Order Michigan Supreme Court
Lansing, Michigan
May 1, 2009 Marilyn Kelly,
Chief Justice
136431 Michael F. Cavanagh
Elizabeth A. Weaver
Maura D. Corrigan
Robert P. Young, Jr.
ATTORNEY GENERAL OF THE Stephen J. Markman
STATE OF MICHIGAN, Diane M. Hathaway,
Appellant, Justices
v SC: 136431
COA: 261747
MPSC: U-013917
MICHIGAN PUBLIC SERVICE
COMMISSION, CONSUMERS ENERGY
COMPANY, ADRIAN ENERGY
ASSOCIATION, L.L.C., CADILLAC
RENEWABLE ENERGY, L.L.C.,
GENESEE POWER STATION, L.P.,
GRAYLING GENERATING STATION,
L.P., HILLMAN POWER COMPANY,
L.L.C., TES FILER CITY STATION,
L.P., VIKING ENERGY OF LINCOLN,
INC., VIKING ENERGY OF McBAIN,
INC., and MIDLAND COGENERATION
VENTURE, L.P.,
Appellees.
_________________________________________/
On order of the Court, leave to appeal having been granted and the briefs and oral
arguments of the parties having been considered by the Court, we AFFIRM the April 1,
2008 Court of Appeals judgment that “transmission costs” may be recovered through a
power supply cost recovery (PSCR) clause on different grounds. The Court of Appeals
followed the binding decision of In re Detroit Edison Application, 276 Mich App 216,
229 (2007), which held that “[p]ayments made by Edison for transmission costs . . . are
necessarily ‘transportation costs,’ and therefore are properly recoverable in a PSCR
clause.” See MCR 7.215(J)(1). Electric utilities can recover two types of power supply
costs through a PSCR clause: (1) “booked costs, including transportation costs,
reclamation costs, and disposal and reprocessing costs, of fuel burned by the utility for
electric generation;” or (2) “booked costs of purchased and net interchanged power
transactions.” MCL 460.6j(1)(a). The Court of Appeals interpretation does not give any
meaning to the limitation that the “transportation costs” must be those “of fuel burned by
2
the utility for electric generation.” (Emphasis added). However, the second clause,
“booked costs of purchased and net interchanged power transactions,” is a technical
phrase that has acquired a “peculiar and appropriate” meaning in the regulation of electric
utilities to include “transmission costs” charged by third-parties. MCL 8.3a; see In re
Wisconsin Electric Power Company, unpublished opinion and order of the Public Service
Commission, issued September 16, 2002 (Case No. U-12725) at 16. Accordingly, it
“shall be construed and understood according to such peculiar and appropriate meaning,”
MCL 8.3a, and the PSC did not err in permitting Consumers Energy Company to
recover transmission costs through its PSCR clause. The Court of Appeals affirmance of
the PSC decision is thus affirmed on this alternate ground.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
May 1, 2009 _________________________________________
0428 Clerk