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HB-5710, As Passed House, May 12, 2026
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
SUBSTITUTE FOR
HOUSE BILL NO. 5710
A bill to amend 1939 PA 3, entitled
"An act to provide for the regulation and control of public and
certain private utilities and other services affected with a public
interest within this state; to provide for alternative energy
suppliers and certain providers of electric vehicle charging
services; to provide for licensing; to include municipally owned
utilities and other providers of energy under certain provisions of
this act; to create a public service commission and to prescribe
and define its powers and duties; to abolish the Michigan public
utilities commission and to confer the powers and duties vested by
law on the public service commission; to provide for the powers and
duties of certain state governmental officers and entities; to
provide for the continuance, transfer, and completion of certain
matters and proceedings; to abolish automatic adjustment clauses;
to prohibit certain rate increases without notice and hearing; to
qualify residential energy conservation programs permitted under
state law for certain federal exemption; to create a fund; to
encourage the utilization of resource recovery facilities; to
prohibit certain acts and practices of providers of energy; to
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allow for the securitization of stranded costs; to reduce rates; to
provide for appeals; to provide appropriations; to declare the
effect and purpose of this act; to prescribe remedies and
penalties; and to repeal acts and parts of acts,"
by amending sections 6a, 6l, 6m, and 6t (MCL 460.6a, 460.6l, 460.6m,
and 460.6t), sections 6a, 6m, and 6t as amended by 2023 PA 231 and
section 6l as amended by 2016 PA 341; and to repeal acts and parts
of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6a. (1) A gas utility, electric utility, or steam utility 1
shall not increase its rates and charges or alter, change, or amend 2
any rate or rate schedules, the effect of which will be to increase 3
the cost of services to its customers, without first receiving 4
commission approval as provided in this section. A utility shall 5
coordinate with the commission staff in advance of filing its 6
general rate case application under this section to avoid resource 7
challenges with applications being filed at the same time as 8
applications filed under this section by other utilities. In the 9
case of electric utilities serving more than 1,000,000 customers in 10
this state, the commission may, if necessary, order a delay in 11
filing an application to establish a 21-day spacing between filings 12
of electric utilities serving more than 1,000,000 customers in this 13
state. The utility shall place in evidence facts relied upon to 14
support the utility's petition or application to increase its rates 15
and charges, or to alter, change, or amend any rate or rate 16
schedules. The commission shall require notice to be given to all 17
interested parties within in the service area to be affected, and 18
allow interested parties a reasonable opportunity for a full and 19
complete hearing. A utility may use projected costs and revenues 20
for a future consecutive 12-month period in developing its 21
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requested rates and charges. The commission shall notify the 1
utility within not later than 30 days after filing, whether the 2
utility's petition or application is complete. A petition or 3
application is considered complete if it complies with the rate 4
application filing forms and instructions adopted under subsection 5
(8). If the application is not complete, the commission shall 6
notify the utility of all information necessary to make that filing 7
complete. If the commission has not notified the utility within 30 8
days of whether the utility's petition or application is complete, 9
the application is considered complete. Concurrently with filing a 10
complete application, or at any time after filing a complete 11
application, a gas utility serving fewer than 1,000,000 customers 12
in this state may file a motion seeking partial and immediate rate 13
relief. After providing notice to the interested parties within in 14
the service area to be affected and affording interested parties a 15
reasonable opportunity to present written evidence and written 16
arguments relevant to the motion seeking partial and immediate rate 17
relief, the commission shall make a finding and enter an order 18
granting or denying partial and immediate relief within not later 19
than 180 days after the motion seeking partial and immediate rate 20
relief was submitted. The commission has 12 months to issue a final 21
order in a case in which a gas utility has filed a motion seeking 22
partial and immediate rate relief. 23
(2) If the commission has not issued an order within 180 days 24
after the filing of a complete application, the utility may 25
implement up to the amount of the proposed annual rate request 26
through equal percentage increases or decreases applied to all base 27
rates. If the utility uses projected costs and revenues for a 28
future period in developing its requested rates and charges, the 29
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utility may not implement the equal percentage increases or 1
decreases before the calendar date corresponding to the start of 2
the projected 12-month period. For good cause, the commission may 3
issue a temporary order preventing or delaying a utility from 4
implementing its proposed rates or charges. If a utility implements 5
increased rates or charges under this subsection before the 6
commission issues a final order, that utility shall refund to 7
customers, with interest, any portion of the total revenues 8
collected through application of the equal percentage increase that 9
exceed the total that would have been produced by the rates or 10
charges subsequently ordered by the commission in its final order. 11
The commission shall allocate any refund required by this 12
subsection among primary customers based upon on their pro rata 13
share of the total revenue collected through the applicable 14
increase, and among secondary and residential customers in a manner 15
to be determined by the commission. The rate of interest for 16
refunds is 5% plus the London interbank offered rate (LIBOR) for 17
the appropriate time period. For any portion of the refund that, 18
exclusive of interest, exceeds 25% of the annual revenue increase 19
awarded by the commission in its final order, the rate of interest 20
is the authorized rate of return on the common stock of the utility 21
during the appropriate period. Any refund or interest awarded under 22
this subsection must not be included, in whole or in part, in any 23
application for a rate increase by a utility. This subsection only 24
applies to completed applications filed with the commission before 25
April 20, 2017. 26
(3) This section does not impair the commission's ability to 27
issue a show cause order as part of its rate-making authority. An 28
alteration or amendment in rates or rate schedules applied for by a 29
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public utility that will not result in an increase in the cost of 1
service to its customers may be authorized and approved without 2
notice or hearing. There shall be no increase in rates based upon 3
changes in cost of fuel, purchased gas, or purchased steam unless 4
notice has been given within in the service area to be affected, 5
and there has been an opportunity for a full and complete hearing 6
on the cost of fuel, purchased gas, or purchased steam. The rates 7
charged by any utility under an automatic fuel, purchased gas, or 8
purchased steam adjustment clause shall must not be altered, 9
changed, or amended unless notice has been given within in the 10
service area to be affected, and there has been an opportunity for 11
a full and complete hearing on the cost of the fuel, purchased gas, 12
or purchased steam. 13
(4) The commission shall adopt rules and procedures for the 14
filing, investigation, and hearing of petitions or applications to 15
increase or decrease utility rates and charges as the commission 16
finds necessary or appropriate to enable it to reach a final 17
decision with respect to petitions or applications within a period 18
of time allotted by law to issue a final order after the filing of 19
the complete petitions or applications. The commission shall not 20
authorize or approve adjustment clauses that operate without notice 21
and an opportunity for a full and complete hearing, and all such 22
clauses are abolished. The commission may hold a full and complete 23
hearing to determine the cost of fuel, purchased gas, purchased 24
steam, or purchased power separately from a full and complete 25
hearing on a general rate case and may hold that hearing 26
concurrently with the general rate case. The commission shall 27
authorize a utility to recover the cost of fuel, purchased gas, 28
purchased steam, or purchased power only to the extent that the 29
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purchases are reasonable and prudent. 1
(5) Except as otherwise provided in this subsection and 2
subsection (1), if the commission fails to reach a final decision 3
with respect to a completed petition or application to increase or 4
decrease utility rates within the 10-month period following the 5
filing of the completed petition or application, the petition or 6
application is considered approved. If a utility makes any 7
significant amendment to its filing, the commission has an 8
additional 10 months after the date of the amendment to reach a 9
final decision on the petition or application. If the utility files 10
for an extension of time, the commission shall extend the 10-month 11
period by the amount of additional time requested by the utility. 12
(6) A utility shall not file a general rate case application 13
for an increase in rates earlier than 12 months after the date of 14
the filing of a complete prior general rate case application. A 15
utility may not file a new general rate case application until the 16
commission has issued a final order on a prior general rate case or 17
until the rates are approved under subsection (5). 18
(7) The commission shall, if requested by a gas utility, 19
establish load retention transportation rate schedules or approve 20
gas transportation contracts as required for the purpose of serving 21
industrial or commercial customers whose individual annual 22
transportation volumes exceed 500,000 decatherms on the gas 23
utility's system. The commission shall approve these rate schedules 24
or approve transportation contracts entered into by the utility in 25
good faith if the industrial or commercial customer has the 26
installed capability to use an alternative fuel or otherwise has a 27
viable alternative to receiving natural gas transportation service 28
from the utility, the customer can obtain the alternative fuel or 29
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gas transportation from an alternative source at a price that would 1
cause them not to use the gas utility's system, and the customer, 2
as a result of their use of the system and receipt of 3
transportation service, makes a significant contribution to the 4
