The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6902

May 22, 1996

UTILITY CONSUMER PARTICIPATION BOARD:

Grants from the Utility Consumer Representation Fund by the Utility Consumer Participation Board

The Utility Consumer Participation Board may make a grant from the Utility Consumer Representation Fund under section 6m(17) of 1939 PA 3 to enable a grantee to participate in an informal examination of gas resource acquisition practices of Michigan gas utilities by the Gas Division of the Michigan Public Service Commission pursuant to an order entered in a proceeding under section 6h of 1939 PA 3.

Matthew E. McLogan

Chairman

Utility Consumer Participation Board

c/o Environmental Services Division

Michigan Department of Commerce

116 W. Allegan Street, 2nd Floor

Lansing, MI 48909

You have asked if the Utility Consumer Participation Board (the Board) may make a grant from the Utility Consumer Representation Fund (the Fund) under section 6m(17) of 1939 PA 3, MCL 460.1 et seq; MSA 22.13(1) et seq, to enable a grantee to participate in an informal examination of gas resource acquisition practices of Michigan gas utilities by the Gas Division of the Michigan Public Service Commission (MPSC).

This examination of gas resource acquisition practices was initiated as a result of orders issued by the MPSC in gas cost recovery (GCR) cases conducted under section 6h of 1939 PA 3. In those GCR cases, a grantee of the Board submitted testimony requesting the MPSC to conduct a contested-case examination of gas resource acquisition practices in the wake of restructuring of the United States natural gas industry by Federal Energy Regulatory Commission Order No. 636, 59 FERC p 61,030 (1992). The MPSC declined to conduct a contested-case examination, but did rule that its Gas Division should conduct a voluntary, informal examination and prepare a report. An applicant requested a grant from the Board to fund participation in this investigation, and as a result, the Board submitted this opinion request.

Moreover, the MPSC has not limited its review of issues directly affecting the energy costs paid by Michigan energy utilities to proceeding under sections 6h through 6k. Rather, it has sometimes addressed these issues in proceedings brought by an energy utility under the more general provisions of section 6a of 1939 PA 3. Further, the Board has made grants from the Fund to applicants to participate in these proceedings.

Both the Board and the Fund were created by 1982 PA 304 that amended several sections of 1939 PA 3 and added sections 6h through 6m. Sections 6h through 6k authorize proceedings before the MPSC to more carefully review the energy acquisition costs of energy utility companies (gas and electric).

Section 61(1) of 1939 PA 3 addresses the representation of energy utility customers in these proceedings as follows:

For purposes of implementing sections 6h, 6i, 6j, and 6k, this section and section 6m shall provide means of insuring equitable representation of the interests of energy utility customers.

Section 61(3) created the Board which, under section 61(5)(a), is comprised of advocates for residential utility consumers. Section 6m(1) created the Fund consisting of monies paid to the Fund by energy utility companies and investment earnings of the Fund. The Board is authorized, under section 6(m)(11) through (18), to make grants from the Fund to applicants that wish to participate in utility energy acquisition cost proceedings on behalf of energy utility customers.

Section 6(m)(17) addresses the use of Fund monies as follows:

The annual receipts and interest earned, less administrative costs, may be used only for participation in administrative and judicial proceedings under sections 6h, 6i, 6j, and 6k, and in federal administrative and judicial proceedings which directly affect the energy costs paid by Michigan energy utilities.

In the situation that prompted this request, the informal examination of gas resource acquisition practices of Michigan gas utilities by the Gas Division of the MPSC was directed by MPSC orders in proceedings under section 6h of 1939 PA 3. Since the examination was the result of MPSC orders in section 6h proceedings, any grantee would have been participating in a proceeding under section 6h within the meaning of section 6m(17).

