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Development of Industry Standards

Energy Regulatory Partnership ProgramAbuja, Nigeria

July 14-18, 2008

Ikechukwu N. Nwabueze, Ph.D.Director, Regulated Energy Division

Michigan Public Service Commission

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Development of Industry Standards in Michigan

• Standards set in MPSC tariffs and rules including:Consumer Standards and Billing Practices for

Residential Gas and Electric ServiceBilling Practices Applicable to Non-Residential

Electric and Gas Service Technical Standards for Gas ServiceServices Supplied By Electric Utilities

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Consumer Standards and Billing Practices forElectric and Gas Residential Service

Administrative Rules Process developed by the State Office of Administrative Hearings and Rules

MPSC follows process:Request to commence rulemakingDraft rules are developedPublic hearing is heldPost amended draft rules issuedLegislative Joint Committee on Administrative Rules

reviews rules submitted by MPSCMPSC adopts rules

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Staff Development of Billing Rules

Staff drafts rules that are to be approved by the Commission. A public hearing is held to provide the public an opportunity to

participate in the process and have input in the rules. Staff meet with utility company representatives, consumer

groups, state agencies and other stakeholders who have an interest in the development of consumer standards and billing practices for customers.

Staff weighs input from stakeholders and make revisions where necessary.

Rules are eventually adopted by the Commission based on all information provided during the process as well as the Commissions views about consumer protections and customer and utility rights and responsibilities.

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Standards Developed

Standards developed included: General Provisions Application for Service Deposits and Guarantee Terms and Conditions Meter Reading Procedures, Meter Accuracy, Meter Errors and

Relocation Billing and Payment Standards Voluntary Termination Service Utility Procedures Procedures for Shutoff and Restoration of Service Energy Assistance and Shutoff Protection Programs Disputed Claim, Hearing and Settlement Agreement Commission Appeal Procedures

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General Provisions

The General Provisions of the rules include: Application of Rules

Rules apply to residential service provided by electric and natural gas utilities regulated by the Commission

Definitions Explains all terms used in the rules including:

Actual meter reading - meter reading based on actual energy use during the period reported

Billing error - an undercharge or overcharge of customer caused by such acts as incorrect meter reading or incorrect application of rate schedule

Billing month - 26 to 35 days of use

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Definitions (Continued)

Delinquent account - charges for service that remain unpaid at least 5 days after the due date

Late payment charge - finance, service, carrying or penalty charge assessed by utility because the bill or portion of it is delinquent

Positive identification - appropriate ID used but not limited to a driver’s license or state issued ID card, U.S. military card or military dependent’s ID card, Native American tribal document or passport

Space heating season - November 1 - March 31 Unauthorized use of service - theft, fraud, interference or

diversion of service including meter tampering, by-passing the meter, service restoration by someone other the utility company

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General Provisions (Continued)

Discrimination ProhibitedUtility can’t discriminate against or penalize a

customer for exercising any right granted by the rules. Additional Rules

Utility may adopt additional rules governing relations with customers that are reasonable and necessary and consistent with the Commission’s rules.

Commission’s rules prevail if there is a conflict between utility company tariffs and these rules.

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Application For Service

Applicant can request service in person at the utility company office, in writing, by telephone, fax or internet or other means of communication.

Applicant must provide positive identification.

May be required to pay a deposit.

May be required to pay delinquent account as a condition of acquiring service.

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Billing and Payment Standards

Deposits and Guarantee Terms and Conditions

Prohibited Practices – utility can’t require deposit or guarantee as a condition of new or continued service based on:

Income AgeHome ownership National originResidence location Marital statusRace Familial statusColor DisabilityCreed Any other criteria not allowed Sex by these rules

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Deposits (Continued)

Deposits for new customer required if:Customer has an outstanding bill with any gas or electric utility that accrued within the last 6 years.Customer misrepresents identity.Customer requests service at a location where customer does not reside.Customer engaged in unauthorized usage.Customer filed bankruptcy.

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Deposits (Continued)

Deposits for previous customer or for continued service may be required if:Prior delinquent account at the time of request for

service.Customer misrepresents identity or credit standing.Service shutoff for non-payment.Customer has given one or more bad checks on

the account.Unauthorized usage.

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Billing Frequency and Method of Delivery

Utility sends bill every month Customer has 21 days to pay Utility may use cycle billing if customer receives a

bill on or about same day of each billing month Utility can’t recover bill from customer for charges

due on someone else’s account Combination utility must allow low income

customer to decide which bill they want to pay if they can’t pay both gas and electric bill at same time

Restrictions on late payment charges if customer has estimated bill

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Bill Information

Utility bill must contain: Beginning and ending meter reading Units of energy consumed during billing month Rate customer is on and due date Any previous balance Amount due for energy usage, other charges, taxes Statement that utility is regulated by MPSC and that

customer can complain to the Commission if problems with the utility customer can’t be resolved

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Service Quality and Reliability Standards for Electric Distribution Systems

Set of MPSC rules that determine standards electric industry must comply with when providing service to its customers

Rules define unacceptable levels of performance Levels of performance during service interruptions

defined: Utility shall restore service within 36 hours to not less

than 90% of customers experiencing service interruptions.

Under catastrophic conditions utility shall restore service within 60 hours to not less than 90% of customers experiencing interruptions.

Utility shall restore service during normal conditions within 8 hours to not less than 90% of customers interrupted.

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Unacceptable Levels of Performance (Continued)

Wire down relief request standards outlined: Utility must respond within 240 minutes to

request for relief when there is a downed wire in a metropolitan area at least 90% of the time under all conditions

Utility must respond within 360 minutes to wire down call in non-metropolitan area 90% of the time

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Levels of Performance

• Service quality levels of performance related to customer calls:

Average customer call must be answered in less than 90 seconds

Customer complaint must have a response within 3 business days in 90 % of the cases

Utility must have a meter reading factor of 85% or more within the billing month

Utility must complete 90% or more of its new service installations within 15 business days

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Development of Industry Standards Summary

Standards set in comprehensive set of rules promulgated by the Commission and approved by the legislature

Rules have the force of law Staff, Utility companies and other stakeholders

participate in the rule making process Utility company develops tariffs determining the price

customers must pay for the service and service standards

Staff monitors utility company compliance with rules and tariffs

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Questions?