utility's fixed costs. The commission shall adopt accounting and 5
rate-making policies to ensure that the discounts associated with 6
the transportation rate schedules and contracts are recovered by 7
the gas utility through charges applicable to other customers if 8
the incremental costs related to the discounts are no greater than 9
the costs that would be passed on to those customers as the result 10
of a loss of the industrial or commercial customer's contribution 11
to a utility's fixed costs. 12
(8) The commission shall adopt standard rate application 13
filing forms and instructions for use in all general rate cases 14
filed by utilities whose rates are regulated by the commission. For 15
cooperative electric utilities whose rates are regulated by the 16
commission, in addition to rate applications filed under this 17
section, the commission shall continue to allow for rate filings 18
based on the cooperative's times interest earned ratio. The 19
commission may modify the standard rate application forms and 20
instructions adopted under this subsection. 21
(9) If, on or before January 1, 2008, a merchant plant entered 22
into a contract with an initial term of 20 years or more to sell 23
electricity to an electric utility whose rates are regulated by the 24
commission with 1,000,000 or more retail customers in this state 25
and if, before January 1, 2008, the merchant plant generated 26
electricity under that contract, in whole or in part, from wood or 27
solid wood wastes, then the merchant plant shall, upon on petition 28
by the merchant plant, and subject to the limitation set forth in 29
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subsection (10), recover the amount, if any, by which the merchant 1
plant's reasonably and prudently incurred actual fuel and variable 2
operation and maintenance costs exceed the amount that the merchant 3
plant is paid under the contract for those costs. This subsection 4
does not apply to landfill gas plants, hydro plants, municipal 5
solid waste plants, or to merchant plants engaged in litigation 6
against an electric utility seeking higher payments for power 7
delivered pursuant to contract. 8
(10) The total aggregate additional amounts recoverable by 9
merchant plants under subsection (9) in excess of the amounts paid 10
under the contracts must not exceed $1,000,000.00 per month for 11
each affected electric utility. The $1,000,000.00 per month limit 12
specified in this subsection must be reviewed by the commission 13
upon on petition of the merchant plant filed no more than once per 14
year and may be adjusted if the commission finds that the eligible 15
merchant plants reasonably and prudently incurred actual fuel and 16
variable operation and maintenance costs exceed the amount that 17
those merchant plants are paid under the contract by more than 18
$1,000,000.00 per month. The annual amount of the adjustments must 19
not exceed a rate equal to the United States Consumer Price Index. 20
The commission shall not make an adjustment unless each affected 21
merchant plant files a petition with the commission. If the total 22
aggregate amount by which the eligible merchant plants reasonably 23
and prudently incurred actual fuel and variable operation and 24
maintenance costs determined by the commission exceed the amount 25
that the merchant plants are paid under the contract by more than 26
$1,000,000.00 per month, the commission shall allocate the 27
additional $1,000,000.00 per month payment among the eligible 28
merchant plants based upon on the relationship of excess costs 29
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among the eligible merchant plants. The $1,000,000.00 limit 1
specified in this subsection, as adjusted, does not apply to actual 2
fuel and variable operation and maintenance costs that are incurred 3
due to changes in federal or state environmental laws or 4
regulations that are implemented after October 6, 2008. The 5
$1,000,000.00 per month payment limit under this subsection does 6
not apply to merchant plants eligible under subsection (9) whose 7
electricity is purchased by a utility that is using wood or wood 8
waste or fuels derived from those materials for fuel in their its 9
power plants. As used in this subsection, "United States Consumer 10
Price Index" means the United States Consumer Price Index for all 11
urban consumers as defined and reported by the United States 12
Department of Labor, Bureau of Labor Statistics. 13
(11) The commission shall issue orders to permit the recovery 14
authorized under subsections (9) and (10) upon on petition of the 15
merchant plant. The merchant plant is not required to alter or 16
amend the existing contract with the electric utility in order to 17
obtain the recovery under subsections (9) and (10). The commission 18
shall permit or require the electric utility whose rates are 19
regulated by the commission to recover from its ratepayers all fuel 20
and variable operation and maintenance costs that the electric 21
utility is required to pay to the merchant plant as reasonably and 22
prudently incurred costs. 23
(12) Subject to subsection (13), if requested by an electric 24
utility with less than 200,000 customers in this state, the 25
commission shall approve an appropriate revenue decoupling 26
mechanism that adjusts for decreases in actual sales compared to 27
the projected levels used in that utility's most recent rate case 28
that are the result of implemented energy waste reduction, 29
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conservation, demand-side programs, and other waste reduction 1
measures, if the utility first demonstrates the following to the 2
commission: 3
(a) That the projected sales forecast in the utility's most 4
recent rate case is reasonable. 5
(b) That the electric utility has achieved annual incremental 6
energy savings at least equal to the lesser of the following: 7
(i) The incremental energy savings requirement of section 77(1) 8
of the clean and renewable energy and energy waste reduction act, 9
2008 PA 295, MCL 460.1077. 10
(ii) The amount of any incremental savings yielded by energy 11
waste reduction, conservation, demand-side programs, and other 12
waste reduction measures approved by the commission in that 13
utility's most recent integrated resource plan. 14
(12) (13) The commission shall consider the aggregate revenues 15
attributable to revenue decoupling mechanisms, financial 16
incentives, and shared savings mechanisms the commission has 17
approved for an electric utility relative to energy waste 18
reduction, conservation, demand-side programs, peak load reduction, 19
and other waste reduction measures. The commission may approve an 20
alternative methodology for a revenue decoupling mechanism 21
authorized under subsection (12) or a financial incentive 22
authorized under section 75 of the clean and renewable energy and 23
energy waste reduction act, 2008 PA 295, MCL 460.1075, if the 24
commission determines that the resulting aggregate revenues from 25
those mechanisms would not result in a reasonable and cost-26
effective method to ensure that investments in energy waste 27
reduction, demand-side programs, peak load reduction, and other 28
waste reduction measures are not disfavored when compared to 29
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utility supply-side investments. The commission's consideration of 1
an alternative methodology under this subsection must be conducted 2
as a contested case in accordance with chapter 4 of the 3
administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 4
24.288. 5
(13) (14) By April 20, 2018, the commission shall conduct a 6
study on an appropriate tariff reflecting equitable cost of service 7
for utility revenue requirements for customers who participate in a 8
net metering program or distributed generation program under the 9
clean and renewable energy and energy waste reduction act, 2008 PA 10
295, MCL 460.1001 to 460.1211. 460.1232. In any rate case filed 11
after June 1, 2018, the commission shall , subject to section 12
173(7) of the clean and renewable energy and energy waste reduction 13
act, 2008 PA 295, MCL 460.1173, approve such a tariff for inclusion 14
in the rates of all customers participating in a net metering or 15
distributed generation program under the clean and renewable energy 16
and energy waste reduction act, 2008 PA 295, MCL 460.1001 to 17
460.1211. 460.1232. A tariff established under this subsection does 18
not apply to customers participating in a net metering program 19
under the clean and renewable energy and energy waste reduction 20
act, 2008 PA 295, MCL 460.1001 to 460.1211, 460.1232, before the 21
date that the commission establishes a tariff under this 22
subsection, who continues to participate in the program at their 23
current site or facility. 24
(14) (15) Except as otherwise provided in this act, "utility" 25
and "electric utility" do not include a municipally owned electric 26
utility. 27
(15) (16) As used in this section: 28
(a) "Full and complete hearing" means a hearing that provides 29
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interested parties a reasonable opportunity to present and cross-1
examine evidence and present arguments relevant to the specific 2
element or elements of the request that are the subject of the 3
hearing. 4
(b) "General rate case" means a proceeding initiated by a 5
utility in an application filed with the commission that alleges a 6
revenue deficiency and requests an increase in the schedule of 7
rates or charges based on the utility's total cost of providing 8
service. 9
(c) "Steam utility" means a steam distribution company 10
regulated by the commission. 11
Sec. 6l. (1) For purposes of implementing sections 6a, 6h, 6j, 12
6s, and 6t, this section and section 6m provide a means of insuring 13
equitable representation of the interests of energy utility 14
customers. 15
(2) As used in this section and section 6m: 16
(a) "Annual receipts" means the payments received by the fund 17
under section 6m(2)(a) , and (b) , (c), and (d) during a calendar 18
year. 19
(b) "Board" means the utility consumer participation board 20
created under subsection (3). 21
(c) "Commission" means the Michigan public service commission. 22
(d) "Department" means the department of licensing and 23
regulatory affairs. 24
(e) "Energy cost recovery proceeding" means any proceeding to 25
establish or implement a gas cost recovery clause or a power supply 26
cost recovery clause as provided in section 6h or 6j, to set gas 27
cost recovery factors under section 6h(17), or to set power supply 28
cost recovery factors under section 6j(18). 29
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(f) "Energy utility" means each electric or gas company 1
regulated by the commission. 2
(g) "Fund" means the utility consumer representation fund 3
created in section 6m. 4
(h) "Household" means a single-family home, duplex, mobile 5
home, seasonal dwelling, farm home, cooperative, condominium, or 6
apartment that has normal household facilities such as a bathroom, 7
individual cooking facilities, and kitchen sink facilities. 8
Household does not include a penal or corrective institution, or a 9
motel, hotel, or other similar structure if used as a transient 10
dwelling. 11
(i) "Jurisdictional" means subject to rate regulation by the 12
commission. 13
