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SB-0213, As Passed Senate, June 27, 2008

SUBSTITUTE FOR

SENATE BILL NO. 213

A bill to require providers of retail electric service to

establish a renewable energy program; to prescribe the powers and

duties of certain state agencies and officials; to authorize the

creation and implementation of wind energy resource zones; to

ensure transmission infrastructure to deliver wind energy; to

provide for expedited transmission line siting authority; to

provide incentives for establishing wind generation facilities; to

provide for condemnation authority; and to provide for sanctions.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 1. GENERAL PROVISIONS

Sec. 1. (1) This act shall be known and may be cited as the

"clean, renewable, and efficient energy act".

(2) The purpose of this act is to promote the development of

clean energy, renewable energy, and energy efficiency through the

implementation of a clean, renewable, and energy efficient

portfolio standard that will cost effectively do all of the

following:

(a) Diversify the resources used to reliably meet the energy

needs of consumers in the state.

(b) Provide greater energy security through the use of

indigenous energy resources available within the state.

energy efficiency.

(d) Provide improved air quality and other benefits to energy

consumers and citizens of the state.

PART 2. INTEGRATED RENEWABLE ENERGY PORTFOLIO STANDARD

Sec. 3. As used in this part:

(a) "Applicable regional transmission organization" means a

nonprofit, member-based organization governed by an independent

board of directors that serves as the federal energy regulatory

commission-approved regional transmission organization with

oversight responsibility for the region that includes the

provider's service territory

(b) "Biomass" means any organic matter that is not derived

from fossil fuels, that can be converted to usable fuel for the

production of energy, and that replenishes over a human, not a

geological, time frame, including, but not limited to, all of the

following:

(i) Agricultural crops and crop wastes.

(ii) Short-rotation energy crops.

(iii) Herbaceous plants.

(iv) Trees and wood, but only if derived from sustainably

managed forests or procurement systems, as defined in section 261c

of the management and budget act, 1984 PA 431, MCL 18.1261c.

(v) Paper and pulp products.

(vi) Precommercial wood thinning waste, brush, or yard waste.

(vii) Wood wastes and residues from the processing of wood

products or paper.

(viii) Animal wastes.

(ix) Wastewater sludge or sewage.

(x) Aquatic plants.

(xi) Food production and processing waste.

(xii) Organic by-products from the production of biofuels.

credit that is acquired under 1 of the following circumstances:

(i) By an electric utility or alternative electric supplier in

conjunction with a trade, purchase, or other transfer of renewable

energy.

(ii) By an electric utility by the generation of renewable

energy.

(d) "Cleaner energy" means electricity generated using a

cleaner energy system.

(e) "Cleaner energy system" means both of the following:

(i) An IGCC facility.

(ii) Other technologies for generating electricity as approved

by the commission by rule based on standards established by the

commission in consultation with the departments of natural

resources and environmental quality, to ensure that the

technologies reduce or produce no carbon emissions, are reliable

and cost effective, comply with applicable federal and state

environmental and natural resource laws, do not harm the public

health, safety, and welfare, and do not reduce property values.

(f) "Commission" means the Michigan public service commission.

(g) "Customer meter" means an electric meter of a provider's

retail customer. Customer meter does not include a municipal water

pumping meter or additional meters at a single site that were

installed specifically to support interruptible air conditioning,

interruptible water heating, net metering, or time-of-day tariffs.

(h) "Energy optimization" means energy efficiency, load

management, and conservation.

(i) "IGCC facility" means an integrated gasification combined

cycle plant located in this state that produces synthetic or

methanized synthetic gas from carbon-based feedstock, including,

but not limited to, coal, petroleum coke, wood, biomass, and other

agricultural products, and uses that synthetic gas to generate

electricity for commercial use. An IGCC facility includes the

transmission lines and facilities, gas transportation lines and

facilities, and associated property and equipment employed

specifically to serve that facility.

(j) "Incremental costs of compliance" means the net revenue

required by a provider to comply with the integrated renewable

energy portfolio standard, calculated as provided under section

27(2).

(k) "Industrial cogeneration" means the generation of

electricity using industrial thermal energy.

(l) "Industrial thermal energy" means thermal energy that is a

by-product of an industrial or manufacturing process and that would

otherwise be wasted. For the purposes of this subdivision,

industrial or manufacturing process does not include the generation

of electricity.

(m) "Integrated renewable energy portfolio" means the

percentage determined under section 13.

(n) "Integrated renewable energy portfolio plan" or "plan"

means a plan approved under section 7 or 9.

(o) "Integrated renewable energy portfolio standard" means the

minimum renewable energy portfolio required to be achieved under

section 13.

(p) "Load management" means measures or programs that target

equipment or devices to result in decreased peak electricity demand

or shift demand from peak to off-peak periods.

(q) "Provider", subject to sections 7(1) and 9(1), means any

of the following:

(i) Any person or entity that is regulated by the commission

for the purpose of selling electricity to retail customers in this

state.

(ii) A municipally owned electric utility in this state.

(iii) A cooperative electric utility in this state.

(iv) An alternative electric supplier licensed in this state.

(r) "PURPA" means the public utility regulatory policies act

of 1978, Public Law 95-617.

(s) "Qualifying cogeneration facility" means that term as

defined in 16 USC 824a-3.

(t) "Qualifying small power production facility" means that

term as defined in 16 USC 824a-3.

Sec. 5. As used in this part:

(a) "Renewable energy" means electricity generated using a

renewable energy system.

(b) "Renewable energy contract" means a contract to acquire

renewable energy and the associated bundled renewable energy

credits from 1 or more renewable energy systems.

this act that represents generated renewable energy.

(d) "Renewable energy resource" means a resource that

naturally replenishes over a human, not a geological, time frame

and that is ultimately derived from solar power, water power, or

wind power. Renewable energy resource does not include petroleum,

nuclear, natural gas, or coal. A renewable energy resource comes

from the sun or from thermal inertia of the earth and minimizes the

output of toxic material in the conversion of the energy and

includes, but is not limited to, all of the following:

(i) Biomass.

(ii) Solar and solar thermal energy.

(iii) Wind energy.

(iv) Kinetic energy of moving water, including all of the

following:

(A) Waves, tides, or currents.

(B) Water released through a dam.

extent that the water was pumped into the storage facility using

Senate Bill No. 213 as amended June 27, 2008

renewable energy.

(v) Geothermal energy.

(vi) Municipal solid waste, including, but not limited to,

landfilled municipal solid waste that produces landfill gas.

(e) "Renewable energy system" means a facility, electricity

generation system, or integrated set of electricity generation

systems that use 1 or more renewable energy resources to generate

electricity. Renewable energy system does not include any of the

following:

(i) A hydroelectric facility that uses a dam constructed after

the effective date of this act unless the dam is a repair or

replacement of a dam in existence on the effective date of this act

or an upgrade of a dam in existence on the effective date of this

act that increases its energy efficiency.

(ii) An incinerator unless the incinerator is a municipal solid

waste incinerator as defined in section 11504 of the natural

resources and environmental protection act, 1994 PA 451, MCL

324.11504, and <<(1)>> was brought into service before the effective date

of this act, including any subsequent upgrade of such an

incinerator that increases energy efficiency <<or (2) is an expansion

of an incerator to an approximate continuous design rated capacity of not more than 950 tons per day pursuant to the terms of a final request for proposals requested not later than October 1, 1986.>>

(f) "Revenue recovery mechanism" means the mechanism for

recovery of incremental costs of compliance established under

section 7(4).

(g) "Unbundled renewable energy credit" means a renewable

energy credit that is acquired by trade, purchase, or other

transfer without acquiring the renewable energy for the generation

of which the renewable energy credit was issued.

Sec. 7. (1) This section applies to providers whose rates are

regulated by the commission.

(2) Within 90 days after the commission issues a temporary

order under section 37, each provider shall file a proposed

integrated renewable energy portfolio plan with the commission. The

proposed plan shall meet all of the following requirements:

(a) Describe how the provider will meet the integrated

renewable energy portfolio standards as determined under this act.

(b) Specify whether the number of megawatt hours of

electricity used in the calculation of the integrated renewable

energy portfolio will be weather-normalized or based on a 3-year

running average. Once the plan is approved by the commission, this

option shall not be changed.

the integrated renewable portfolio standard for the duration of the

time that the plan is approved by the commission.

(d) For a provider that is an electric utility with 1,000,000

or more retail customers in this state as of January 1, 2008,

describe the bidding process to be used by the provider under

section 17. The description shall include measures to be employed

in the preparation of requests for proposals and the handling and

evaluation of proposals received to ensure that any bidder that is

an affiliate of the electric utility is not afforded a competitive

advantage over any other bidder and that each bidder, including any

bidder that is an affiliate of the provider, is treated in a fair

and nondiscriminatory manner.

(3) The commission shall conduct a contested case hearing on

the proposed plan filed under subsection (2), pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328. If a renewable energy generator files a petition to

intervene in the contested case in the manner prescribed by the

commission's rules for interventions generally, the commission

shall grant the petition. After the hearing and within 90 days

after the proposed plan is filed with the commission, the

commission shall approve, with any changes consented to by the

provider, or reject the plan. A provider shall not begin recovery

of the incremental costs of compliance within its rates until the

commission has approved its proposed plan.

