Consumer - Utilities
Your Rights
Energy Assistance Program
New Utilities Deregulation
Electric Industry in Michigan
Natural Gas Industry in Michigan
Be a smart customer in the deregulated market
The Michigan Public Service Commission (MPSC) is the government agency that regulates investor-owned natural gas and electric utilities and rural electric cooperatives in Michigan. Its website contains a wide variety of documents and information resources that describe Michigan’s regulated electric and natural gas services, including a documents library, consumer alerts and brochures, energy pricing and service offerings of various utility companies, forecasts of energy supply and demand and other information of interest to Michigan consumers.
One of the most important documents on the MPSC’s website is its Consumer Standards and Billing Practices rules located in the “Administrative Rules and Guidelines” section of the “Documents Library”. These are rules that all regulated natural gas and electric utility companies must follow to ensure fair and equitable treatment of utility customers. (These rules do not apply to city-owned and/or operated utility systems because they are not regulated by the MPSC.) Some of the key provisions in the consumer billing practices rules are requirements that regulated natural gas and electric utilities:
- give customers seventeen days (in most cases) to pay their utility bill
- have procedures to promptly and courteously handle customer questions, requests for services or problems
- provide customers an opportunity for a hearing according to certain procedures when other attempts to resolve a problem have failed
- offer a chance to pay the utility bill in smaller payments if the customer has a financial emergency
- offer a bill payment plan to senior citizens and low-income customers to avoid utility service shutoffs in the winter
- provide notice that a customer owes a past due bill
- request a deposit from the customer only under circumstances described in the rules
- continue utility service for a period of time if the customer would otherwise face a shutoff if proof is provided that a medical emergency exists in the home
- provide the customer with information about programs that help pay for utility bills
- discontinue service only for reasons specified in the rules and
- provide customers with a booklet that describes the consumer billing practices rules and their rights as customers.
If a person has a problem or question about her or his utility service, the first step that should be taken is to contact the utility company about it. The phone number and address to use appears on the customer’s utility bill. The company must look into the problem and make an effort to resolve it. If the customer is not satisfied with the utility’s response, she or he should contact the MPSC staff for assistance.
The MPSC address and phone number is:
Michigan Public Service Commission
P.O. Box 30221
Lansing, MI 48909
1.800.292.9555
If the problem involves the amount of the utility bill, a customer does not have to pay the amount that is in dispute until the end of the informal dispute procedure. If the utility company does not solve the problem to the customer’s satisfaction, the customer may request an informal hearing.
To request an informal hearing, the customer should contact the utility company and request that the dispute be resolved by a utility hearing officer as soon as possible. (Note: Matters that are under the authority of the courts such as claims for damages, rates and right-of-way disputes are not handled through informal hearings.) The utility will then contact the customer and provide notice of her or his right to a hearing.
The customer must then request a hearing within three days after the utility provides notice. A hearing is then scheduled and the customer is notified of its time, date and location. The customer may represent herself or himself, hire a lawyer or bring anyone the customer would like to have help. If the complaint involves a disagreement over a bill or part of a bill, the customer must pay the part of about which there is no dispute. This is a condition of having an informal hearing. If the customer and the company do not agree on how much of the bill is in dispute, the customer must pay the amount in dispute up to $100 per month. This amount is due within three days after the customer requests an informal hearing. If the customer fails to make this payment, utility service may be turned off. In the informal hearing, the utility company must prove its case. Customers must cooperate with the utility in its investigation of the problem. The customer should have documents or other evidence to support her or his position. If the customer disagrees with the decision made by the person conducting the informal hearing decision, an appeal may be requested.
To request an appeal from the informal hearing, the MPSC should be contacted within five days after the informal hearing decision. A complaint officer who works for the MPSC will review the informal hearing officer’s decision and will change, uphold or reverse the decision. During this appeal process, the utility may not take collection action or shutoff service for the disputed part of the bill until the end of the appeal process. However, failure to pay current bills may result in the customer’s utility service being shutoff. Once the MPSC complaint officer issues a decision, the informal dispute process is complete. If the customer is not satisfied with the decision, a formal hearing may be requested.