(j) "Net grant proceeds" means the annual receipts of the fund 14
less the amounts reserved for the attorney general's use and the 15
amounts expended for board expenses and operation. 16
(j) (k) "Residential energy utility consumer" or "consumer" 17
means a customer of an energy utility who receives utility service 18
for use within an individual household or an improvement reasonably 19
appurtenant to and normally associated with an individual 20
household. 21
(k) (l) "Residential tariff sales" means those sales by an 22
energy utility that are subject to residential tariffs on file with 23
the commission. 24
(l) (m) "Utility consuming industry" means a person, sole 25
proprietorship, partnership, association, corporation, or other 26
entity that receives utility service ordinarily and primarily for 27
use in connection with the manufacture, sale, or distribution of 28
goods or the provision of services, but does not include a 29
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nonprofit organization representing residential utility customers. 1
(3) The utility consumer participation board is created within 2
in the department and shall exercise its powers and duties under 3
this act independently of the department. The procurement and 4
related management functions of the board shall must be performed 5
under the direction and supervision of the department. The board 6
shall consist consists of 5 members appointed by the governor, 1 of 7
whom shall must be chosen from 1 or more lists of qualified persons 8
submitted by the attorney general. 9
(4) For the purposes of subsection (5) only, "utility" means 10
an electric or gas company located in or outside of this state. 11
(5) Each member of the board shall meet the following 12
requirements: 13
(a) Shall be an advocate for the interests of residential 14
utility consumers, as demonstrated by the member's knowledge of and 15
support for consumer interests and concerns in general or 16
specifically related to utility matters. 17
(b) Shall not be, or shall not have been within the 5 years 18
preceding appointment, a member of a governing body of, or employed 19
in a managerial or professional or consulting capacity by a utility 20
or an association representing utilities; an enterprise or 21
professional practice that received over $1,500.00 in the year 22
preceding the appointment as a supplier of goods or services to a 23
utility or association representing utilities; or an organization 24
representing employees of such a utility, association, enterprise, 25
or professional practice, or an association that represents such an 26
organization. 27
(c) Shall not have, or shall not have had within 1 year 28
preceding appointment, a financial interest exceeding $1,500.00 in 29
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a utility, an association representing utilities, or an enterprise 1
or professional practice that received over $1,500.00 in the year 2
preceding the appointment as a supplier of goods or services to a 3
utility or association representing utilities. 4
(d) Shall not be an officer or director of an applicant for a 5
grant under section 6m. 6
(d) (e) Shall not be a member of the immediate family of an 7
individual who would be ineligible under subdivision (a), (b), or 8
(c). , or (d). 9
(6) The members of the board shall must be appointed for 2-10
year terms beginning with the first day of a legislative session in 11
an odd-numbered year and ending on the day before the first day of 12
the legislative session in the next odd-numbered year or when the 13
members' successors are appointed, whichever occurs later. The 14
governor shall not appoint a member to the board for a term 15
commencing after the governor's term of office has ended. A vacancy 16
shall must be filled in the same manner as the original 17
appointment. If the vacancy is created other than by expiration of 18
a term, the member shall must be appointed for the balance of the 19
unexpired term of the member to be succeeded. 20
(7) The governor shall remove a member of the board if that 21
member is absent for any reason from either 3 consecutive board 22
meetings or more than 50% of the meetings held by the board in a 23
calendar year. However, an individual who is removed due to 24
absenteeism is eligible for reappointment to fill a vacancy that 25
occurs in the board membership. The governor also shall remove a 26
member of the board if the member is subsequently determined to be 27
ineligible under subsection (5). 28
(8) The board shall hold bimonthly meetings and additional 29
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meetings as necessary. A quorum consists of 3 members. A majority 1
vote of the members appointed and serving is necessary for a 2
decision. At its first meeting following the appointment of new 3
members, or as soon as possible after the first meeting, the board 4
shall elect biennially from its membership a chairperson and a 5
vice-chairperson. 6
(9) The board shall not act directly to represent the 7
interests of residential utility consumers except through 8
administration of the fund and grant program under this section. 9
(10) The business that the board may perform shall must be 10
conducted at a public meeting of the board held in compliance with 11
the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public 12
notice of the time, date, and place of the meeting shall must be 13
given in the manner required by the open meetings act, 1976 PA 267, 14
MCL 15.261 to 15.275. 15
(11) A writing prepared, owned, used, in the possession of, or 16
retained by the board in the performance of an official function 17
shall must be made available to the public in compliance with the 18
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. 19
(12) A member of the board may be reimbursed for actual and 20
necessary expenses, including travel expenses to and from each 21
meeting held by the board, incurred in discharging the member's 22
duties under this section and section 6m. In addition to expense 23
reimbursement, a board member may receive remuneration from the 24
board of $100.00 per meeting attended, not to exceed $1,000.00 in a 25
calendar year. These limits shall be adjusted proportionately to an 26
adjustment in the remittance amounts under section 6m(4) to allow 27
for changes in the cost of living. 28
Sec. 6m. (1) The utility consumer representation fund is 29
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created as a special fund. The state treasurer is the custodian of 1
the fund and shall maintain a separate account of the money in the 2
fund. The money in the fund must be invested in the bonds, notes, 3
and other evidences of indebtedness issued or insured by the United 4
States government and its agencies, and in prime commercial paper. 5
The state treasurer shall release money from the fund, including 6
interest earned, in the manner and at the time directed by the 7
board. 8
(2) Except as provided in subsection (5), each energy utility 9
that has applied to the commission for the initiation of an energy 10
cost recovery proceeding shall remit to the fund before or upon on 11
filing its initial application for that proceeding, and on or 12
before the first anniversary of that application, an amount of 13
money determined by the board in the following manner: 14
(a) In the case of an energy utility company serving at least 15
100,000 customers in this state, its proportional share of 16
$1,800,000.00 $2,500,000.00 adjusted annually by a factor as 17
provided in subsection (4). This adjusted amount is the new base 18
amount to which the factor provided in subsection (4) is applied in 19
the succeeding year. A utility's proportional share must be 20
calculated by dividing the company's jurisdictional total operating 21
revenues for the preceding year, as stated in its annual report, by 22
the total operating revenues for the preceding year of all energy 23
utility companies serving at least 100,000 customers in this state. 24
The board shall make this amount available for use by the attorney 25
general for the purposes described in subsection (16). 26
(b) In the case of an energy utility company serving at least 27
100,000 residential customers in this state, its proportional share 28
of $2,000,000.00 adjusted annually by a factor as provided in 29
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subsection (4). This adjusted amount is the new base amount to 1
which the factor provided in subsection (4) is applied in the 2
succeeding year. A utility's proportional share must be calculated 3
by dividing the company's jurisdictional gross revenues from 4
residential tariff sales for the preceding year by the gross 5
revenues from residential tariff sales for the preceding year of 6
all energy utility companies serving at least 100,000 residential 7
customers in this state. This amount must be used for grants under 8
subsection (10). 9
(b) (c) In the case of an energy utility company serving fewer 10
than 100,000 customers in this state, its proportional share of 11
$100,000.00 $150,000.00 adjusted annually by a factor as provided 12
in subsection (4). This adjusted amount is the new base amount to 13
which the factor provided in subsection (4) is applied in the 14
succeeding year. A utility's proportional share must be calculated 15
by dividing the company's jurisdictional total operating revenues 16
for the preceding year, as stated in its annual report, by the 17
total operating revenues for the preceding year of all energy 18
utility companies serving fewer than 100,000 customers in this 19
state. The board shall make this amount available for use by the 20
attorney general for the purposes described in subsection (16). 21
(d) In the case of an energy utility company serving fewer 22
than 100,000 residential customers in this state, its proportional 23
share of $100,000.00 adjusted annually by a factor as provided in 24
subsection (4). This adjusted amount is the new base amount to 25
which the factor provided in subsection (4) is applied in the 26
succeeding year. A utility's proportional share must be calculated 27
by dividing the company's jurisdictional gross revenues from 28
residential tariff sales for the preceding year by the gross 29
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KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
revenues from residential tariff sales for the preceding year of 1
all energy utility companies serving fewer than 100,000 residential 2
customers in this state. This amount must be used for grants under 3
subsection (10). 4
(3) Payments made by an energy utility under subsection (2)(a) 5
or (c) (b) are operating expenses of the utility that the 6
commission shall permit the utility to charge to its customers. 7
Payments made by a utility under subsection (2)(b) or (d) are 8
operating expenses of the utility that the commission shall permit 9
the utility to charge to its residential customers. 10
(4) For purposes of subsection (2), the board shall set the 11
factor at a level not to exceed the percentage increase in the 12
index known as the Consumer Price Index for urban wage earners and 13
clerical workers, select areas, all items indexed, for the Detroit 14
standard metropolitan statistical area, compiled by the Bureau of 15
Labor Statistics of the United States Department of Labor, or any 16
successor agency, that has occurred between January of the 17