(4) The plan, as approved by the commission, shall establish a

nonvolumetric mechanism for the recovery of the incremental costs

of compliance within the provider's customer rates. The revenue

recovery mechanism shall not result in rate impacts that exceed the

monthly maximum retail rate impacts specified under section 13. A

customer participating in a commission-approved voluntary renewable

energy program under an agreement in effect on the effective date

of this act shall not incur charges under the revenue recovery

mechanism unless the charges under the revenue recovery mechanism

exceed the charges the customer is incurring for the voluntary

renewable energy program. In that case, the customer shall only

incur the incremental difference between the charge assessed under

the revenue recovery mechanism and the charges the customer is

incurring for the voluntary renewable energy program. The

limitation on charges applies only during the term of the

agreement, not including automatic agreement renewals, or until 1

year after the effective date of this act, whichever is later.

Before entering an agreement with a customer to participate in a

commission-approved voluntary renewable energy program and before

the last automatic monthly renewal of such an agreement that will

occur less than 1 year after the effective date of this act, a

provider shall notify the customer that the customer will be

responsible for the full applicable charges under the revenue

recovery mechanism as well as under the voluntary renewable energy

program as provided under this subsection.

(5) If proposed by the provider in its proposed plan, the

revenue recovery mechanism shall result in an accumulation of

reserve funds in advance of expenditure and the creation of a

regulatory liability that accrues interest at the average short-

term borrowing rate available to the provider during the

appropriate period. If proposed by the provider in its proposed

plan, the commission shall establish a minimum balance of

accumulated reserve funds for the purposes of section 27(4).

(6) A revenue recovery mechanism is subject to adjustment

under sections 27(4) and 29.

(7) Every 2 years after initial approval of a plan under

subsection (3), the commission shall review the plan. The

commission shall conduct a contested case hearing on the plan

pursuant to the administrative procedures act of 1969, 1969 PA 306,

MCL 24.201 to 24.328. Any interested party may intervene in the

contested case as provided in subsection (3). The annual renewable

cost reconciliation under section 29 for that year may be joined

with the overall plan review in the same contested case hearing.

After the hearing, the commission shall approve, with any changes

consented to by the provider, or reject any proposed amendments to

the plan.

(8) If a provider proposes to amend its plan at a time other

than during the biennial review process under subsection (7), the

provider shall file the proposed amendment with the commission. If

the proposed amendment would modify the revenue recovery mechanism,

the commission shall conduct a contested case hearing on the

amendment pursuant to the administrative procedures act of 1969,

1969 PA 306, MCL 24.201 to 24.328. Any interested party may

intervene in the contested case as generally provided in the rules

of the commission. The annual renewable cost reconciliation under

section 29 may be joined with the plan amendment in the same

contested case proceeding. After the hearing and within 90 days

after the amendment is filed, the commission shall approve, with

any changes consented to by the provider, or reject the amendment.

Sec. 9. (1) This section applies only to providers whose rates

are not regulated by the commission.

(2) Within 90 days after the commission issues a temporary

order under section 37, each provider shall file a proposed

integrated renewable energy portfolio plan with the commission. The

proposed plan shall meet all of the following requirements:

(a) Describe how the provider will meet the integrated

renewable energy portfolio standards.

(b) Specify whether the number of megawatt hours of

electricity used in the calculation of the renewable energy

portfolio will be weather-normalized or based on a 3-year running

average. Once the plan is approved by the commission, this option

shall not be changed.

(3) The commission shall provide an opportunity for public

comment on the proposed plan filed under subsection (2). However,

the commission need not provide an opportunity for public comment

if the provider is a municipally owned electric utility and the

governing body of the provider has already provided an opportunity

for public comment and filed the comments with the commission along

with the plan. After the applicable opportunity for public comment

and within 90 days after the proposed plan is filed with the

commission, the commission shall approve, with any changes

consented to by the provider, or reject the plan. The provider

shall not begin recovery of the incremental costs of compliance

within its rates until the commission has approved its proposed

plan. However, if the provider is a municipally owned electric

utility, the provider may begin recovery of the incremental costs

of compliance upon approval of its proposed plan by the governing

body of the municipally owned electric utility.

(4) Every 2 years after initial approval of a plan under

subsection (3), the commission shall review the plan. The

commission shall provide an opportunity for public comment on the

plan. However, the commission need not provide an opportunity for

public comment if the provider is a municipally owned electric

utility and the governing body of the provider has already provided

an opportunity for public comment and filed the comments with the

commission. After the applicable opportunity for public comment,

the commission shall approve, with any changes consented to by the

provider, or reject any proposed amendments to the plan.

(5) If a provider proposes to amend its plan at a time other

than during the biennial review process under subsection (4), the

provider shall file the proposed amendment with the commission. The

commission shall provide an opportunity for public comment on the

amendment. However, the commission need not provide an opportunity

for public comment if the provider is a municipally owned electric

utility and the governing body of the provider has already provided

an opportunity for public comment and filed the comments with the

commission. After the opportunity for public comment and within 90

days after the amendment is filed, the commission shall approve,

with any changes consented to by the provider, or reject the

amendment.

Sec. 11. The commission shall ensure that integrated renewable

energy portfolio plans submitted by providers serving customers in

the same distribution territory do not create an unfair competitive

advantage for any of those providers.

Sec. 13. (1) Subject to section 15, each provider shall meet

the following integrated renewable energy portfolio standard

calculated as provided under subsection (4):

(a) Not less than 2% of the total number of kilowatt hours of

electricity sold by the provider to its retail customers in this

state for the 2011 calendar year.

(b) Not less than 4% of the total number of kilowatt hours of

electricity sold by the provider to its retail customers in this

state for the 2012 calendar year.

electricity sold by the provider to its retail customers in this

state for the 2014 calendar year.

(d) Not less than 7% of the total number of kilowatt hours of

electricity sold by the provider to its retail customers in this

state for the 2015 calendar year and succeeding years.

(2) If a provider's integrated renewable energy portfolio in

any period specified in subsection (1) exceeds the integrated

renewable energy portfolio standard for that period, the excess may

be carried forward and credited to a subsequent period.

(3) Each provider shall meet the integrated renewable energy

portfolio standard by 1 or more of the following means:

(a) Generating electricity from renewable energy systems for

sale to retail customers in this state.

(b) Purchasing or otherwise acquiring unbundled renewable

energy credits if, subject to section 17, the renewable energy

system that generated the electricity for which the renewable

energy credit was issued is located within the geographic boundary

of the applicable regional transmission organization.

section 17, 1 or more of the following requirements are met:

(i) The renewable energy system that generated the electricity

for which each renewable energy credit was issued is located in the

United States and within the geographic boundary of the applicable

regional transmission organization.

(ii) The electricity for which each renewable energy credit was

issued is delivered to the applicable regional transmission

organization, to the transmission system of an electric utility, or

to another delivery point designated by an electric utility for the

purpose of subsequent delivery to the electric utility.

(d) Energy optimization under part 3. However, a provider

shall not meet more than 30% of the requirements of subsection (1)

through the means authorized under this subdivision.

(e) Generating or acquiring electricity from cleaner energy

systems for sale to retail customers in this state. However, a

provider shall not use more than 20% of the electricity generated

or acquired from clean energy systems for sale to retail customers

in this state to meet the energy portfolio standard authorized

under this subdivision.

(f) Acquiring electricity generated by net metering customers

subject to section 10dd of 1939 PA 3, MCL 460.10dd.

(g) Making alternative compliance payments under section 20.

(4) A provider's integrated renewable energy portfolio shall

be calculated as follows:

(a) Add all of the following:

(i) The number of renewable energy credits used to comply with

this act during that year.

(ii) The number of megawatt hours of electricity generated or

acquired by the provider from cleaner energy systems during that

year.

(iii) The number of megawatt hours of demand reduction through

energy optimization under part 3.

(iv) The number of megawatt hours of electricity acquired from

net metering customers by the provider during that year.

(v) The number of megawatt hours represented by alternative

compliance payments.

(b) Divide the sum under subdivision (a) by 1 of the following

at the option of the provider as specified in its integrated

renewable energy portfolio plan:

(i) The number of weather-normalized megawatt hours of

electricity sold by the provider during the previous year to retail

customers in this state.

(ii) The average number of megawatt hours of electricity sold

by the provider annually during the previous 3 years to retail

customers in this state.

(5) Each provider shall annually file a report with the

commission regarding the status of the provider in meeting the

integrated renewable energy portfolio standard established under

this section.

(6) Beginning in 2010, the commission shall annually evaluate

the state renewable energy purchasing requirements under section

257 of the management and budget act, 1984 PA 431, MCL 18.1257,

including, but not limited to, the cost of purchasing renewable

energy compared to energy from a new coal-fired power plant. In

determining costs, the commission shall consider and quantify the

transmission costs and capacity reliability of both renewable

energy and electricity generated by a new coal-fired facility.

(7) A provider shall recover the incremental cost of

compliance with the integrated renewable energy portfolio standard

by an itemized charge on the customer's bill for billing periods

beginning more than 90 days after commission approval of the

provider's integrated renewable energy portfolio plan under section

7 or 9. In its billing statement for a residential customer

covering the end of a calendar year or as an insert to that billing

statement, each provider shall report to the residential customer

the sum of the charges imposed on the customer during that year

under this part and part 3 and advise that the sum of such charges

paid by the residential customer is eligible for a state income tax

credit. A provider shall not comply with the integrated renewable

portfolio standard to the extent that, as determined by the

commission, recovery of the incremental cost of compliance and

capacity reliability and transmission costs quantified under

subsection (6) pursuant to the integrated renewable energy

portfolio plan, subject to annual revision, will have a retail rate

impact that exceeds any of the following:

(a) $2.00 per month per residential customer meter.

(b) $11.05 per month per commercial secondary customer meter.

customer meter.

(8) The incremental cost of compliance shall be calculated for

a 20-year period beginning with approval of the integrated

renewable energy portfolio plan and shall be recovered on a

levelized basis.