To request a formal complaint, a utility customer should contact the MPSC Executive Secretary Division. Information explaining this process is then mailed to the customer. The customer then presents the case to the MPSC in a courtroom type of hearing before an administrative law judge in Lansing, Michigan. The customer may represent herself or himself, hire a lawyer or bring anyone the customer thinks might help. Again, it is important that the customer make any payments due to the utility company. If the customer does not do that, utility services could be shut-off while she or he is waiting for the formal hearing. It may take several months for the formal complaint to be resolved. At this stage of the appeal process, the burden of proving the case is the customer’s responsibility. The utility company does not have to prove its side of the case.
If the customer is not satisfied with MPSC’s decision on the case, it may be appealed to court.
[Back to Top]There are a variety of programs in Michigan that offer utility customers help with paying energy bills and avoiding service shut-offs. These programs change from year to year depending on the availability of private and government funding for their support. Some of these programs include:
· Equal Monthly Billing Plans. These programs allow customers to elect to have their energy costs billed in equal monthly increments subject to an annual reconciliation to true up the amount paid for energy with the actual cost of the energy consumed by the customer. Some customers find this program helpful in managing their energy costs because it avoids large utility bills in the months in which the most energy is consumed.
· The MPSC Winter Protection Plan. This is a set of MPSC rules that protects seniors and low-income customers of regulated utility companies and alternative energy suppliers from service shut-off and high utility payments between November 1 and March 31. Persons age 65 or older participating in Winter Protection are not required to make specific monthly payments in the protection period, but are encouraged to do so to avoid higher bills when that period ends. During the protection period, low-income customers who receive Michigan Department of Human Services cash assistance or Food Stamps or Medicaid or have a household income at or below 200% of the poverty level, must make monthly payments of at least 6% of their estimated annual bill to avoid shut-off. At the end of the protection period, both senior citizens and low-income customers participating in the plan must pay off any money owed in installments between April and November. To apply for this program a customer should contact her or his natural gas or electric utility company or alternative energy supplier.
· Home Heating Credit. Utility customers with a low income or who are receiving public assistance or unemployment compensation may receive a tax credit to help pay winter heating bills. Eligible customers must meet guidelines based on household income, exemptions and heating costs. Home Heating Credit Forms (MI-1040CR-7) must be filed by September 30 for the preceding tax year. In 2004, (the most recent information) the average home heating credit in Michigan was $175. The maximum amount of the credit is $1,200.
· State Emergency Relief Program. This program may help low-income households pay part of their heating or electric bills and may help keep their utilities in service or have service restored. Contact your local Michigan Department of Human Services office for information and current eligibility criteria. This program is available year-round.
· Private Energy Assistance Programs. There are private organizations that may, at times, provide emergency energy bill payment assistance. The Heat and Warmth Fund (T.H.A.W.) provides bill payment assistance to low-income residents in 65 Michigan counties. THAW’s toll-free referral number is 1.800.866.8429. The Salvation Army may also be able to provide emergency assistance. The MPSC also provides information on finding winter shut-off aid programs.
· Programs to Reduce Energy Use. Local Community Action Agencies may offer programs to provide help with caulking and insulation if specific low-income guidelines are met. The MPSC’s website also contains brochures and Consumer Alerts that contain good information on strategies for reducing home energy use.
The New Utilities Market: Energy Deregulation
The Past
Both the electric and gas utility industries are in some stage of being "deregulated" in Michigan. This is a dramatic change from the way these companies operated before. In the past, investor-owned electric and gas utilities were regulated by the Michigan Public Service Commission. This regulation was established to protect consumers from the monopoly power of the electric or gas utilities that were the exclusive suppliers of energy in various geographical service territories. Before regulation, these monopolies could set their own rates and establish their own conditions of service. Customers who needed electricity and natural gas had no recourse. When regulation was instituted, electric and gas utility companies that sought to increase their rates or change the terms under which they provide service were required to obtain approval from the Public Service Commission to do so, usually after public notice and a public hearing on the merits of their requests.