preceding year and January of the year in which the payment is 18
required to be made. In the event that more than 1 such index is 19
compiled, the index yielding the largest payment is the maximum 20
allowable factor. The board shall advise utilities of the factor. 21
(5) The remittance requirements of this section do not apply 22
to an energy utility organized as a cooperative corporation under 23
sections 98 to 109 of 1931 PA 327, MCL 450.98 to 450.109. , and 24
grants from the fund must not be used to participate in an energy 25
cost recovery proceeding primarily affecting such a utility. 26
(6) In the event of a dispute between the board and an energy 27
utility about the amount of payment due, the utility shall pay the 28
undisputed amount and, if the utility and the board cannot agree, 29
20
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
the board may initiate civil action in the circuit court for Ingham 1
County for recovery of the disputed amount. The commission shall 2
not accept or take action on an application for an energy cost 3
recovery proceeding from an energy utility subject to this section 4
that has not fully paid undisputed remittances required by this 5
section. 6
(7) The commission shall not accept or take action on an 7
application for an energy cost recovery proceeding from an energy 8
utility subject to this section until 30 days after it has been 9
notified by the board that the board is ready to process grant 10
applications, will transfer funds payable to the attorney general 11
immediately upon on the receipt of those funds. , and will within 12
30 days approve grants and remit funds to qualified grant 13
applicants. 14
(8) The board may accept a gift or grant from any source to be 15
deposited in the fund if the conditions or purposes of the gift or 16
grant are consistent with this section. 17
(9) The costs of operation and expenses incurred by the board 18
in performing its duties under this section and section 6l, 19
including remuneration to board members, must be paid from the 20
fund. A maximum of 5% of the annual receipts of the fund may be 21
budgeted and used to pay expenses. other than grants made under 22
subsection (10). 23
(10) The net grant proceeds must finance a grant program from 24
which the board may award to an applicant an amount that the board 25
determines shall be used for the purposes set forth in this 26
section. 27
(11) The board shall create and make available to applicants 28
an application form. Each applicant shall indicate on the 29
21
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
application how the applicant meets the eligibility requirements 1
provided for in this section and how the applicant proposes to use 2
a grant from the fund to participate in 1 or more proceedings as 3
authorized in subsection (16) that have been or are expected to be 4
filed. Each applicant shall also identify on the application any 5
additional funds or resources, other than the grant funds being 6
requested, that are to be used to participate in the proceeding for 7
which the grant is being requested and how those funds or resources 8
will be utilized. The board shall receive an application requesting 9
a grant from the fund only from a nonprofit organization or a unit 10
of local government in this state. The board shall consider only 11
applications for grants containing proposals that are consistent 12
with subsections (16) and (17) and that serve the interests of 13
residential utility consumers. The interest of residential 14
consumers includes, but is not limited to, considerations of 15
utility service in this state; the reduction of greenhouse gas 16
emissions from the utility sector; and the protection of public 17
health, equitable access to energy efficiency, weatherization, 18
efficient electrification measures, programs and services, and 19
clean energy technologies. For purposes of making grants, the board 20
may consider energy conservation, energy waste reduction, demand 21
response, and rate design options to encourage energy conservation, 22
energy waste reduction, and demand response, as well as the 23
maintenance of adequate energy resources. The board shall not 24
consider an application that primarily benefits the applicant or a 25
service provided or administered by the applicant. The board shall 26
not consider an application from a nonprofit organization if 1 of 27
the organization's principal interests or unifying principles is 28
the welfare of a utility or its investors or employees, or the 29
22
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
welfare of 1 or more businesses or industries, other than farms not 1
owned or operated by a corporation, that receive utility service 2
ordinarily and primarily for use in connection with the profit-3
seeking manufacture, sale, or distribution of goods or services. 4
Mere ownership of securities by a nonprofit organization or its 5
members does not disqualify an application submitted by that 6
organization. 7
(12) The board shall encourage grant making to nonprofits 8
representing environmental justice communities and communities with 9
the highest energy burdens. The board shall also encourage the 10
interests of identifiable types of residential utility consumers 11
whose interests may differ, including various social and economic 12
classes and areas of the state, and if necessary, may make grants 13
to more than 1 applicant whose applications are related to a 14
similar issue to achieve this type of representation. In addition, 15
the board shall consider and balance the following criteria in 16
determining whether to make a grant to an applicant: 17
(a) Evidence of the applicant's competence, experience, and 18
commitment to advancing the interests of residential utility 19
consumers. 20
(b) The anticipated involvement of the attorney general in a 21
proceeding and whether activities of the applicant will be 22
duplicative or supplemental to those of the attorney general. 23
(c) In the case of a nongovernmental applicant, the extent to 24
which the applicant is representative of or has a previous history 25
of advocating the interests of citizens, especially residential 26
utility consumers. 27
(d) The anticipated effect of the proposal contained in the 28
application on residential utility consumers, including the 29
23
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
immediate and long-term impacts of the proposal. 1
(e) Evidence demonstrating the potential for continuity of 2
effort and the development of expertise in relation to the proposal 3
contained in the application. 4
(f) The uniqueness or innovativeness of an applicant's 5
position or point of view as it relates to advocating for 6
residential utility consumers concerning energy costs or rates, and 7
the probability and desirability of that position or point of view 8
prevailing. 9
(13) As an alternative to choosing between 2 or more 10
applications that have similar proposals, the board may invite 2 or 11
more of the applicants to file jointly and award a grant to be 12
managed cooperatively. 13
(14) The board shall make disbursements pursuant to a grant in 14
advance of an applicant's proposed actions as set forth in the 15
application if necessary to enable the applicant to initiate, 16
continue, or complete the proposed actions. 17
(15) Any notice to utility customers and the general public of 18
hearings or other state proceedings in which grants from the fund 19
may be used must contain a notice of the availability of the fund 20
and the address of the board. 21
(10) (16) The annual receipts and interest earned, less 22
administrative costs, may be used only for participation in 23
administrative and judicial proceedings under sections 6a, 6h, 6j, 24
6s, and 6t, 6w, and 10i, and the clean and renewable energy and 25
energy waste reduction act, 2008 PA 295, MCL 460.1001 to 460.1211, 26
and in federal administrative and judicial proceedings that 27
directly affect the energy costs or rates paid by energy utility 28
customers in this state. Amounts that have been in the fund more 29
24
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
than 12 months may be retained in the fund for future proceedings 1
and any unexpended money in the fund is reserved to fulfill the 2
purposes for which it was appropriated or may be returned to energy 3
utility companies or used to offset their future remittances in 4
proportion to their previous remittances to the fund, as the board 5
and attorney general determine will best serve the interests of 6
consumers. 7
(17) The following conditions apply to all grants from the 8
fund: 9
(a) Disbursements from the fund may be used only to advocate 10
the interests of residential energy utility customers concerning 11
energy costs or rates and not for representation of merely 12
individual interests. 13
(b) The board shall attempt to maintain a reasonable 14
relationship between the payments from a particular energy utility 15
and the benefits to consumers of that utility. 16
(c) The board shall coordinate the funded activities of grant 17
recipients with those of the attorney general to avoid duplication 18
of effort, particularly as it relates to the hiring of expert 19
witnesses, to promote supplementation of effort, and to maximize 20
the number of hearings and proceedings with intervenor 21
participation. 22
(18) A recipient of a grant under subsection (10) may use the 23
grant only for the advancement of the proposed action approved by 24
the board, including, but not limited to, costs of staff, hired 25
consultants and counsel, and research. 26
(19) A recipient of a grant under subsection (10) shall 27
prepare for and participate in all discussions among the parties 28
designed to facilitate settlement or narrowing of the contested 29
25
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
issues before a hearing in order to minimize litigation costs for 1
all parties. 2
(20) A recipient of a grant under subsection (10) shall file a 3
report with the board not later than 90 days following the end of 4
the year or a shorter period for which the grant is made. The 5
report must be made in a form prescribed by the board and is 6
subject to audit by the board. The board shall include each report 7
received under this subsection as part of the board's annual report 8
required under subsection (22). The report under this subsection 9
must include the following information: 10
(a) An account of all grant expenditures made by the grant 11
recipient. Expenditures must be reported within the following 12
categories: 13
(i) Employee and contract for services costs. 14
(ii) Costs of materials and supplies. 15
(iii) Filing fees and other costs required to effectively 16
represent residential utility consumers as provided in this 17
section. 18
(b) A detailed list of the regulatory issues raised by the 19
grant recipient and how each issue was determined by the 20
commission, court, or other tribunal. 21
(c) Any additional information concerning uses of the grant 22
required by the board. 23
(11) (21) On or before July 1 of each year, the attorney 24
general shall file a report with the house and senate committees on 25
appropriations and the house and senate committees with 26
jurisdiction over energy and utility policy issues. The report must 27
include the following information: 28
(a) An account of all expenditures made by the attorney 29
26