Sec. 15. (1) Upon petition by a provider, the commission may

for good cause grant 2 extensions of renewable energy portfolio

standard deadlines under section 13. Each extension shall be for up

to 1 year. Good cause includes, but is not limited to, the

provider's inability, as determined by the commission, to meet the

renewable energy portfolio standard because of a renewable energy

system feasibility limitation including, but not limited to, any of

the following:

(a) Renewable energy system site requirements, zoning, siting,

land use issues, permits, including environmental permits, any

certificate of need process under section 6r of 1939 PA 3, MCL

460.6r, or any other necessary governmental approvals that

effectively limit availability of renewable energy systems, if the

provider exercised reasonable diligence in attempting to secure the

necessary governmental approvals. For purposes of this subdivision,

"reasonable diligence" includes, but is not limited to, submitting

timely applications for the necessary governmental approvals and

making good faith efforts to ensure that the applications are

administratively complete and technically sufficient.

(b) Equipment cost or availability issues including electrical

equipment or renewable energy system component shortages or high

costs that effectively limit availability of renewable energy

systems.

transmission and interconnection.

(d) Projected or actual unfavorable electric system

reliability or operational impacts.

(e) Labor shortages that effectively limit availability of

renewable energy systems.

(2) If 2 extensions of the 2015 renewable energy portfolio

standard deadline have been granted under subsection (1), upon

subsequent petition by a provider at least 3 months before the

expiration of the second extended deadline, the provider shall be

considered to be in compliance with this act at an integrated

renewable energy portfolio standard determined by the commission to

be attainable by that provider.

(3) Any provider that makes a good faith effort to spend the

full amount of incremental costs of compliance as outlined in its

approved integrated renewable energy portfolio plan, subject to any

approved extensions or revisions, shall be considered to be in

compliance with this act.

Sec. 16. (1) Renewable energy credits may be traded, sold, or

otherwise transferred.

(2) Renewable energy credits that are not used by a provider

to comply with an integrated renewable portfolio standard in a

calendar year may be banked and carried forward indefinitely for

the purpose of complying with an integrated renewable energy

portfolio standard in a subsequent year. For the purpose of

complying with an integrated renewable portfolio standard in any

calendar year, both of the following apply:

(a) Banked unbundled renewable energy credits shall be used,

up to the limit imposed by section 16a, before other renewable

energy credits are used.

(b) Banked renewable energy credits with the oldest issuance

date shall be used to comply with the standard before banked

renewable energy credits with more recent issuance dates are used.

(3) A provider is responsible for demonstrating that a

renewable energy credit used to comply with an integrated renewable

energy portfolio standard is derived from a renewable energy source

and that the provider has not previously used, traded, sold, or

otherwise transferred the renewable energy credit.

(4) The same renewable energy credit may be used by a provider

to comply with both a federal renewable portfolio standard and an

integrated renewable energy portfolio standard established under

this act. A provider that uses a renewable energy credit to comply

with a renewable portfolio standard imposed by any other state

shall not use the same renewable energy credit to comply with an

integrated renewable portfolio standard established under this act.

Sec. 16a. (1) Except as provided in this section, unbundled

renewable energy credits, including banked unbundled renewable

energy credits, may not be used to meet more than 20% of the

requirements of the integrated renewable portfolio standard for any

year.

(2) The limitation imposed by subsection (1) does not apply to

renewable energy credits issued for electricity generated in this

state by a net metering facility, or another generating facility

that is not directly connected to a distribution or transmission

system.

(3) The limitation imposed by subsection (1) does not apply to

any of the following:

(a) Renewable energy credits issued for electricity generated

in this state.

(b) Renewable energy credits used by an alternative electric

supplier.

Sec. 17. (1) Subject to subsection (2), a provider that is an

electric utility with 1,000,000 or more retail customers in this

state as of January 1, 2008 shall obtain the renewable energy

credits that are necessary to meet the renewable portfolio standard

under section 13(b) and (c) as follows:

(a) At the provider's option, up to but no more than 50% of

such renewable energy credits shall be from any of the following:

(i) Renewable energy systems that were developed by and are

owned by the provider. A provider shall competitively bid any

contract for engineering, procurement, or construction of any new

renewable energy systems described in this subdivision.

(ii) Renewable energy systems that were developed by 1 or more

third parties pursuant to a contract with the provider under which

the ownership of the renewable energy system may be transferred to

the provider, but not before the renewable energy system begins

commercial operation. A transfer of ownership resulting from such a

contract does not count toward the new renewable energy systems

ownership limit under subparagraph (i). Any such contract shall be

executed after a competitive bidding process conducted pursuant to

guidelines issued by the commission. An affiliate of the provider

may submit a proposal in response to a request for proposals,

subject to the code of conduct under section 10a(4) of 1939 PA 3,

MCL 460.10a, and the sanctions for violation thereof under section

10c of 1939 PA 3, MCL 460.10c.

(b) At least 50% of such renewable energy credits shall be

from renewable energy contracts that do not require transfer of

ownership of the applicable renewable energy system to the provider

or from contracts for the purchase of renewable energy credits

alone. A renewable energy contract or contract for the purchase of

renewable energy credits under this subdivision shall be executed

after a competitive bidding process conducted pursuant to

guidelines issued by the commission. An affiliate of the provider

may submit a proposal in response to a request for proposals,

subject to the code of conduct under section 10a(4) of 1939 PA 3,

MCL 460.10a, and the sanctions for violation thereof under section

10c of 1939 PA 3, MCL 460.10c. Ownership of renewable energy

systems by affiliates of the provider resulting from renewable

energy contracts executed under this subdivision do not count

toward the provider's new renewable energy systems ownership limit

under subdivision (a). If a provider selects a bid other than the

least price conforming bid from a qualified bidder, the provider

shall promptly notify the commission. The commission shall

determine under section 21 whether the provider had good cause for

selecting that bid. If the commission determines that the provider

did not have good cause, the commission shall disapprove the

contract.

(2) Subsection (1) does not apply to either of the following:

(a) Renewable energy credits that are transferred to the

provider pursuant to section 19(4).

(b) Renewable energy credits that are produced or obtained by

the provider from renewable energy systems for which recovery in

electric rates was approved as of the effective date of this act,

including renewable energy credits resulting from biomass co-firing

of, or use of industrial thermal energy in, electric generation

facilities in existence on the effective date of this act, except

to the extent the number of megawatt hours of electricity annually

generated by biomass co-firing or industrial thermal energy exceeds

the number of megawatt hours generated during the 1-year period

immediately preceding the effective date of this act.

(3) For purposes of subsection (1), the method of procuring

the renewable energy credits generated from a renewable energy

system that uses water released from a pumped storage facility

shall be considered to be the method of procuring the renewable

energy used to pump the water into the facility.

(4) A provider may submit a contract entered into pursuant to

subsection (1) to the commission for review and approval. If the

commission approves the contract, it shall be considered to be

consistent with the provider's renewable energy portfolio plan.

Sec. 19. (1) The locational requirements of section 13 do not

apply if 1 or more of the following requirements are met:

(a) The renewable energy system is a wind turbine or wind farm

and the electricity generated from the wind, or the renewable

energy credits associated with that electricity, is being purchased

under a contract in effect on January 1, 2008. If electricity and

associated renewable energy credits purchased under such a contract

are used by a provider to meet renewable energy portfolio

requirements established after January 1, 2008 by the legislature

of the state in which the wind turbine or wind farm is located, the

provider may, for the purpose of meeting the renewable energy

portfolio standard under this act, obtain, by any means authorized

under section 13, up to the same number of replacement renewable

energy credits from any other wind farm or wind farms located in

that state.

(b) The renewable energy system is a wind turbine or wind farm

that was under construction or operational and owned by a provider

on January 1, 2008.

the wind turbines meets the requirements of subsection (1), and the

remaining wind turbines are within 15 miles of a wind turbine that

is part of that wind farm and that meets the requirements of

subsection (1).

(d) Before January 1, 2008, a provider that serves not more

than 75,000 retail electric customers in this state filed an

application for a certificate of authority for the renewable energy

system with a state regulatory commission in another state that is

also served by that provider. However, renewable energy credits

shall not be granted for electricity generated using more than 10.0

megawatts of nameplate capacity of the renewable energy system.

(e) Electricity generated from the renewable energy system is

sold by a not-for-profit entity located in Indiana or Wisconsin to

a municipally owned electric utility in this state or cooperative

electric utility in this state under a contract in effect on

January 1, 2008, and the electricity is not being used to meet

another state's portfolio standard for renewable energy.

(f) Electricity generated from the renewable energy system is

sold by a not-for-profit entity located in Ohio to a municipally

owned electric utility in this state under a contract approved by

resolution of the governing body of the municipally owned electric

utility by January 1, 2008, and the electricity is not being used

to meet another state's portfolio standard for renewable energy.

However, renewable energy credits shall not be granted for

electricity generated using more than 13.4 megawatts of nameplate

capacity of the renewable energy system.

(2) If a provider obtains renewable energy for resale to

retail or wholesale customers under an agreement under PURPA,

ownership of the associated renewable energy credits shall be as

provided by the PURPA agreement. If the PURPA agreement does not

provide for ownership of the renewable energy credits, then:

(a) Except to the extent that a separate agreement governs

under subdivision (b), for the duration of the PURPA agreement, for

every 5 renewable energy credits associated with the renewable

energy, ownership of 4 of the renewable energy credits shall be

considered to be transferred to the provider with the renewable

energy, and ownership of 1 renewable energy credit shall be

considered to remain with the qualifying cogeneration facility or

qualifying small power production facility.

(b) If a separate agreement in effect on January 1, 2008

provides for the ownership of the renewable attributes of the

generated electricity, the separate agreement shall govern until

January 1, 2013 or until expiration of the separate agreement,

whichever occurs first.