Current Status
In the late 1990’s, the utility industry and some legislators began to push the idea that if the regulation of the industry was changed so that customers could purchase their gas and electric requirements from suppliers other than the local utility company, this would spur competition and result in lower rates and better service. This strategy is often referred to as "customer choice" or "open access." By the year 2000, approximately two-thirds of the states had either passed legislation or their regulatory agency had issued orders mandating that customer choice programs be tested or initiated.
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The Electric Industry in Michigan
In the year 2000, the Michigan legislature passed Public Acts 141 and 142. They provide the legal framework that was intended to foster electric competition in this state. As of August 2006 there are alternative energy suppliers that offer service to industrial and commercial electric customers of the Detroit Edison Company, Consumers Energy Company and Upper Peninsula Power Company. There are no alternative energy suppliers that offer service to residential customers.
If and when “customer choice” for electric power supply becomes available for residential utility customers, it will be imperative that consumers become educated about the various cost and service options offered. The same types of issues and questions described in the next section on customer choice for natural gas will be germane.
Natural Gas Industry in Michigan
The Michigan Public Service Commission has established a Natural Gas Customer Choice program under which customers are given the option of continuing as a full-service customer with their utility company or shopping for natural gas and purchasing it from an Alternative Gas Supplier (AGS) at unregulated prices. Gas purchased from an AGS is delivered by the customer’s gas utility company. As of August 2006, AGSs are operating in the service territories of Consumers Energy Company, Michigan Consolidated Gas Company and SEMCO Energy Gas Company. There are no AGSs operating in the service territory of Michigan Gas Utilities Company or any of the smaller gas utilities in Michigan.
The key to making the right choice about whether to participate in the natural gas Customer Choice program is to understand the rates, terms, and conditions that are being offered by the AGS compared to the service that is delivered by the local natural gas utility company. This is how the natural gas Customer Choice program works:
· No customer is required to switch to an AGS.
· If you stay as a customer of your current gas utility company, the price you pay for the natural gas that is delivered to your home will continue to be regulated by the Michigan Public Service Commission.
· If you choose to purchase your natural gas from an AGS, the price you pay for the natural gas from the AGS is not regulated by the MPSC. Instead, that is governed by the contract you enter with the AGS.
· Regardless of whether you stay with your current gas utility company or sign up with an AGS for your natural gas supply, your current natural gas utility will continue to deliver the gas, read your meter, bill you and handle gas line emergencies, just as they do now. Your natural gas utility will also continue to charge you for these services as they do now under rates regulated by the MPSC. When you get your utility bill, you pay your utility company and the utility, in turn, pays the AGS.
Some of the questions you need to ask and get answered before deciding whether to continue purchasing your gas from your local utility or sign up with an AGS are:
· What rate will you be charged by the AGS? Is it a fixed rate or a variable rate? If it varies, how much and how will you be notified of rate changes? How long will you be guaranteed this price?
· Is there a cancellation penalty after the initial 30-day cancellation period? If so, how much? Is the penalty a set amount or is it a charge for every month left in the contract?
· How do you cancel the contract? By telephone or in writing? How long will it take to get the contract canceled?
· What happens at the end of the contract? Is it automatically renewed unless you take steps to cancel it? If it is automatically renewed, how will you be contacted about price changes?
· What is the billing dispute process with the AGS?
· How do you contact the AGS with billing questions? Is there regular staff available during regular business hours to take your call?
· What are the prices, terms and conditions of other AGSs and those of your local utility? You can check current rates for natural gas from your local gas utility on the MPSC website at www.michigan.gov/mpsc and clicking on “Natural Gas”, then “Utility Rates” and checking the “GCR Factor”. Information about how to contact the AGSs that serve customers in your area is available at the same website and clicking “Natural Gas”, then “Customer Choice”, then “Supplier List”.
How to Be a Smart Energy Customer in the Deregulated Market
- In the deregulated market, both gas rates have several different components such as transportation, distribution, and service charges. Make sure you ask about these additional charges to get a complete picture of what the final cost will be.
· Before signing up with an AGS make sure you read the contract and fully understand it before signing it.
Additional information about natural gas Customer Choice is available on the MPSC’s website.