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
general of money received under this section. Expenditures must be 1
reported in the following categories: 2
(i) Employee and contract for services costs. 3
(ii) Costs of materials and supplies. 4
(iii) Filing fees and other costs required to effectively 5
represent utility consumers as provided in this section. 6
(b) Any additional information concerning uses of the money 7
received under this section required by the committees. 8
(12) (22) On or before July 1 of each calendar year, the board 9
shall submit a detailed report to the house and senate committees 10
with jurisdiction over energy and utility policy issues regarding 11
the discharge of duties and responsibilities under this section and 12
section 6l during the preceding calendar year. 13
Sec. 6t. (1) The commission shall, by August 31, 2025, and 14
every 4 5 years thereafter, commence a proceeding and, in 15
consultation with the department of environment, Great Lakes, and 16
energy, and other interested parties, do all of the following as 17
part of the proceeding: 18
(a) Conduct an assessment of the potential for energy waste 19
reduction in this state. 20
(a) (b) Conduct an assessment for the use of demand response 21
programs in this state, based on what is economically and 22
technologically feasible, as well as what is reasonably achievable. 23
The assessment must expressly account for advanced metering 24
infrastructure that has already been installed in this state and 25
seek to fully maximize potential benefits to ratepayers in lowering 26
utility bills. 27
(b) (c) Identify significant state or federal environmental 28
regulations, laws, or rules and how each regulation, law, or rule 29
27
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
would affect electric utilities in this state. 1
(c) (d) Identify any formally proposed state or federal 2
environmental regulation, law, or rule that has been published in 3
the Michigan Register or the Federal Register and how the proposed 4
regulation, law, or rule would affect electric utilities in this 5
state. 6
(d) (e) Identify any required planning reserve margins and 7
local clearing requirements in areas of this state. 8
(e) (f) Establish the modeling scenarios and assumptions each 9
electric utility should include in addition to its own scenarios 10
and assumptions in developing its integrated resource plan filed 11
under subsection (3), including, but not limited to, all of the 12
following: 13
(i) Any required planning reserve margins and local clearing 14
requirements. 15
(ii) All applicable state and federal environmental 16
regulations, laws, and rules identified in this subsection. 17
(iii) Any supply-side and demand-side resources that reasonably 18
could address any need for additional generation capacity, 19
including, but not limited to, the type of generation technology 20
for any proposed generation facility , projected energy waste 21
reduction savings, projected load impact due to electrification, 22
and projected load management and demand response savings. 23
(iv) Any regional infrastructure limitations in this state. 24
(v) The projected costs of different types of technologies and 25
fuel used for electric generation. 26
(f) (g) Allow other state agencies to provide input regarding 27
any other regulatory requirements that should be included in 28
modeling scenarios or assumptions. 29
28
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
(g) (h) Publish a copy of the proposed modeling scenarios and 1
assumptions to be used in integrated resource plans on the 2
commission's website. 3
(h) (i) Before issuing the final modeling scenarios and 4
assumptions each electric utility should include in developing its 5
integrated resource plan, receive written comments and hold 6
hearings to solicit public input regarding the proposed modeling 7
scenarios and assumptions. 8
(j) Conduct an assessment of the potential for electrification 9
of transportation, buildings, and industries consistent with 10
economy-wide elimination of greenhouse gas emissions in this state, 11
based on what is economically and technically feasible, as well as 12
what is reasonably achievable. 13
(k) Identify environmental justice communities. 14
(2) A proceeding commenced under subsection (1) must be 15
completed within 120 days, and is not a contested case under 16
chapter 4 of the administrative procedures act of 1969, 1969 PA 17
306, MCL 24.271 to 24.288. The determination of the modeling 18
assumptions for integrated resource plans made under subsection (1) 19
is not considered a final order for purposes of judicial review. 20
The determinations made under subsection (1) are only subject to 21
judicial review as part of the final commission order approving an 22
integrated resource plan under this section. 23
(3) Not later than April 20, 2019, each electric utility whose 24
rates are regulated by the commission shall file with the 25
commission an integrated resource plan that provides a 5-year, 10-26
year, and 15-year projection of the utility's load obligations and 27
a plan to meet those obligations, to meet the utility's 28
requirements to provide generation reliability, including meeting 29
29
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
planning reserve margin and local clearing requirements determined 1
by the commission or the appropriate independent system operator, 2
and to meet all applicable state and federal reliability and 3
environmental regulations over the ensuing term of the plan. The 4
commission shall issue an order establishing filing requirements, 5
including application forms and instructions, and filing deadlines 6
for an integrated resource plan filed by an electric utility whose 7
rates are regulated by the commission. The electric utility's plan 8
may include alternative modeling scenarios and assumptions in 9
addition to those identified under subsection (1). 10
(4) For an electric utility with fewer than 1,000,000 11
customers in this state whose rates are regulated by the 12
commission, the commission may issue an order implementing separate 13
filing requirements, review criteria, and approval standards that 14
differ from those established under subsection (3). An electric 15
utility providing electric tariff service to customers both in this 16
state and in at least 1 other state may design its integrated 17
resource plan to cover all its customers on that multistate basis. 18
If an electric utility has filed a multistate integrated resource 19
plan that includes its service area in this state with the relevant 20
utility regulatory commission in another state in which it provides 21
tariff service to retail customers, the commission shall accept 22
that integrated resource plan filing for filing purposes in this 23
state. However, the commission may require supplemental information 24
if necessary as part of its evaluation and determination of whether 25
to approve the plan. Upon On request of an electric utility, the 26
commission may adjust the filing dates for a multistate integrated 27
resource plan filing in this state to place its review on the same 28
timeline as other relevant state reviews. 29
30
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
(5) An integrated resource plan must include all of the 1
following: 2
(a) A long-term forecast of the electric utility's sales and 3
peak demand under various reasonable scenarios. 4
(b) The type of generation technology proposed for a 5
generation facility contained in the plan and the proposed capacity 6
of the generation facility, including projected fuel costs under 7
various reasonable scenarios. 8
(c) Projected energy purchased or produced by the electric 9
utility from a renewable energy resource. If the level of renewable 10
energy purchased or produced is projected to drop over the planning 11
periods set forth in subsection (3), the electric utility must 12
demonstrate why the reduction is in the best interest of 13
ratepayers. 14
(d) An analysis of how the electric utility's plan complies 15
with the renewable energy plan requirements and goals of section 28 16
of the clean and renewable energy and energy waste reduction act, 17
2008 PA 295, MCL 460.1028, the clean energy requirements of section 18
51 of the clean and renewable energy and energy waste reduction 19
act, 2008 PA 295, MCL 460.1051, the energy waste reduction measures 20
in section 77 of the clean and renewable energy and energy waste 21
reduction act, 2008 PA 295, MCL 460.1077, and the energy storage 22
target of section 101 of the clean and renewable energy and energy 23
waste reduction act, 2008 PA 295, MCL 460.1101. 24
(e) Projected load management and demand response savings for 25
the electric utility and the projected costs for those programs. 26
(f) Projected energy and capacity purchased or produced by the 27
electric utility from a cogeneration resource. 28
(g) An analysis of potential new or upgraded electric 29
31
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
transmission options for the electric utility. 1
(h) Data regarding the utility's current generation portfolio, 2
including the age, capacity factor, licensing status, and remaining 3
estimated time of operation for each facility in the portfolio. 4
(i) Plans for meeting current and future capacity needs with 5
the cost estimates for all proposed construction and major 6
investments, including any transmission or distribution 7
infrastructure that would be required to support the proposed 8
construction or investment, and power purchase agreements. 9
(j) An analysis of the cost, capacity factor, and viability of 10
all reasonable options available to meet projected energy and 11
capacity needs, including, but not limited to, existing electric 12
generation facilities in this state. 13
(k) Projected rate and affordability impact for the periods 14
covered by the plan. 15
(l) How the utility will comply with all applicable state and 16
federal environmental regulations, laws, and rules, and the 17
projected costs of complying with those regulations, laws, and 18
rules. 19
(m) A forecast of the utility's peak demand and details 20
regarding the amount of peak demand reduction the utility expects 21
to achieve and the actions the utility proposes to take in order to 22
achieve that peak demand reduction. 23
(n) The projected long-term firm gas transportation contracts 24
or natural gas storage the electric utility will hold to provide an 25
adequate supply of natural gas to any new generation facility. 26
(o) The projected long-term forecast of greenhouse gas 27
emissions and other pollutants from power generated or purchased by 28
the electric utility. The electric utility may include details on 29
32
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
the broader emissions impact of shifting to electrification of 1
transportation, buildings, and industries. 2
(p) An environmental justice impact analysis that includes a 3
review of the reasonably anticipated environmental justice impacts 4
for any plan that includes the construction of a new natural-gas-5
fired generation facility and an analysis of whether the facility 6
complies with the requirements for clean energy systems established 7
in the clean and renewable energy and energy waste reduction act, 8
2008 PA 295, MCL 460.1001 to 460.1211. If a plan proposes retiring 9
or retaining 1 or more fossil fuel peaking plants, in an 10