(3) If an investor-owned electric utility with less than

20,000 customers, a municipally owned electric utility, or

cooperative electric utility obtains all or substantially all of

its electricity for resale under a power purchase agreement or

agreements in existence on the effective date of this act,

ownership of any associated renewable energy credits shall be

considered to be transferred to the provider purchasing the

electricity. The number of renewable energy credits associated with

the purchased electricity shall be determined by multiplying the

total number of renewable energy credits associated with the total

power supply of the seller during the term of the agreement by a

fraction, the numerator of which is the amount of energy purchased

under the agreement or agreements and the denominator of which is

the total power supply of the seller during the term of the

agreement. This subsection does not apply unless 1 or more of the

following occur:

(a) The seller and the provider purchasing the electricity

agree that this subsection applies.

(b) For a seller that is an independent investor-owned

electric utility whose retail electric rates are regulated by the

commission, the commission reduces the number of renewable energy

credits required under the renewable energy portfolio standard for

the seller by the number of renewable energy credits to be

transferred to the provider purchasing the electricity under this

subsection.

Sec. 21. If, after the effective date of this act, a provider

whose rates are regulated by the commission enters a renewable

energy contract or a contract to purchase unbundled renewable

energy credits, the commission shall determine whether the contract

provides reasonable terms and conditions that will ensure a

favorable economic outcome for the provider and its customers and

comply with the retail rate impact limits under section 13. In

making this determination, the commission shall consider the

contract price and term. If the contract is a renewable energy

contract, the commission shall also consider at least all of the

following:

(a) The cost to the provider and its customers of the impacts

of accounting treatment of debt and associated equity requirements

imputed by credit rating agencies and lenders attributable to the

renewable energy contract. The commission shall use standard rating

agency, lender, and accounting practices for electric utilities in

determining these costs, unless the impacts for the provider are

known.

(b) The life-cycle cost of the renewable energy contract to

the provider and customers including costs, after expiration of the

renewable energy contract, of maintaining the same renewable energy

output in megawatt hours, whether by purchases from the

marketplace, by extension or renewal of the renewable energy

contract, or by the provider purchasing the renewable energy system

and continuing its operation.

renewable energy systems supporting the renewable energy contract

move from contracted pricing to market-based pricing after

expiration of the renewable energy contract.

Sec. 23. (1) The commission shall establish a renewable energy

credit certification and tracking program or rely upon the use of

the existing GATS tracking and certification systems of the

regional transmission organizations whose boundaries include

territory in this state. The certification and tracking program may

be contracted to and performed by a third party through a system of

competitive bidding. The renewable energy credit certification and

tracking program shall include all of the following:

(a) A process to certify renewable energy systems, including

all existing renewable energy systems operating on the effective

date of this act, as eligible to receive renewable energy credits.

(b) Certification that the operator of a renewable energy

system is in compliance with state and federal law applicable to

the operation of the renewable energy system when certification is

granted. If a renewable energy system becomes noncompliant with

state or federal law, renewable energy credits shall not be granted

for renewable energy generated by that renewable energy system

during the period of noncompliance.

(d) Determining the date that a renewable energy credit is

valid for transfer under this act.

(e) A method for ensuring that each renewable energy credit

traded and sold under this act is properly accounted for under this

act.

(f) If the system is established by the commission, allowance

for issuance, transfer, and use of renewable energy credits in

electronic form.

(2) A renewable energy credit purchased from a renewable

energy system in this state is not required to be used in this

state.

(3) Except as otherwise provided in section 19(2), 1 renewable

energy credit shall be granted to the owner of a renewable energy

system for each megawatt hour of electricity generated from the

renewable energy system, subject to all of the following:

(a) If a renewable energy system uses both a renewable energy

resource and a nonrenewable energy resource to generate

electricity, the number of renewable energy credits granted shall

be based on the percentage of the electricity generated from the

renewable energy resource.

(b) Renewable energy credits shall not be granted for

renewable energy generated from a municipal solid waste incinerator

to the extent that the renewable energy was generated by operating

the incinerator in excess of its boilerplate capacity rating

effective on January 1, 2008.

generation of renewable energy, such as wind energy, used to pump

water into a pumped storage facility or to fill other energy

storage facilities, but shall be granted for renewable energy

generated upon release from a pumped storage facility or other

energy storage facility. However, the number of renewable energy

credits shall be calculated based on the number of megawatt hours

of renewable energy used to fill the pumped storage facility or

other energy storage facility, not the number of megawatt hours

actually generated by discharge from the energy storage facility.

(d) Renewable energy credits shall not be granted for

renewable energy whose renewable attributes are used by a provider

in a commission-approved voluntary renewable energy program.

(4) Subject to subsection (3), the following additional

renewable energy credits, to be known as Michigan incentive

renewable energy credits, shall be granted under the following

circumstances:

(a) 2 renewable energy credits for each megawatt hour of

electricity from solar power.

(b) 1/5 renewable energy credit for each megawatt hour of

electricity generated from a renewable energy system, other than

wind, at peak demand time as determined by the commission.

electricity generated from a renewable energy system during off-

peak hours, stored using advanced electric storage technology, and

used during peak hours.

(d) 1/10 renewable energy credit for each megawatt hour of

electricity generated from a renewable energy system constructed

using equipment made in this state as determined by the commission.

The additional credit under this subdivision is available for the

first 3 years after the renewable energy system first produces

electricity on a commercial basis.

(e) 1/10 renewable energy credit for each megawatt hour of

electricity from a renewable energy system constructed using a

workforce composed of residents of this state as determined by the

commission. The additional credit under this subdivision is

available for the first 3 years after the renewable energy system

first produces electricity on a commercial basis.

(5) A renewable energy credit expires when used by a provider

to comply with its renewable energy portfolio standard. A renewable

energy credit associated with the generation of electricity within

120 days after the start of a calendar year may be used to satisfy

the prior year's renewable energy portfolio standard and expires

when so used.

Sec. 24. (1) The commission shall establish an alternative

compliance rate for each compliance year for each provider that is

subject to an integrated renewable portfolio standard. The rate

shall be expressed in dollars per megawatt hour.

(2) The commission shall establish an alternative compliance

rate based on the cost of qualifying electricity, contracts that

the provider has acquired for future delivery of qualifying

electricity, and the number of unbundled renewable energy credits

that the provider anticipates using in the compliance year to meet

the integrated renewable portfolio standard applicable to the

provider. In establishing an alternative compliance rate, the

commission shall set the rate to provide adequate incentive for the

provider to purchase or generate qualifying electricity in lieu of

using alternative compliance payments to meet the integrated

renewable energy portfolio standard applicable to the provider.

(3) A provider may make voluntary alternative compliance

payments to comply with the integrated renewable portfolio standard

applicable to the provider. Voluntary alternative compliance

payments shall be recovered in the rates of the provider, subject

to the retail rate impact limits in section 13.

(4) Each provider shall deposit any amounts recovered in the

rates of the provider for alternative compliance payments in a

holding account established by the provider. Amounts in the holding

account shall accrue interest at the rate of return authorized by

the commission for the provider. This subsection and subsection (5)

do not apply to an alternative electric supplier.

(5) Amounts in holding accounts established under subsection

(4) may be expended by a provider only for costs of acquiring new

generating capacity from renewable energy sources, investments in

efficiency upgrades to electricity generating facilities owned by

the provider, and energy optimization programs within the

provider's service area. The commission must approve expenditures

by a provider from a holding account established under subsection

(4).

(6) The commission shall require alternative electric

suppliers to establish holding accounts and make payments to those

accounts on a substantially similar basis as provided for electric

utilities. The commission must approve expenditures by an

alternative electric supplier from a holding account established

under this subsection. The commission may approve expenditures only

for energy conservation programs for customers of the alternative

electric supplier.

(7) The commission shall establish initial alternative

compliance rates as required by this section no later than July 1,

2009.

Sec. 25. (1) If a provider whose rates are regulated by the

commission fails to meet the renewable energy portfolio standard by

the applicable deadline under section 13, subject to section 15,

both of the following apply:

(a) The provider shall purchase sufficient renewable energy

credits necessary to meet the integrated renewable energy standard

or make mandatory alternative compliance payments at the rate

established under section 24 to meet the integrated renewable

energy portfolio standard.

(b) The provider shall not recover from its ratepayers the

cost of purchasing renewable energy credits or making mandatory

alternative compliance payments under subdivision (a) if the

commission finds that the provider did not make a good faith effort

to meet the goals of section 13, subject to section 15.

(2) The attorney general or any customer of a municipally

owned electric utility or a cooperative electric utility that has

elected to become member-regulated under the electric cooperative

member-regulation act may commence a civil action for injunctive

relief against a municipally owned electric utility or such a

cooperative electric utility if the provider fails to meet the

applicable requirements of this act.

(3) An action under subsection (2) shall be commenced in the

circuit court for the circuit in which the principal office of the

provider is located. An action shall not be filed under subsection

(2) unless the prospective plaintiff has given the prospective

defendant and the commission at least 60 days' written notice of

the prospective plaintiff's intent to sue, the basis for the suit,

and the relief sought. Within 30 days after the prospective

defendant receives written notice of the prospective plaintiff's

intent to sue, the prospective defendant and plaintiff shall meet

and make a good faith attempt to determine if there is a credible

basis for the action. If both parties agree that there is a

credible basis for the action, the prospective defendant shall take

all reasonable steps necessary to comply with applicable

requirements of this act within 90 days of the meeting.

(4) In issuing a final order in an action brought under

subsection (2), the court may award costs of litigation, including

reasonable attorney and expert witness fees, to the prevailing or

substantially prevailing party.

