratepayer funds.

In this case, Phillip D. Forner, an HVAC contractor, filed a complaint against Consumers for placing promotional information about its unregulated business activities into its billing envelopes or by printing such information on its customers' bills. Therefore, the Commission issued a cease and desist order from further violations of the code of conduct.

Publication date: 02/24/2003

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

Recent Articles by Greg Mazurkiewicz

You must login or register in order to post a comment.



Image Galleries

2014 World Energy Engineering Congress

Scenes from the 2014 World Energy Engineering Congress in Washington, D.C.


NEWSMakers: Matt Barga

Matt Barga, portfolio manager — a/c and coils, Ingersoll Rand, discusses how the company is working to comply with the new energy conservation standards for heat pumps and air conditioners that go into effect on Jan. 1, 2015. Posted on Dec. 19.

More Podcasts


NEWS 12-15-14 cover

2014 December 15

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe


In order to bring more people into the trade and produce more technicians, what should the industry do?
View Results Poll Archive


2015 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research


Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


Magazine image
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.


facebook icontwitter iconyoutube iconLinkedIn i con