environmental justice community, a review of the reasonably 11
anticipated environmental justice impacts for each generation 12
facility. 13
(6) Before filing an integrated resource plan under this 14
section, each electric utility whose rates are regulated by the 15
commission shall issue a request for proposals to provide any new 16
supply-side generation capacity resources needed to serve the 17
utility's reasonably projected electric load, applicable planning 18
reserve margin, and local clearing requirement for its customers in 19
this state and customers the utility serves in other states during 20
the initial 3-year planning period to be considered in each 21
integrated resource plan to be filed under this section. An 22
electric utility shall define qualifying performance standards, 23
contract terms, technical competence, capability, reliability, 24
creditworthiness, past performance, and other criteria that 25
responses and respondents to the request for proposals must meet in 26
order to be considered by the utility in its integrated resource 27
plan to be filed under this section. Respondents to a request for 28
proposals may request that certain proprietary information be 29
33
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
exempt from public disclosure as allowed by the commission. A 1
utility that issues a request for proposals under this subsection 2
shall use the resulting proposals to inform its integrated resource 3
plan filed under this section and include all of the submitted 4
proposals as attachments to its integrated resource plan filing 5
regardless of whether the proposals met the qualifying performance 6
standards, contract terms, technical competence, capability, 7
reliability, creditworthiness, past performance, or other criteria 8
specified for the utility's request for proposals under this 9
section. An existing supplier of electric generation capacity 10
currently producing at least 200 megawatts of firm electric 11
generation capacity resources located in the independent system 12
operator's zone in which the utility's load is served that seeks to 13
provide electric generation capacity resources to the utility may 14
submit a written proposal directly to the commission as an 15
alternative to any supply-side generation capacity resource 16
included in the electric utility's integrated resource plan 17
submitted under this section, and has standing to intervene in the 18
contested case proceeding conducted under this section. This 19
subsection does not require an entity that submits an alternative 20
under this subsection to submit an integrated resource plan. This 21
subsection does not limit the ability of any other person to submit 22
to the commission an alternative proposal to any supply-side 23
generation capacity resource included in the electric utility's 24
integrated resource plan submitted under this section and to 25
petition for and be granted leave to intervene in the contested 26
case proceeding conducted under this section under the rules of 27
practice and procedure of the commission. The commission shall only 28
consider an alternative proposal submitted under this subsection as 29
34
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
part of its approval process under subsection (8). The electric 1
utility submitting an integrated resource plan under this section 2
is not required to adopt any proposals submitted under this 3
subsection. To the extent practicable, each electric utility is 4
encouraged, but not required, to partner with other electric 5
providers in the same local resource zone as the utility's load is 6
served in the development of any new supply-side generation 7
capacity resources included as part of its integrated resource 8
plan. 9
(7) Not later than 300 days after an electric utility files an 10
integrated resource plan under this section, the commission shall 11
state if the commission has any recommended changes, and if so, 12
describe them in sufficient detail to allow their incorporation in 13
the integrated resource plan. If the commission does not recommend 14
changes, it shall issue a final, appealable order approving or 15
denying the plan filed by the electric utility. If the commission 16
recommends changes, the commission shall set a schedule allowing 17
parties at least 15 days after that recommendation to file comments 18
regarding those recommendations, and allowing the electric utility 19
at least 30 days to consider the recommended changes and submit a 20
revised integrated resource plan that incorporates 1 or more of the 21
recommended changes. If the electric utility submits a revised 22
integrated resource plan under this section, the commission shall 23
issue a final, appealable order approving the plan as revised by 24
the electric utility or denying the plan. The commission shall 25
issue a final, appealable order no later than 360 days after an 26
electric utility files an integrated resource plan under this 27
section. Up to 150 days after an electric utility makes its initial 28
filing, the electric utility may file to update its cost estimates 29
35
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
if those cost estimates have materially changed. A utility shall 1
not modify any other aspect of the initial filing unless the 2
utility withdraws and refiles the application. A utility's filing 3
updating its cost estimates does not extend the period for the 4
commission to issue an order approving or denying the integrated 5
resource plan. The following are applicable to an integrated 6
resource plan filed under this section: 7
(a) The commission shall do all of the following: 8
(i) Review the integrated resource plan in a contested case 9
proceeding conducted in accordance with chapter 4 of the 10
administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to 11
24.288. 12
(ii) Allow intervention by interested persons including 13
electric customers of the utility, respondents to the utility's 14
request for proposals under this section, or other parties approved 15
by the commission. 16
(iii) Request an advisory opinion from the department of 17
environment, Great Lakes, and energy regarding all of the 18
following:whether the integrated resource plan can reasonably be 19
expected to achieve compliance with the regulations, laws, or rules 20
identified in subsection (1). 21
(A) Whether any potential decrease in emissions of sulfur 22
dioxide, oxides of nitrogen, mercury, and particulate matter would 23
reasonably be expected to result if the integrated resource plan 24
proposed by the electric utility under subsection (3) was approved. 25
(B) Whether the integrated resource plan can reasonably be 26
expected to achieve compliance with the regulations, laws, or rules 27
identified in subsection (1). 28
(C) The potential impacts of proposed energy generation 29
36
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
resources and of any prudent and feasible alternatives identified 1
by the department on whether the plan makes adequate progress 2
toward achieving the clean energy standard established in section 3
51 of the clean and renewable energy and energy waste reduction 4
act, 2008 PA 295, MCL 460.1051. 5
(D) The potential impacts of the plan and of any prudent and 6
feasible alternatives identified by the department on whether the 7
plan makes adequate progress toward the economy-wide virtual 8
elimination of greenhouse gas emissions in this state by 2050. 9
(E) Whether the plan in comparison to any prudent and feasible 10
alternatives makes adequate progress toward the elimination of 11
adverse effects on human health due to power generation in this 12
state. 13
(F) Whether the plan in comparison to any prudent and feasible 14
alternatives adequately reduces harms to the health, safety, and 15
welfare of individuals in environmental justice communities. 16
(b) The commission may do 1 or both of the following: 17
(i) Take official notice of the opinion issued by the 18
department of environment, Great Lakes, and energy under this 19
subsection pursuant to R 792.10428 of the Michigan Administrative 20
Code. Information submitted by the department of environment, Great 21
Lakes, and energy under this subsection is advisory and is not 22
binding on future determinations by the department of environment, 23
Great Lakes, and energy or the commission in any proceeding or 24
permitting process. This section does not prevent an electric 25
utility from applying for, or receiving, any necessary permits from 26
the department of environment, Great Lakes, and energy. 27
(ii) Invite other state agencies to provide testimony regarding 28
other relevant regulatory requirements related to the integrated 29
37
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
resource plan. The commission shall permit reasonable discovery 1
after an integrated resource plan is filed and during the hearing 2
in order to assist parties and interested persons in obtaining 3
evidence concerning the integrated resource plan, including, but 4
not limited to, the reasonableness and prudence of the plan and 5
alternatives to the plan raised by intervening parties. 6
(8) The commission shall approve the integrated resource plan 7
under subsection (7) if the commission determines all of the 8
following: 9
(a) The proposed integrated resource plan represents the most 10
reasonable and prudent means of meeting the electric utility's 11
energy and capacity needs. To determine whether the integrated 12
resource plan is the most reasonable and prudent means of meeting 13
energy and capacity needs, the commission shall consider whether 14
the plan appropriately balances all of the following 15
factors:prioritizes reliability and affordability while minimizing 16
the net cost to ratepayers. The commission may consider other 17
factors only to the extent that those factors do not materially 18
compromise reliability or impose higher total costs on ratepayers. 19
In making a determination under this subdivision, the commission 20
shall evaluate all of the following: 21
(i) Resource adequacy and capacity to serve anticipated peak 22
electric load, applicable planning reserve margin, and local 23
clearing requirement. 24
(ii) Compliance with applicable state and federal environmental 25
regulations. 26
(iii) Competitive pricing.Projected costs. In evaluating 27
projected costs, the commission shall consider whether a generation 28
resource or resource portfolio is capable of providing electricity 29
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KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
at the lowest net system cost to ratepayers over the expected 1
useful life of the resource. The commission's determination of cost 2
is subject to all of the following: 3
(A) The commission shall deduct the projected value of any 4
federal tax incentives, carbon reduction credits, or production 5
credits that directly reduce the revenue requirement charged to 6
ratepayers. This sub-subparagraph applies only to a resource that 7
constitutes a dispatchable resource capable of providing firm 8
capacity during resource adequacy hours as determined by the 9
Midcontinent Independent System Operator or the applicable regional 10
transmission organization. As used in this sub-subparagraph, "firm 11
capacity" means capacity that is accredited to meet the utility's 12
planning reserve margin requirement during periods of highest loss 13