(5) Upon a complaint of an alternative electric supplier's

customer or on the commission's own motion, the commission may

conduct a contested case to review allegations that the alternative

electric supplier has violated this act, including an order issued

or rule promulgated under this act. If the commission finds, after

notice and hearing, that an alternative electric supplier has

violated this act, the commission shall do 1 or more of the

following:

(a) Revoke the license of the alternative electric supplier.

(b) Issue a cease and desist order.

fine of not less than $5,000.00 or more than $50,000.00 for each

violation.

Sec. 26. For a provider whose rates are regulated by the

commission, the commission shall determine the appropriate charges

for the provider's tariffs that permit recovery of the incremental

cost of compliance subject to the retail rate impact limits set

forth in section 13.

Sec. 27. (1) Notwithstanding any other provision of law, the

commission shall consider all actual costs reasonably and prudently

incurred in good faith to implement a commission-approved

integrated renewable energy portfolio plan by a provider whose

rates are regulated by the commission to be a cost of service to be

recovered by the provider, whether or not those costs are

incremental costs of compliance. Notwithstanding any other

provision of law, a provider whose rates are regulated by the

commission shall recover through its retail electric rates all of

the provider's incremental costs of compliance and all reasonable

and prudent ongoing costs of compliance, subject to the retail rate

impact limits in section 13. The recovery shall include, but is not

limited to, the provider's authorized rate of return on equity,

which shall remain fixed at the rate of return and debt to equity

ratio that was in effect in a provider's base rates when the

provider's renewable energy portfolio plan was approved. The costs

of purchasing renewable energy credits or alternative compliance

payments may not be recovered under this subdivision if recovery is

not allowed under section 25.

(2) Incremental costs of compliance shall be calculated as

follows:

(a) Determine the sum of the following costs to the extent

those costs are reasonable and prudent and not already approved for

recovery in electric rates as of the effective date of this act:

(i) Capital, operating, and maintenance costs of renewable

energy systems, cleaner energy systems, and energy optimization,

including property taxes, insurance, and return on equity

associated with a provider's renewable energy systems, cleaner

energy systems, and energy optimization, including the provider's

integrated renewable energy portfolio initially established to

achieve compliance with the integrated renewable energy portfolio

standard and any additional renewable energy systems, cleaner

energy systems, and energy optimization that are built, acquired,

or implemented by the provider to maintain compliance with the

renewable energy portfolio standard beginning when the provider's

plan is approved by the commission.

(ii) Financing costs attributable to capital, operating, and

maintenance costs of capital facilities associated with renewable

energy systems, cleaner energy systems, and energy optimization.

(iii) Transmission, interconnection, and substation costs

associated with renewable energy systems, cleaner energy systems,

and energy optimization.

(iv) Except to the extent the costs are allocated under a

different subparagraph, all of the following:

(A) The costs of renewable energy credits purchased or

alternative compliance payments under this act other than those for

which a provider is denied recovery under section 25.

(B) The costs of contracts described in section 17(2).

(v) Expenses incurred as a result of state or federal

governmental actions related to renewable energy systems, cleaner

energy systems, or energy optimization, including, but not limited

to, changes in tax or other law.

(vi) Any additional provider costs considered relevant by the

commission.

(b) Subtract from the sum of costs not already included in

electric rates determined under subdivision (a) the sum of the

following revenues:

(i) Revenue derived from the sale of environmental attributes

associated with the generation of renewable energy or cleaner

energy. Such revenue shall not be considered in determining power

supply cost recovery factors under section 6j of 1939 PA 3, MCL

460.6j.

(ii) Interest on regulatory liabilities.

(iii) Tax credits specifically designed to promote renewable

energy systems, cleaner energy systems, or energy optimization.

(iv) Revenue derived from the provision of renewable energy or

cleaner energy to retail electric customers subject to a power

supply cost recovery clause under section 6j of 1939 PA 3, MCL

460.6j, of a provider whose retail electric rates are regulated by

the commission. Beginning in 2008, after providing an opportunity

for a contested case hearing for a provider whose rates are

regulated by the commission, the commission shall annually

establish a price per megawatt hour. In addition, a provider whose

retail electric rates are regulated by the commission may at any

time petition the commission to revise the price. In setting the

price per megawatt hour under this subparagraph, the commission

shall consider factors including, but not limited to, projected

capacity, energy, maintenance, and operating costs; information

filed under section 6j of 1939 PA 3, MCL 460.6j; and information

from wholesale markets, including, but not limited to, locational

marginal pricing. This price shall be multiplied by the number of

megawatt hours of renewable energy. The resulting value shall be

considered a booked cost of purchased and net interchanged power

transactions under section 6j of 1939 PA 3, MCL 460.6j. For energy

purchased by such a provider under a renewable energy agreement,

the price shall be the lower of the amount established by the

commission or the actual price paid and shall be multiplied by the

number of megawatt hours of renewable energy purchased. The

resulting value shall be considered a booked cost of purchased and

net interchanged power under section 6j of 1939 PA 3, MCL 460.6j.

(v) Revenue from wholesale renewable energy or cleaner energy

sales. Such revenue shall not be considered in determining power

supply cost recovery factors under section 6j of 1939 PA 3, MCL

460.6j.

(vi) Any additional provider revenue considered relevant by the

commission.

(3) The commission shall authorize a provider whose rates are

regulated by the commission to spend in any given month more to

comply with this act and implement an approved integrated renewable

energy portfolio plan than the revenue actually generated by the

revenue recovery mechanism. A provider whose rates are regulated by

the commission shall recover its commission approved pre-tax rate

of return on regulatory assets during the appropriate period. A

provider whose rates are regulated by the commission shall record

interest on regulatory liabilities at the average short-term

borrowing rate available to the provider during the appropriate

period. Any regulatory assets or liabilities resulting from the

recovery of renewable energy or cleaner energy costs through the

power supply cost recovery clause under section 6j of 1939 PA 3,

MCL 460.6j, shall continue to be reconciled under that section.

(4) If a provider's incremental costs of compliance in any

given month are in excess of the revenue recovery mechanism as

adjusted under section 29 and in excess of the balance of any

accumulated reserve funds, subject to the minimum balance

established under section 7(5), the provider shall immediately

notify the commission. The commission shall promptly commence a

contested case hearing pursuant to the administrative procedures

act of 1969, 1969 PA 306, MCL 24.201 to 24.328, and modify the

revenue recovery mechanism so that the minimum balance is restored.

(5) If a provider whose rates are regulated by the commission

has a regulatory liability, the refund to customer classes shall be

proportional to the amounts paid by those customer classes under

the revenue recovery mechanism.

Sec. 29. (1) This section applies only to a provider whose

rates are regulated by the commission. Concurrent with the

submission of each report under section 33, the commission shall

commence an annual proceeding, to be known as a renewable cost

reconciliation, for each provider whose rates are regulated by the

commission. The renewable cost reconciliation proceeding shall be

conducted as a contested case pursuant to the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

Reasonable discovery shall be permitted before and during the

reconciliation proceeding to assist in obtaining evidence

concerning reconciliation issues including, but not limited to, the

reasonableness and prudence of expenditures and the amounts

collected pursuant to the revenue recovery mechanism.

(2) At the renewable cost reconciliation, a provider may

propose any necessary modifications of the revenue recovery

mechanism to ensure the provider's recovery of its incremental cost

of compliance with the integrated renewable portfolio standard.

(3) The commission shall reconcile the pertinent revenues

recorded and the allowance for the nonvolumetric revenue recovery

mechanism with the amounts actually expensed and projected

according to the provider's plan for compliance. The commission

shall consider any issue regarding the reasonableness and prudence

of expenses for which customers were charged in the relevant

reconciliation period. In its order, the commission shall do all of

the following:

(a) Make a determination of a provider's compliance with the

renewable energy portfolio standard, subject to section 15.

(b) Adjust the revenue recovery mechanism for the incremental

costs of compliance. The commission shall ensure that the retail

rate impacts under this renewable cost reconciliation revenue

recovery mechanism do not exceed the maximum retail rate impacts

specified under section 13. The commission shall ensure that the

recovery mechanism is projected to maintain a minimum balance of

accumulated reserve so that a regulatory asset does not accrue.

and cleaner energy capacity and for renewable energy and cleaner

energy to be recovered through the power supply cost recovery

clause under section 6j of 1939 PA 3, MCL 460.6j, as outlined in

section 27(2)(b)(iv).

(d) Adjust, if needed, the minimum balance of accumulated

reserve funds established under section 7(5).

(4) If a provider has recorded a regulatory liability in any

given month, interest on the regulatory liability balance shall be

accrued at the average short-term borrowing rate available to the

provider during the appropriate period, and shall be used to fund

incremental costs of compliance incurred in subsequent periods.

Sec. 33. (1) By a time determined by the commission, each

provider shall submit to the commission an annual report that

provides information relating to the actions taken by the provider

to comply with the integrated renewable energy portfolio standard.

By that same time, a municipally owned electric utility shall

submit a copy of the report to the governing body of the

municipally owned electric utility, and a cooperative electric

utility shall submit a copy of the report to its board of

directors.

(2) Each annual report under subsection (1) shall include all

of the following information:

(a) The amount of electricity and renewable energy credits

that the provider generated or acquired from renewable energy

systems during the reporting period and the amount of renewable

energy credits that the provider acquired, sold, or traded during

the reporting period.

(b) The amount of electricity that the provider generated or

acquired from cleaner energy systems during the reporting period.

energy system owned, operated, or controlled by the provider, the

total amount of electricity generated by each renewable energy

system or cleaner energy system during the reporting period, and

the percentage of that total amount of electricity from each

renewable energy system that was generated directly from renewable

energy.