As noted above, the MPSC has, on occasion, addressed issues directly affecting the energy costs paid by Michigan energy utilities in proceedings under section 6a of 1939 PA 3. The primary goal of statutory interpretation is to ascertain and effectuate the legislative purpose underlying the provision in question. This was expressed by the Michigan Supreme Court in White v Ann Arbor, 406 Mich 554, 562; 281 NW2d 283 (1979), as follows:

The primary and fundamental rule of constitutional or statutory construction is that the Court's duty is to ascertain the purpose and intent as expressed in the constitutional or legislative provision in question. Also, while intent must be inferred from the language used, it is not the meaning of the particular words only in the abstract or their strictly grammatical construction alone that governs. The words are to be applied to the subject matter and to the general scope of the provision, and they are to be considered in light of the general purpose sought to be accomplished or the evil sought to be remedied by the constitution or statute. See General Motors Corp v Erves (On Rehearing), 399 Mich 241, 255; 249 NW2d 41 (1976) (opinion by Coleman, J.).

To determine the purpose of 1939 PA 3, as amended by 1982 PA 304, we may examine the legislative history of HB 5527, which became 1982 PA 304. That legislative history discussed the contents of the bill as follows:

The bill would amend current law to prohibit the incorporation of purchased gas adjustment clauses, fuel cost adjustment clauses, and purchased and net interchanged power adjustment clauses in the rate schedules of utilities. New procedures would be established under which the Public Service Commission (PSC) could grant a gas cost recovery clause or a power supply cost recovery clause in a utility rate schedule, and would review a utility's plans for securing gas and electric power supplies. Further, the bill would establish the Utility Consumer Representation Fund in the state treasury, to be used by the attorney general and consumer advocates for participation in federal or state regulatory activities or litigation affecting the rates paid by Michigan utility customers.

 

 

The bill would provide a mechanism whereby the attorney general and consumer advocates would have more resources to participate in complex utility rate proceedings. This feature is extremely important, especially in light of the proposed new language which would require more hearings and increased public scrutiny of the plans of utilities to secure energy supplies. The bill would also provide improved discovery rights for intervenors in reconciliation hearings. [Emphasis added.]

House Legislative Analysis, HB 5527, October 6, 1982.

Thus, the manifest legislative purpose is to increase the resources available to consumer advocates to participate in MPSC energy utility proceedings that affect the energy costs paid by Michigan energy utilities. Where the MPSC considers an issue that directly affects the energy costs paid by Michigan energy utilities, the ability of the Board to fund participation by consumer advocates is not solely dependent upon which section of 1939 PA 3 the proceedings are conducted under. As long as the issue directly affects Michigan utility energy costs and could have been addressed in a proceeding under sections 6h through 6k, the legislative purpose permits the Board to make grants from the Fund to consumer advocates to participate in these important proceedings before the MPSC.

As stated above, in the past the Board has made grants from the Fund for consumer advocate participation in MPSC proceedings not brought under sections 6h through 6k that directly affect the energy costs paid by Michigan energy utilities. The interpretation of a statute by the agency charged with administering the act is entitled to the most respectful consideration and will not be rejected by the courts without cogent reasons. Magreta v Ambassador Steel Co, 380 Mich 513, 519; 158 NW2d 473 (1968).

In addition, the Board has included these grants in its annual detailed reports to the Legislature as required by section 6m(22) of 1939 PA 3. The conduct of the Legislature in amending 1939 PA 3 numerous times since 1982 without amending section 6m(17) demonstrates legislative acquiescence in the interpretation of the Board. Magreta v Ambassador Steel Co, 380 Mich, at pp 519-520.

It is my opinion, therefore, that the Utility Consumer Participation Board may make a grant from the Utility Consumer Representation Fund under section 6m(17) of 1939 PA 3 to enable a grantee to participate in an informal examination of gas resource acquisition practices of Michigan gas utilities by the Gas Division of the Michigan Public Service Commission pursuant to an order entered in a proceeding under section 6h of 1939 PA 3.

Frank J. Kelley

Attorney General