of load risk. 14
(B) For a resource that is not a dispatchable resource 15
described in sub-subparagraph (A), the commission shall add the 16
associated integration costs required to maintain system 17
reliability. The commission shall calculate associated integration 18
costs based on the cost of new entry for a comparable firm, 19
dispatchable resource required to provide equivalent reliability 20
services. As used in this sub-subparagraph, "associated integration 21
costs" includes, but is not limited to, the cost of firming 22
capacity, transmission upgrades, and ancillary services required to 23
manage resource intermittency. 24
(C) The determination of cost must exclude theoretical costs 25
based on social policy models, social costs of carbon not 26
established by state statute, or other imputed cost mechanisms that 27
do not reflect actual monetary costs incurred by the electric 28
utility. 29
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KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
(D) The commission shall base its determination on 1
transparent, consistent, and economically sound modeling 2
assumptions that reflect actual system needs, including the cost of 3
ensuring reliability during periods of peak demand and grid stress. 4
In evaluating projected costs, the commission shall give 5
appropriate weight to resources that provide dispatchable power and 6
contribute to long-term rate stability. 7
(iv) Reliability. In evaluating reliability, the commission 8
shall consider operational availability, dispatchability, fuel 9
security, and performance under a range of operating conditions. As 10
used in this subparagraph, "reliability" means the capacity of a 11
generation resource or portfolio to deliver uninterrupted 12
electricity to meet system demand, including during peak usage, 13
severe weather, or system stress. 14
(v) Commodity price risks. In evaluating commodity price 15
risks, the commission shall prioritize long-term rate stability for 16
customers. The commission shall conduct a sensitivity analysis that 17
complies with both of the following: 18
(A) Except as provided in sub-subparagraph (B), the commission 19
shall apply a risk premium to any generation resource dependent on 20
a fuel source that has demonstrated historical price volatility 21
exceeding 15% over any 5-year period in the preceding 20 years. 22
(B) The commission shall waive the volatility risk premium 23
required under sub-subparagraph (A) for a resource if both of the 24
following occur: 25
(I) The electric utility secures a long-term firm fuel 26
transportation contract or fixed-price fuel hedging instrument for 27
the resource for a period of not less than 5 years, the resource is 28
capable of maintaining a minimum of 18 months of on-site fuel 29
40
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
supply, or, for a natural gas resource, the electric utility has 1
access to firm underground storage capacity sufficient to maintain 2
continuous full-load output for a period of not less than 30 days. 3
(II) The commission determines that the projected total cost 4
of the firm fuel contract, hedging instrument, or storage agreement 5
is lower than the sum of the projected market cost of equivalent 6
spot market procurement and the volatility risk premium required 7
under sub-subparagraph (A). 8
(vi) Diversity of generation supply. In evaluating diversity of 9
generation supply, the commission shall consider whether the 10
proposed resource portfolio enhances overall system reliability, 11
affordability, and fuel security. The commission shall not favor or 12
disfavor any particular energy resource or technology solely on the 13
basis of environmental attributes or policy goals not established 14
by statute. A resource shall not be excluded from consideration for 15
purposes of diversity if it is cost-effective, dispatchable, or 16
contributes to grid stability. As used in this subparagraph, 17
"diversity of generation supply" means the inclusion of a balanced 18
mix of electricity generation resources utilizing different fuel 19
types, technologies, and operational characteristics for the 20
purpose of reducing reliance on any single energy source or supply 21
chain. 22
(vii) Whether the proposed levels of peak load reduction and 23
energy waste reduction are reasonable and cost-effective. In 24
evaluating whether the proposed levels of peak load reduction are 25
reasonable and cost-effective, the commission shall consider the 26
expected impact of those measures on system capacity needs, 27
resource adequacy, and overall electric system performance, the 28
total cost of implementing the measures compared to the avoided 29
41
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
costs of energy and capacity, and the effect of the measures on 1
customer bills and rate stability. As used in this subparagraph, 2
"cost-effective" means that the projected benefits of the proposed 3
measures exceed their total costs over the expected duration of the 4
program, and that the measures can be implemented in a manner that 5
does not compromise electric system reliability or materially 6
increase costs to ratepayers. 7
(viii) Affordability. In evaluating affordability, the 8
commission shall consider capital, fuel, operation and maintenance, 9
and decommissioning costs, levelized cost of energy or capacity, 10
projected impacts on customer bills and overall rate stability, and 11
long-term cost escalations, contingencies, and revenue 12
requirements. As used in this subparagraph, "affordability" means 13
the capacity of a generation resource or portfolio to deliver 14
electricity at a cost that minimizes the total financial burden on 15
ratepayers over the resource's expected operational life. 16
(ix) Overall cost-effectiveness in providing utility service. 17
(b) To the extent practicable, the construction or investment 18
in a new or existing capacity resource in this state is completed 19
using a workforce composed of residents of this state as determined 20
by the commission. This subdivision does not apply to a capacity 21
resource that is located in a county that lies on the border with 22
another state. 23
(c) The construction and construction maintenance of new or 24
the rehabilitation of existing capacity resources in this state 25
includes using an apprenticeship program registered and certified 26
with the United States Secretary of Labor under the national 27
apprenticeship act, 29 USC 50 to 50c, and the workers employed for 28
the construction or construction maintenance of the energy facility 29
42
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
are paid a minimum wage standard not less than the wage and fringe 1
benefit rates prevailing in the locality in which the work is to be 2
performed as determined under 2023 PA 10, MCL 408.1101 to 408.1126, 3
or 40 USC 3141 to 3148, whichever provides the higher wage and 4
fringe benefit rates, and, to the extent permitted by law, the 5
entities performing the construction or construction maintenance 6
work shall enter into a project labor agreement or operate under a 7
collective bargaining agreement for the work to be performed. This 8
subdivision does not apply to an independent power producer 9
supplying power under a contract or agreement entered into in 10
accordance with the public utility regulatory policies act of 1978, 11
Public Law 95-617, as of the effective date of the amendatory act 12
that added this subdivision. As used in this subdivision, "project 13
labor agreement" means a prehire collective bargaining agreement 14
with 1 or more labor organizations that establishes the terms and 15
conditions of employment for a specific construction project and 16
does all of the following: 17
(i) Binds all contractors and subcontractors on the 18
construction project through the inclusion of appropriate 19
specifications in all relevant solicitation provisions and contract 20
documents. 21
(ii) Allows all contractors and subcontractors on the 22
construction project to compete for contracts and subcontracts 23
without regard to whether they are otherwise parties to collective 24
bargaining agreements. 25
(iii) Contains guarantees against strikes, lockouts, and similar 26
job disruptions. 27
(iv) Sets forth effective, prompt, and mutually binding 28
procedures for resolving labor disputes arising during the term of 29
43
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
the project labor agreement. 1
(v) Provides other mechanisms for labor-management cooperation 2
on matters of mutual interest and concern, including productivity, 3
quality of work, safety, and health. 4
(vi) Complies with all state and federal laws, rules, and 5
regulations. 6
(c) (d) The plan is consistent with the renewable energy plan 7
requirements and goals of section 28 of the clean and renewable 8
energy and energy waste reduction act, 2008 PA 295, MCL 460.1028, 9
the clean energy requirements of section 51 of the clean and 10
renewable energy and energy waste reduction act, 2008 PA 295, MCL 11
460.1051, the energy waste reduction measures in section 77 of the 12
clean and renewable energy and energy waste reduction act, 2008 PA 13
295, MCL 460.1077, and the energy storage target of section 101 of 14
the clean and renewable energy and energy waste reduction act, 2008 15
PA 295, MCL 460.1101. 16
(e) The plan promotes environmental quality and public health 17
and reasonably mitigates adverse effects on human health due to 18
power generation, with a priority on mitigating impacts and 19
prioritizing benefits to communities disproportionately impacted by 20
pollution and other environmental harms. 21
(d) (f) The plan meets the requirements of subsection (5). 22
(9) If the commission denies a utility's integrated resource 23
plan, the utility, within not later than 60 days after the date of 24
the final order denying the integrated resource plan, may submit 25
revisions to the integrated resource plan to the commission for 26
approval. The commission shall commence a new contested case 27
hearing under chapter 4 of the administrative procedures act of 28
1969, 1969 PA 306, MCL 24.271 to 24.288. Not later than 90 days 29
44
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
after the date that the utility submits the revised integrated 1
resource plan to the commission under this subsection, the 2
commission shall issue an order approving or denying, with 3
recommendations, the revised integrated resource plan if the 4
revisions are not substantial or inconsistent with the original 5
integrated resource plan filed under this section. If the revisions 6
are substantial or inconsistent with the original integrated 7
resource plan, the commission has up to 150 days to issue an order 8
approving or denying, with recommendations, the revised integrated 9
resource plan. 10
(10) If the commission denies an electric utility's integrated 11
resource plan, the electric utility may proceed with a proposed 12
construction, purchase, investment, or power purchase agreement 13
contained in the integrated resource plan without the assurances 14
granted under this section. 15
(11) In approving an integrated resource plan under this 16
section, the commission shall specify the costs approved for the 17
construction of or significant investment in an electric generation 18
or energy storage facility, the purchase of an existing electric 19