(d) Whether, during the reporting period, the provider began

construction on, acquired, or placed into operation a renewable

energy system or cleaner energy system.

(e) Expenditures made in the past year and anticipated future

expenditures to comply with this part and part 3.

(f) Any other information that the commission determines

necessary.

(3) Concurrent with the submission of each report under

subsection (1), a municipally owned electric utility shall submit a

summary of the report to its customers in their bills with a bill

insert and to its governing body. Concurrent with the submission of

each report under subsection (1), a cooperative electric utility

shall submit a summary of the report to its members in a periodical

issued by an association of rural electric cooperatives and to its

board of directors. A municipally owned electric utility or

cooperative electric provider shall make a copy of the report

available at its office and shall post a copy of the report on its

website. A summary under this section shall indicate that a copy of

the report is available at the office or website.

(4) The commission shall monitor reports submitted under

subsection (1) and ensure that actions taken under this act by

providers serving customers in the same distribution territory do

not create an unfair competitive advantage for any of those

providers.

(5) Biennially, the commission shall submit to the legislature

a report that does all of the following:

(a) Summarizes data collected under this section.

(b) Discusses the status of renewable energy and cleaner

energy in this state and the effect of this part and part 3 on

electricity prices.

at retail in this state, specifies the difference between the cost

of the renewable energy and the cost of electricity generated from

conventional sources.

(d) Provides a comparison of the cost effectiveness of the

methods of an electric utility with 1,000,000 or more retail

customers in this state as of January 1, 2008 obtaining renewable

energy credits under the options described in section 13.

(e) Discuss how the commission is fulfilling the requirements

of subsection (4).

(6) Not later than 1 year after the effective date of the

amendatory act that added this section, the commission shall report

to the legislature on the potential rate impacts on all classes of

customers if providers whose rates are regulated by the commission

decouple rates. The commission's report shall review whether

decoupling would be cost effective and would reduce the overall

consumption of fossil fuels in this state.

Sec. 35. (1) A person may file commercially or financially

sensitive information or trade secrets with the commission or a

third party contractor under this act, confidentially. To be filed

confidentially, the information shall be accompanied by an

affidavit that sets forth both the reasons for the confidentiality

and a public synopsis of the information.

(2) Information filed confidentially is exempt from the

Senate Bill No. 213 as amended June 27, 2008

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246, and

shall remain confidential, except under the terms of a mandatory

protective order. If information is disclosed under a mandatory

protective order, then the commission may use the information for

the purpose for which it is required, but the information shall

remain confidential.

(3) There is a rebuttable presumption that any information

filed confidentially under subsection (1) is commercially or

financially sensitive information or trade secrets entitled to

protection under subsection (1).

Sec. 37. (1) Within 60 days after the effective date of this

act, the commission shall issue a temporary order implementing this

act, including, but not limited to, all of the following:

(a) Formats of integrated renewable energy portfolio plans for

various categories of providers.

(b) Guidelines for requests for proposals under this act.

(2) Within 1 year after the effective date of this act, the

commission shall promulgate rules to implement this act pursuant to

the administrative procedures act of 1969, 1969 PA 306, MCL 24.201

to 24.328.

Sec. 39. (1) If, on or before January 1, 2008, <<~~an alternative~~

~~electric supplier~~ a merchant plant>> entered into a contract with an

initial term of

20 years or more to sell electricity to a provider whose rates are

regulated by the commission with 1,000,000 or more retail customers

in this state and if the <<~~alternative electric supplier~~ merchant

plant>> generated

electricity under that contract, in whole or in part, from a

renewable energy resource, wood, wood wastes, or landfill gas, then

Senate Bill No. 213 as amended June 27, 2008

the <<~~alternative electric supplier~~ merchant plant>> <<~~may~~ shall>>

recover the amount, if any,

by which the <<~~alternative electric supplier's~~ merchant plant's>> actual

<<and reasonably incurred>> fuel and

variable operation and maintenance costs exceed the amount that the

alternative electric supplier is paid under the contract for those

costs.

(2) The commission shall issue orders to permit the recovery

authorized under subsection (1) through the power supply cost

recovery process of the provider whose rates are regulated by the

commission upon petition of the <<~~alternative electric supplier~~

merchant plant>>. The

<<~~alternative electric supplier~~ merchant plant>> shall not be required

to alter or

amend the existing contract with the electric utility in order to

obtain the recovery under subsection (1). The commission shall

permit or require the provider whose rates are regulated by the

commission to recover from its ratepayers fuel and variable

operation and maintenance costs under the contract as reasonably

and prudently incurred costs.

Sec. 40. (1) This act does not provide the commission with new

authority with respect to municipally owned electric utilities

except to the extent explicitly provided in this act.

(2) Notwithstanding any other provision of this part,

electricity or natural gas used in the operation or testing of any

environmental control equipment authorized, permitted, or required

by this state, any federal agency, or any court order is exempt

from the requirements of, and calculations of compliance required

under, this part.

PART 3. ENERGY OPTIMIZATION

Sec. 41. As used in this part:

(a) "Commission" means that term as defined in section 3.

(b) "Electric provider" means a provider as defined in section

section 3.

(d) "Integrated renewable energy portfolio plan" means that

term as defined in section 3.

(e) "Load management" means that term as defined in section 3.

(f) "Natural gas provider" means an investor-owned business

engaged in the sale and distribution of natural gas within this

state whose rates are regulated by the commission.

(g) "Provider" means an electric provider or a natural gas

provider.

Sec. 42. (1) Within 90 days after the commission enters a

temporary order under section 37, each provider shall file a

proposed energy optimization plan with the commission. For an

electric provider, the proposed energy optimization plan shall be

prepared and subject to approval as a subpart of the integrated

renewable energy portfolio plan. For a natural gas provider, the

proposed energy optimization plan shall be subject to approval in

the same manner as an electric provider's integrated renewable

energy portfolio plan under part 2.

(2) An energy optimization plan may utilize energy efficiency,

load management, and conservation programs.

(3) An energy optimization plan may utilize educational

programs designed to alter consumer behavior or any other measures

that can reasonably be used to meet the goals set forth in section

43.

(4) A provider may, as a part of an energy optimization plan

filing, propose to the commission measures designed to meet the

goals set forth in section 43, which provide additional customer

benefits.

(5) An energy optimization plan shall provide for the

practical and effective administration of the proposed energy

optimization programs. The commission shall allow providers

flexibility in designing their energy optimization programs and

administrative approach. A provider's energy optimization programs

may be administered, at the provider's option, by the provider,

alone or jointly with other providers, by a state agency, or by an

appropriate experienced nonprofit organization selected after a

competitive bid process.

Sec. 43. The overall goal of an energy optimization plan shall

be to reduce the future costs of provider service to customers. In

particular, energy optimization plans shall be designed to protect

consumers from the higher costs that would follow the construction

of new electric generating plants, by delaying the need for their

construction.

Sec. 44. (1) A provider's energy optimization plan shall be

filed, reviewed, and approved or rejected by the commission as part

of the same procedures that apply to the integrated renewable

energy portfolio plan.

(2) The commission shall not approve an integrated renewable

energy portfolio plan unless the commission determines that the

energy optimization plan is reasonable. In determining whether the

energy optimization plan is reasonable, the commission shall review

each element and consider whether it would reduce the future cost

of service for the provider's customers. In addition, the

commission shall consider at least all of the following:

(a) The specific changes in customers' consumption patterns

that the proposed energy optimization plan is attempting to

influence.

(b) The cost and benefit analysis and other justification for

specific programs and measures included in a public utility's

proposed energy optimization plan.

consistent with any long-range integrated resource plan filed by

the public utility with the commission.

(d) Whether the proposed energy optimization plan will result

in any unreasonable prejudice or disadvantage to any class of

customers.

(e) The extent to which the plan provides programs that are

available, affordable, and useful to all customers.

Sec. 45. A provider may request and the commission may

approve, as a part of an energy optimization plan, the payment of a

financial incentive to the provider designed to commensurately

reward the provider for positive performance. However, the total

amount of a financial incentive shall not exceed 50% of the net

cost reductions enjoyed by the provider's customers as a result of

implementation of the energy optimization plan.

Sec. 46. (1) The incremental costs of a provider's energy

optimization programs include both of the following:

(a) The full costs incurred pursuant to the provider's energy

optimization plan.

(b) Revenues that represent contributions to the provider's

fixed costs that were lost because of the implementation of the

energy optimization plan.

(2) The incremental costs of a provider's energy optimization

programs, including, but not limited to, costs under section 47,

shall be quantified on a per meter basis and included in the

incremental costs of compliance subject to the retail rate impact

limits in section 13.

(3) The commission shall assign and charge for the costs of

various energy optimization educational programs only to the class

or classes of customers that benefit from those programs.

Sec. 47. (1) Sections 42 to 45 do not apply to a provider that

pays the following minimum percentage of total utility sales

revenues, including electricity or natural gas commodity costs,

each year to an independent energy efficiency program administrator

selected by the commission:

(a) In 2009, 0.75% of total utility sales revenues for 2007.

(b) In 2010, 1.0% of total utility sales revenues for 2008.

(d) In 2012 and each year thereafter, 2.0% of total utility

sales revenues for the preceding year.

(2) Money received from a provider by the energy efficiency

program administrator under subsection (1) shall be used to

administer energy efficiency programs for the provider. Money

unspent in any given year shall be carried forward to be spent in

the subsequent year.

(3) The commission shall allow a provider that complies with

subsection (1) to recover the amount of money transferred. This

cost shall be recovered from residential customers by volumetric

charges, from all other metered customers by per-meter charges, and

from unmetered customers by an appropriate charge, applied to

utility bills.

