Michigan regulators will permit exceptions to code of conduct

By the OGJ Online Staff

HOUSTON, Oct. 29, 2001 – The Michigan Public Service Commission said after numerous complaints it will allow waivers of provisions of its code of conduct for electric utilities when competition begins in January.

The code of conduct is intended to promote fair competition by establishing measures to prevent cross-subsidization, information sharing, and preferential treatment between a Michigan utility’s regulated and unregulated services or between an alternative electric supplier offering regulated services in Michigan and its affiliates. It was originally adopted in December 2000.

Under the code of conduct, a regulated service is one which the commission has authority to set the price for the service. The revision permits electric utilities and alternative electric suppliers to request waivers from one or more provisions of the code after demonstrating that the waiver will not inhibit the development or functioning of a competitive market.

An electric utility or alternative electric supplier may request a waiver at the time it files its code of conduct compliance plan with the commission, which is required within 60 days of today’s order. “Adopting a code of conduct is a key element in implementing the Customer Choice and Electricity Reliability Act,” said Chairman Laura Chappelle.

The order requires Michigan’s electric utilities and alternative electric suppliers providing regulated services in Michigan to comply with the code of conduct provisions, including:

– Functioning in a manner to prevent anticompetitive behavior, by requiring the offering of unregulated services or products through one or more affiliates or other entities within the corporate structure, such as divisions.

– Prohibiting subsidization in any manner, directly or indirectly, of the unregulated business of its affiliates or other separate entities.

– Maintaining books and records separately from those of its affiliates or other entities within the corporate structure.

– Prohibiting the sharing of facilities, equipment, or operating employees, but may share computer hardware and software with documented protection to prevent discriminatory access to competitively sensitive information.

– Offering to all alternative electric suppliers operating within the electric utility’s service territory or all alternative electric supplier customers any discounts, rebates, fee waivers, or waiver of its regulated tariffed terms and conditions for service provided to its affiliate or other separate entity.

– Prohibiting the sharing of information obtained by the electric utility or alternative electric supplier gathered as a result of its regulated business with its affiliates or other entities within the corporate structure, unless the same information is provided to competitors operating in Michigan on the same terms and conditions and contemporaneously.

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