generation or energy storage facility, the purchase of power under 20
the terms of the power purchase or energy storage agreement, or 21
other investments or resources used to meet energy and capacity 22
needs that are included in the approved integrated resource plan. 23
The costs for specifically identified investments, including the 24
costs for facilities under subsection (12), included in an approved 25
integrated resource plan that are commenced within 3 years after 26
the commission's order approving the initial plan, amended plan, or 27
plan review are considered reasonable and prudent for cost recovery 28
purposes. Any investment included in an approved integrated 29
45
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
resource plan that is directly related to the hardening or 1
modernization of the electric distribution or transmission system 2
to improve reliability and resilience is presumed to be reasonable 3
and prudent for cost recovery purposes if the actual costs incurred 4
are consistent with the approved plan or have been otherwise 5
approved by the commission. 6
(12) Except as otherwise provided in subsection (13), for a 7
new electric generation or energy storage facility approved in an 8
integrated resource plan that is to be owned by the electric 9
utility and that is commenced within 3 years after the commission's 10
order approving the plan, the commission shall finalize the 11
approved costs for the electric generation or energy storage 12
facility only after the utility has done all of the following and 13
filed the results, analysis, and recommendations with the 14
commission: 15
(a) Implemented a competitive bidding process for all major 16
engineering, procurement, and construction contracts associated 17
with the construction of the electric generation or energy storage 18
facility. 19
(b) Implemented a competitive bidding process that allows 20
third parties to submit firm and binding bids for the construction 21
of an electric generation or energy storage facility on behalf of 22
the utility that would meet all of the technical, commercial, and 23
other specifications required by the utility for the electric 24
generation or energy storage facility, such that ownership of the 25
electric generation or energy storage facility vests with the 26
utility no later than the date the electric generation or energy 27
storage facility becomes commercially available. 28
(c) Demonstrated to the commission that the finalized costs 29
46
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
for the new electric generation or energy storage facility are not 1
significantly higher than the initially approved costs under 2
subsection (11). If the finalized costs are found to be 3
significantly higher than the initially approved costs, the 4
commission shall review and approve the proposed costs if the 5
commission determines those costs are reasonable and prudent. 6
(13) If the capacity resource under subsection (12) is for the 7
construction of an electric generation facility of 225 megawatts or 8
more or for the construction of an additional generating unit or 9
units totaling 225 megawatts or more at an existing electric 10
generation facility, the utility shall submit an application to the 11
commission seeking a certificate of necessity under section 6s. 12
(14) An electric utility shall annually, or more frequently if 13
required by the commission, file reports to the commission 14
regarding the status of any projects included in the initial 3-year 15
period of an integrated resource plan approved under subsection 16
(7). 17
(15) If an electric provider whose rates are regulated by the 18
commission enters into a purchase power agreement for renewable 19
energy resources or a third-party contract for energy storage 20
systems or clean energy systems For power purchase agreements that 21
a utility enters into after April 20, 2017 with an entity that is 22
not affiliated with that utility, the commission shall authorize a 23
financial incentive for that utility calculated as the product of 24
contract payments in that year multiplied by the electric 25
provider's pretax weighted average cost of permanent capital 26
comprised of long-term debt obligations and equity of the electric 27
provider's total capital structure as determined by the 28
commission's final order in the electric provider's most recent 29
47
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
general rate case. The pretax weighted average cost of permanent 1
capital used to calculate the financial incentive must not be fixed 2
throughout the entire term of the contract at the pretax weighted 3
average cost of capital applicable in the first year and must be 4
updated based on the commission's final order in each succeeding 5
general rate case for the electric provider. The financial 6
incentive applies to each contract described in this subsection 7
from the date the contract is executed for the entire term of the 8
contract. This subsection applies to any contract entered into 9
after June 30, 2024. 10
(16) Notwithstanding any other provision of law, an order by 11
the commission approving an integrated resource plan may be 12
reviewed by the court of appeals upon on a filing by a party to the 13
commission proceeding within not later than 30 days after the order 14
is issued. All appeals of the order must be heard and determined as 15
expeditiously as possible with lawful precedence over other 16
matters. Review on appeal is based solely on the record before the 17
commission and briefs to the court and is limited to whether the 18
order conforms to the constitution and laws of this state and the 19
United States and is within the authority of the commission under 20
this act. 21
(17) The commission shall include in an electric utility's 22
retail rates all reasonable and prudent costs specified under 23
subsections (11) and (12) that have been incurred to implement an 24
integrated resource plan approved by the commission. The commission 25
shall not disallow recovery of costs an electric utility incurs in 26
implementing an approved integrated resource plan, if the costs do 27
not exceed the costs approved by the commission under subsections 28
(11) and (12). If the actual costs incurred by the electric utility 29
48
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
exceed the costs approved by the commission, the electric utility 1
has the burden of proving by a preponderance of the evidence that 2
the costs are reasonable and prudent. The portion of the cost of a 3
plant, facility, power purchase agreement, or other investment in a 4
resource that meets a demonstrated need for capacity that exceeds 5
the cost approved by the commission is presumed to have been 6
incurred due to a lack of prudence. The commission may include any 7
or all of the portion of the cost in excess of the cost approved by 8
the commission if the commission finds by a preponderance of the 9
evidence that the costs are reasonable and prudent. The commission 10
shall disallow costs the commission finds have been incurred as the 11
result of fraud, concealment, gross mismanagement, or lack of 12
quality controls amounting to gross mismanagement. The commission 13
shall also require refunds with interest to ratepayers of any of 14
these costs already recovered through the electric utility's rates 15
and charges. If the assumptions underlying an approved integrated 16
resource plan materially change, or if the commission believes it 17
is unlikely that a project or program will become commercially 18
operational, an electric utility may request, or the commission on 19
its own motion may initiate, a proceeding to review whether it is 20
reasonable and prudent to complete an unfinished project or program 21
included in an approved integrated resource plan. If the commission 22
finds that completion of the project or program is no longer 23
reasonable and prudent, the commission may modify or cancel 24
approval of the project or program and unincurred costs in the 25
electric utility's integrated resource plan. Except for costs the 26
commission finds an electric utility has incurred as the result of 27
fraud, concealment, gross mismanagement, or lack of quality 28
controls amounting to gross mismanagement, if commission approval 29
49
KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
is modified or canceled, the commission shall not disallow 1
reasonable and prudent costs already incurred or committed to by 2
contract by an electric utility. Once the commission finds that 3
completion of the project or program is no longer reasonable and 4
prudent, the commission may limit future cost recovery to those 5
costs that could not be reasonably avoided. 6
(18) The commission may allow financing interest cost recovery 7
in an electric utility's base rates on construction work in 8
progress for capital improvements approved under this section prior 9
to the assets' being considered used and useful. Regardless of 10
whether or not the commission authorizes base rate treatment for 11
construction work in progress financing interest expense, an 12
electric utility may recognize, accrue, and defer the allowance for 13
funds used during construction. 14
(19) An electric utility may seek to amend an approved 15
integrated resource plan. Except as otherwise provided under this 16
subsection, the commission shall consider the amendments under the 17
same process and standards that govern the review and approval of a 18
revised integrated resource plan under subsection (9). The 19
commission may order an electric utility that seeks to amend an 20
approved integrated resource plan under this subsection to file a 21
plan review under subsection (21). 22
(20) An electric utility shall file an application for review 23
of its integrated resource plan not later than 5 years after the 24
effective date of the most recent commission order approving a 25
plan, a plan amendment, or a plan review. The commission shall 26
consider a plan review under the same process and standards 27
established in this section for review and approval of an 28
integrated resource plan. A commission order approving a plan 29
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KHS H02431'25 a (H-1)_HB5710_APH_1 xwb8f4
review has the same effect as an order approving an integrated 1
resource plan. 2
(21) The commission may, on its own motion or at the request 3
of the electric utility, order an electric utility to file a plan 4
review. The department of environment, Great Lakes, and energy may 5
request the commission to order a plan review to address material 6
changes in environmental regulations and requirements that occur 7
after the commission's approval of an integrated resource plan. An 8
electric utility must file a plan review within not later than 270 9
days after the commission orders the utility to file a plan review. 10
(22) As used in this section, "long-term firm gas 11
transportation" means a binding agreement entered into between the 12
electric utility and a natural gas transmission provider for a set 13
period of time to provide firm delivery of natural gas to an 14
electric generation facility. 15
Enacting section 1. Section 6aa of 1939 PA 3, MCL 460.6aa, is 16
repealed. 17
Enacting section 2. This amendatory act does not take effect 18
unless House Bill No. 5711 of the 103rd Legislature is enacted into 19
law. 20