(4) Money paid by a provider to the energy efficiency program

administrator under subsection (1) shall only be used to fund

energy efficiency programs in that provider's service territory. To

the extent feasible, charges collected from a particular customer

rate class and paid to the energy efficiency program administrator

under subsection (1) shall be devoted to energy efficiency programs

and services for that rate class. The energy efficiency program

administrator shall report to the commission the demand reduction

achieved for the provider through energy optimization for the

purpose of calculating the integrated renewable energy portfolio

under section 13.

(5) Money paid to the energy efficiency program administrator

and not spent by the administrator that year shall remain available

for expenditure the following year, subject to the requirements of

subsection (4).

(6) The commission shall select a qualified nonprofit

organization to serve as energy efficiency program administrator

under this section, through a competitive bid process.

(7) The commission shall arrange for a biennial independent

audit of the energy efficiency program administrator.

Senate Bill No. 213 as amended June 27, 2008

Sec. 48. <<~~Upon petition of a natural gas provider whose rates~~

~~are regulated by the commission~~(1) A natural gas utility regulated by

the commission shall be allowed to decouple rates for residential and small commercial customers by implementing, at the election of the utility, 1 of the following decoupling options:

(a) A single per customer class fixed monthly service charge to recover the revenue requirement authorized in its most recent base rate case in place of the customer charges and volumetric distribution charges for those classes.

(b) A symmetrical volumetric decoupling mechanism to recover from or return to customers the difference between the monthly revenue requirements authorized in its most recent base rate case to the actual revenue recovered from each customer class. The overrecovery or underrecovery shall be collected from or returned to customers in the second month following the overcollection or undercollection.

(2) On an annual basis, a natural gas utility using either decoupling mechanism described in subsection (1) shall implement a true-up mechanism in a manner determined by commission order to adjust for variable costs incurred by the utility that are above or below the costs used to determine the revenue requirement authorized in its most recent base rate case>>, the commission shall authorize the

natural gas provider to decouple rates, regardless of whether,

under section 43, the natural gas provider's energy optimization

programs are administered by the provider, a state agency, or a

nonprofit organization.

PART 4. STATE GOVERNMENT ENERGY EFFICIENCY AND CONSERVATION

Sec. 51. As used in this part:

(a) "Commission" means the Michigan public service commission.

(b) "Load management" means that term as defined in section 3.

Sec. 53. (1) The energy office in the department of labor and

economic growth shall do all of the following:

(a) Assist the department of management and budget in

conducting energy audits to improve the energy performance of

facilities owned or leased by the state and implementing the

recommendations of the audits if the recommendations will save

money. If building or facility modifications are allowed under the

terms of a lease, the state shall undertake any recommendations

resulting from an energy audit to those facilities if the

recommendations will save money. The energy audits shall be

conducted by December 31, 2009 and every 5 years thereafter. Any

money saved by the energy audits shall be deposited into the energy

conservation fund created in subsection (5).

(b) Assist the department of management and budget in

examining the cost and benefit of using LEED building code

standards when constructing or remodeling a state building.

state leases a building in examining the cost and benefit of

leasing a building that meets LEED building codes standards. This

subsection does not apply if there are no such buildings available

that meet the state's functional or physical needs, or if the state

is already leasing a building that has historical, architectural,

or cultural significance that could be harmed by a lease not being

renewed solely based on the building's failure to meet LEED

criteria.

(d) Assist each state department in appointing an energy

manager to work with the energy office and that department to

reduce state energy use.

(e) Assist the department of management and budget in ensuring

that, during any renovation or construction of a state building,

energy efficient products are used whenever possible and that the

state purchases energy efficient products whenever possible.

(f) Assist the department of management and budget in

implementing a program to educate state employees on how to

conserve energy. The energy office and the department of management

and budget shall update the program every 3 years.

(g) Assist the commission and the department of management and

budget in using more cost-effective lighting technologies,

geothermal heat pumps, and other cost-effective technologies to

conserve energy.

(h) By March 31, 2010, assist the department of management and

budget in reducing the state's energy use during peak summer energy

use seasons with the goal of achieving reductions beginning in

2010.

(i) Assist the department of management and budget in creating

a web-based system for tracking energy efficiency and energy

conservation projects occurring within state government.

(j) With the commission, review and increase efforts to

provide customers information on energy efficiency and

conservation, particularly residential customers. By December 31,

2009, the energy office shall prepare a report to the legislature

on what steps have been taken to increase awareness of energy

efficiency and energy conservation methods.

(2) The commission shall do all of the following:

(a) Undertake activities to increase public awareness of load

management techniques. As used in this subdivision, "load

management" means measures or programs that target equipment or

devices to result in decreased peak electricity demand or shift

demand from peak to off-peak periods.

(b) Engage in regional efforts to reduce the demand for energy

whenever possible.

reduce demand and conserve energy through load management

techniques and other activities it considers appropriate. The

commission shall file a report with the legislature by December 31,

2010 on the effort to reduce demand. The report shall also include

any recommendations for legislative action the commission considers

necessary.

(3) It is the goal of this state to reduce energy use in this

state by 5% by 2015. It shall be the goal of state government to

reduce energy use by state government by 20% by 2015. By April 1,

2010 and every 2 years thereafter, the commission shall report to

the legislature on the progress being made toward these goals.

(4) By October 1, 2010, the commission shall report to the

legislature any recommendations for legislative action to increase

energy conservation and efficiency based on the energy optimization

plans approved under section 44 and the commission's own

investigation. By March 1, 2013, the commission shall report to the

legislature how electric suppliers have progressed with

implementing the reductions in energy use. The commission may use

an independent evaluator to review the submissions by electric

suppliers.

(5) The energy conservation fund is created within the state

treasury. The state treasurer may receive money or other assets

from any source for deposit into the fund. The state treasurer

shall direct the investment of the fund. The state treasurer shall

credit to the fund interest and earnings from fund investments.

Money in the fund at the close of the fiscal year shall remain in

the fund and shall not lapse to the general fund. The department of

labor and economic growth shall be the administrator of the fund

for auditing purposes. The commission shall expend money from the

fund, upon appropriation, to fund energy efficiency and

conservation efforts. The auditor general shall audit the energy

conservation fund by December 31, 2013.

PART 5. WIND ENERGY RESOURCE ZONES

Sec. 61. As used in this part:

(a) "Affiliated transmission company" means a person,

partnership, corporation, association, or other legal entity, or

its successors or assigns, which has fully satisfied the

requirements to join a regional transmission organization as

determined by the federal energy regulatory commission, is engaged

in this state in the transmission of electricity using facilities

it owns that were transferred to the entity by an electric utility

that was engaged in the generation, transmission, and distribution

of electricity in this state on December 31, 2000, and is not

independent of an electric utility or an affiliate of the utility,

generating or distributing electricity to retail customers in this

state.

(b) "Applicable regional transmission organization" means a

nonprofit, member-based organization governed by an independent

board of directors that serves as the regional transmission

organization with oversight responsibility for the region that

includes the electric utility's, affiliated transmission company's,

or independent transmission company's service territory.

section 63.

(d) "Commission" means the Michigan public service commission.

(e) "Electric utility" means a person, partnership,

corporation, association, or other legal entity whose transmission

or distribution of electricity the commission regulates under 1909

PA 106, MCL 460.551 to 460.559, or 1939 PA 3, MCL 460.1 to

460.10cc. Electric utility does not include a municipal utility,

affiliated transmission company, or independent transmission

company.

(f) "Expedited siting certificate" means a certificate

authorized under section 69, granted to electric utilities,

affiliated transmission companies, and independent transmission

companies.

(g) "Federal approval" means approval by the applicable

regional transmission organization or other federal energy

regulatory commission approved transmission planning process of a

transmission project that includes the transmission line. Federal

approval may be evidenced in any of the following manners:

(i) The proposed transmission line is part of a transmission

project included in the applicable regional transmission

organization's board-approved transmission expansion plan.

(ii) The applicable regional transmission organization has

informed the electric utility, affiliated transmission company, or

independent transmission company that a transmission project

submitted for an out-of-cycle project review has been approved by

MISO, and the approved transmission project includes the proposed

transmission line.

(iii) If, after the effective date of this act, the applicable

regional transmission organization utilizes another approval method

for transmission projects proposed by an electric utility,

affiliated transmission company, or independent transmission

company, the proposed transmission line is included in a

transmission project approved by the applicable regional

transmission organization through the process developed after the

effective date of this act.

(iv) Any other federal energy regulatory commission approved

transmission planning process of a transmission project.

Senate Bill No. 213 as amended June 27, 2008

(h) "Independent transmission company" means a person,

partnership, corporation, association, or other legal entity, or

its successors or assigns, engaged in this state in the

transmission of electricity using facilities it owns that have been

divested to the entity by an electric utility that was engaged in

the generation, transmission, and distribution of electricity in

this state on December 31, 2000, and is independent of an electric

utility or an affiliate of the utility, generating or distributing

electricity to retail customers in this state.

(i) "Municipality" means a city, township, or village.

(j) "Purchase power agreement" means an agreement negotiated

between an electric utility and the owner of a wind energy

conversion facility to purchase wind energy from the wind energy

conversion facility.

(k) "Transmission line" means all structures, equipment, and

real property necessary to transfer electricity at system bulk

supply voltage of 100 kilovolts or more.

(l) "Wind energy conversion facility" means a wind energy

conversion system in this state that collects and converts wind

into energy to generate electricity.

(m) "Wind energy resource zone" or "zone" means an area

approved as a wind resource zone by the commission as provided in

section 67.

Sec. 63. Within 60 days after the effective date of this act,

the commission shall create the wind energy resource zone board.

