Utility Performance Rules Coming

December 20, 2002
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LANSING — The Michigan Public Service Commission will hold a public hearing soon to consider proposed new service quality and reliability standards for electric providers.

The proposed new rules, which apply to all electric utilities under the MPSC’s jurisdiction, include standards for service outage restoration, distribution facility upgrades, repairs and maintenance, telephone service, billing service, operational reliability, and public and worker safety.

The hearing is to be held Jan. 8 in Lansing.

The rules stem from passage of the Customer Choice and Reliability Act (Public Act 141 of 2000), which restructured the electric utility industry and opened the state’s electric generation market to competition on Jan. 1 this year.

Section 10p(5) of the act required the MPSC to adopt service quality and reliability standards for the transmission and distribution systems of electric utilities. No such standards have been in place before.

The rules’ proposed effective date is April 1.

The rules define “unacceptable levels of performance” under both normal and catastrophic conditions and set time limits in which service must be restored to at least 90 percent of customers experiencing interruptions.

Proposed rules also require electric utilities to complete 90 percent or more of new service installations within 15 business days and to maintain:

  • An average customer call answer time of less than 90 seconds.

  • A call blockage factor (percentage of calls that do not get answered) of 5 percent or less.

  • A complaint response factor of 90 percent or more within three business days.

  • A meter reading factor of 85 percent or more within the approved period.

The rules also impose deadlines for filing annual reports, which must include all data relating to the performance factors described above.

Beyond that, the utilities’ annual reports must include the number and total dollar amount of all customer credits provided during the year, broken down by customer class.

Under the proposed rules, the MPSC would impose penalties upon utilities that fail to restore service within a specified period of time and for repetitive interruptions of the same circuit. 

The commission would also be authorized to award financial incentives to electric utilities that exceed all quality and reliability standards.

The proposed rules do not specify what form or amount the “financial incentives” might take.

MPSC’s spokeswoman, Mary Jo Kunkle, said further commission action would likely be needed to put an incentive mechanism in place.

Kunkle said she hasn’t heard of any opposition to the rules as yet.

“Typically we do not get written comments well in advance of the filing deadline. In virtually every instance where we have sought public comment, the information comes to us very, very close to the deadline.”

The commission is indicating that the proposed standards and performance levels should be achievable for electrical utilities under its jurisdiction, Kunkle said.   

“We don’t know yet what the interested parties might say about the feasibility. Sometimes that is an issue in terms of whether companies feel they are able to achieve those or not.

“There’s a possibility, depending on the comments that are received, that there could be some revisions.”

Penalty provisions call for electric utilities to provide a credit on a customer’s next bill if it fails to restore service within 16 hours or if a customer experiences more than seven interruptions in a 12-month period.

The billing credit would be $25 or the customer’s monthly consumer charge, whichever is greater.

Jim Bishop, spokesman with Consumers Energy’s Jackson office, said Consumers supports performance standards in general.

“We think the important thing is to ensure that reasonable performance standards are adopted. We’re very pleased that the commission is seeking input from a number of parties, including electric utilities, in terms of what those standards might ultimately be.”

He said the standards, as proposed, properly focus on customers and on the quality of service and that Consumers thinks that’s the right emphasis.

“But we don’t have a lot of detailed comment right now in terms of what the final standards should look like,” he said.

Bishop said Consumers plans to be a full and active participant in the MPSC proceedings. 

James Ault, president of the Michigan Electric and Gas Association (MEGA), may make a presentation at the hearing.

MEGA’s membership consists of 11 electric and gas companies or, as Ault puts it, “the rest of the state after Consumers and Edison.”

Ault said the proposed rules came out of a less formal process that’s been going on for a couple years.

Electric companies have actually been measuring performance under standards that the MPSC put in place on a kind of trial basis, he said.

He noted that nearly a year’s worth of data has been collected.

Among electric utilities, he said, the main issue with the proposed rules seems to be the penalty provisions.

“From the feedback I’ve received so far, it’s not so much the rules that are a problem; it’s the use of an automatic penalty mechanism for customer credits that really complicates things.

“There’s a general feeling that service performance hasn’t been a problem with most utilities; nobody seems to have any real problem with measuring it or tracking it and trying to achieve it.”

Ault said when customers experience an outage, what they want is their service back more than some kind of customer credit penalty mechanism.

With the bigger outages that are usually caused by storms and various other weather conditions, the goal is to have people focused on getting service back, he said, adding that utilities generally share crews to do what they can to help out.

That system has worked fairly well over the years, Ault said.

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