The board shall consist of 9 members, as follows:

<<~~(a) A member representing commission staff.~~

Senate Bill No. 213 as amended June 27, 2008

~~(b) A member representing the~~ ~~Michigan~~ ~~electric cooperative~~

~~association, a~~ ~~Michigan~~ ~~nonprofit corporation, or a successor~~

~~organization.~~

~~(c) Two members representing the electric utility industry.~~

(a) 1 member representing the commission.

(b) 2 members representing the electric utility industry.

(d) 1 member representing the attorney general.

(e) 1 member representing the renewable energy industry.

(f) 1 member representing municipalities.

(g) 1 member representing the electric transmission industry.

(h) 1 member representing the public at large.>>

Sec. 65. (1) The wind energy resource zone board shall

exercise its powers, duties, and decision-making authority under

this part independently of the commission.

(2) The board shall do all of the following:

(a) Study wind energy production potential and the viability

of wind as a source of commercial energy generation in this state.

(b) Study availability of land in this state for potential

utilization by wind energy conversion facilities.

including studying existing wind energy conversion facilities,

estimates for additional wind energy conversion facility

development, and average annual recorded wind velocity levels. The

board's studies should include examination of wind energy

conversion facility requests currently in the applicable regional

transmission organization's generator interconnection queue.

(3) Within 240 days after the effective date of this act,

provide a report detailing its findings. The board's report shall

include the following:

(a) A list of regions in the state with the highest level of

wind energy harvest potential.

(b) A description of the estimated maximum and minimum cost

effective generating capacity in megawatts that can be installed in

each identified region of the state.

Senate Bill No. 213 as amended June 27, 2008

effective energy production potential for each identified region of

the state.

(d) An estimate of the maximum wind generation capacity

already in service in each identified region of the state.

(4) After the board issues its report as provided in this

section, electric utilities, affiliated transmission companies and

independent transmission companies with transmission facilities

within or adjacent to regions of the state identified in the

board's report shall identify existing or new transmission

infrastructure necessary to deliver maximum and minimum wind energy

production potential for each of those regions, and shall submit

this information to the board for its review.

Sec. 67. (1) Based on the board's findings as reported under

section 65, the commission shall, through a final order, designate

the area of this state likely to be most productive of wind energy

as the primary wind energy resource zone and may designate

additional wind energy resource zones.

(2) A wind energy resource zone shall be created on land that

is entirely within the boundaries of this state.

(3) A zone created by the commission shall encompass a natural

geographical area or region of the state as identified by the board

in its report issued under section 65.

(4) <<In determining the location of a zone, the commission shall

ensure that there are not adverse impacts on the public health, safety, or welfare and that any adverse impacts on private property values are minimal.>> In determining the location of a zone, the commission

shall consider all of the following factors pursuant to the

findings of the board:

(a) Average annual wind velocity levels in the region.

(b) Availability of land in the region that may be utilized by

wind energy conversion facilities.

(d) Potential for megawatt output of combined wind energy

conversion facilities in the region.

(e) Received transmission request forms.

(5) In conjunction with the issuance of its order under

subsection (1), the commission shall submit to the legislature a

report on the effect that setback requirements and noise

limitations under local zoning or other ordinances may have on wind

energy development in wind resource zones. The report shall include

any recommendations the commission may have for legislation

addressing these issues. Before preparing the report, the

commission shall conduct hearings in various areas of the state to

receive public comment on the subject of the report.

Sec. 69. (1) To facilitate transmission of electricity

generated by wind energy conversion facilities located in wind

resource zones, the commission shall issue expedited siting

certificates to an electric utility, affiliated transmission

company, or independent transmission company as provided in this

part. A wind energy conversion facility that is issued an expedited

siting certificate is exempt from any local zoning ordinance except

for provisions regulating setbacks and noise.

(2) An electric utility, affiliated transmission company, or

independent transmission company shall apply to the commission for

an expedited siting certificate. An applicant may withdraw an

application at any time.

(3) Before filing an application for an expedited siting

certificate for a proposed transmission line under this part, an

electric utility, affiliated transmission company, or independent

transmission company must receive any required approvals from the

applicable regional transmission organization for the proposed

transmission line.

(4) Sixty days before seeking approval from the applicable

regional transmission organization for a transmission line as

described in subsection (3), an electric utility, affiliated

transmission company, or independent transmission company shall

notify the commission in writing that it will seek such approval.

(5) The commission shall represent the state's interests in

all proceedings before the applicable regional transmission

organization for which the commission receives notice under

subsection (4).

Sec. 71. An application for an expedited siting certificate

shall contain all of the following:

(a) Evidence that the proposed transmission line received any

required approvals from the applicable regional transmission

organization.

(b) The planned date for beginning construction of the

proposed transmission line.

its route, and its expected configuration and use.

(d) Information addressing potential effects of the proposed

transmission line on public health and safety.

(e) Information indicating that the proposed transmission line

will comply with all applicable state and federal environmental

standards, laws, and rules.

(f) A copy of the board's report evidencing cost-effective

wind potential in the zone, and an explanation of how the proposed

line will enable that potential.

(g) Other information reasonably required by the commission

pursuant to rule.

Sec. 73. (1) Upon applying for a certificate, an electric

utility, affiliated transmission company, or independent

transmission company shall give public notice in the manner and

form the commission prescribes of an opportunity to comment on the

application. Notice shall be published in a newspaper of general

circulation in the relevant zone within a reasonable time period

after an application is provided to the commission, and shall be

sent to each affected municipality and each affected landowner on

whose property a portion of the proposed transmission line will be

constructed. The notice shall be written in plain, nontechnical,

and easily understood terms and shall contain a title that includes

the name of the electric utility, affiliated transmission company,

or independent transmission company and the words "Notice of Intent

to Construct a Transmission Line in a Wind Energy Resource Zone".

(2) The commission shall conduct a proceeding on the

application for an expedited siting certificate as a contested case

under the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328.

(3) The commission shall grant an expedited siting certificate

if it determines all of the following:

Senate Bill No. 213 as amended June 27, 2008

(a) The proposed transmission line received any required

approvals from the applicable regional transmission organization.

(b) The proposed transmission line <<~~does not present an~~

~~unreasonable threat to public health or safety.~~ will not result in an

adverse impact on the public health, safety, or welfare and that any adverse impacts on private property values will be minimal.>>

applicable state and federal environmental laws.

(4) If the commission grants an expedited siting certificate

under this part, the certificate shall take precedence over a

conflicting local ordinance, law, rule, regulation, policy, or

practice that prohibits or regulates the location or construction

of a transmission line for which the commission has issued a

certificate.

(5) In an eminent domain or other related proceeding arising

out of or related to a transmission line for which expedited siting

authority is issued, a certificate approved under this part is

conclusive and binding as to the necessity for that transmission

line and its compatibility with the public health and safety.

(6) The commission has a maximum of 180 days to grant or deny

an expedited siting certificate under this section.

Sec. 75. (1) A person who plans to construct a wind energy

conversion facility within a wind energy resource zone may apply to

the commission for certification of the wind energy conversion

facility.

(2) An application under subsection (1) shall contain the

following information:

(a) The location of the wind energy conversion facility,

including a detailed description of the land.

(b) A certification that the applicant will own the wind

energy conversion facility.

(d) If a zoning ordinance prohibits or regulates the location,

development, or construction of the wind generation facility, a

description of the manner in which that zoning ordinance prohibits

or regulates the location, development, or construction of the

proposed wind energy conversion facility.

(e) The estimated amount of the wind energy conversion

facility's annual energy production potential.

(f) Any other information reasonably required by the

commission pursuant to rule.

Sec. 77. Within 30 days of receiving an application under

section 75, the commission shall approve the application and

certify the wind energy conversion facility if the commission

determines all of the following:

(a) Construction has not begun on the wind energy conversion

facility.

(b) The wind energy conversion facility will be located within

a wind energy resource zone.

optimize benefits from wind energy by meeting a minimal capacity

factor.

Sec. 83. The commission may revoke the certification of a wind

energy conversion facility for any of the following reasons:

(a) The wind energy conversion facility is no longer in

Senate Bill No. 213 as amended June 27, 2008

operation.

(b) The wind energy conversion facility does not begin

construction or become operational within 36 months from the date

the certificate is granted and becomes final, and the commission

determines that an extension of time is unreasonable.

Sec. 85. The commission shall make an annual report,

summarizing the impact of establishing wind energy resource zones,

wind energy generation, expedited transmission line siting

applications, estimates for future wind generation within wind

energy resource zones, and recommendations for program enhancements

or expansion, to the governor and the legislature on or before the

first Monday of March of each year.

Sec. 87. This part does not prohibit an electric utility,

affiliated transmission company, or independent transmission

company from constructing a transmission line without obtaining an

expedited siting certificate.

Sec. 89. The commission may promulgate rules to implement this

part pursuant to the administrative procedures act of 1969, 1969 PA

306, MCL 24.201 to 24.328.

Sec. 91. (1) A commission order relating to any matter

provided for under this part is subject to review as provided in

section 26 of 1909 PA 300, MCL 462.26.

(2) In administering this part, the commission shall have only

those powers and duties granted to the commission under this part.

Sec. 93. This part shall control in any conflict between this

part and any other law of this state.

<<Sec. 95. This part does not confer the power of eminent

domain.>>

Enacting section 1. As provided in section 5 of 1846 RS 1, MCL

8.5, this act is severable.

Enacting section 2. This act does not take effect unless all

of the following bills of the 94th Legislature are enacted into

law:

(a) Senate Bill No. 1000.

(b) Senate Bill No. 1040.

(d) Senate Bill No. 1048.