Senate Members Differ on Competition in Electric Markets

Legislation has been introduced that would allow the Public Service Commission (PSC) to incrementally increase the current 10 percent cap on electric choice as demand increases for alternative electric suppliers governed by that cap.

Senate Bill 235, introduced by Senator Mike Shirkey (R-Clarklake), stands in direct opposition to Senate Bill 247, which was introduced earlier by Senator Ken Horn (R-Frankenmuth). SB 247 largely phases out the ability of major utility customers to sign up with other electric suppliers.

In addition to the incremental increase, Senate Bill 235 allows the PSC to create an auction process on an annual basis to remove a complaint by utilities that they have to be the supplier or provider of last resort. Current law requires utilities to be the provider of last resort for those who are currently in the choice market.

The bill also directs the PSC to create a "true market-driven process" for any new, long-term expansion of generation. Once the Public Service Commission determines Michigan needs more capacity investment, PSC would create a Request for Proposal and allow anyone that qualifies to bid on that investment.

The bill allows aggregation of certain customers. In SB 235, a small city, for example, could aggregate its citizens and act as a unified buyer. The provision would prove especially helpful for residential and small commercial customers.

Senator Shirkey's bill has been referred to the Senate Energy and Technology Committee for further debate and discussion, along with Senator Horn's bill that does the complete opposite by eliminating electric choice unless those using it decide to stay with it.

Senator Mike Nofs (R-Battle Creek), Chair of the Energy and Technology Committee has committed to introducing a compromise proposal for reforming the state's energy law at the end of the month. There is speculation he will keep the 10 percent cap on electric choice competition but with new conditions.

Some of the current debate from members of the Committee includes setting new conditions on people currently in choice competition. The other issues that seem to be holding up any movement include: electric choice and when customers can return; renewable energy and whether there should be a mandate versus goals, and how goals can be effectively drafted; how much competition is good or bad; integrated resource plans and how to set that up; and the authority of the Public Service Commission.

Many groups, agencies and legislators have been working on this issue and the discussions are ongoing. The Committee hopes to unveil some compromise legislation by the end of the month.

posted by PAA Online , Friday, April 10, 2015 11:05 AM
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House Judiciary Committee to take up Medical Marijuana Bills

Two pieces of legislation aimed at loosening the medical marijuana restrictions in the State of Michigan are set for a hearing when the legislature returns from break. House Bills 4209 and 4210 are re-introductions of bills from last session that would permit medical marijuana provisioning centers and allow edible and topical forms of the drug.

House Bill 4209 sponsored by Representative Mike Callton (R-Nashville) allows access of medical grade marijuana to patients through a “Provisioning Center” or dispensary. The bill also allows caregivers to sell medical grade marijuana to the provisioning center agents for distribution.

The bill further provides local municipalities the ability to decide whether they want to have provisioning centers. This bill, contrary to current Michigan Law, permits the municipality to zone-out completely a provisioning center; or will permit the municipality significant oversight, control and licensing authority over them.

House Bill 4210, sponsored by Representative Lisa Lyons (R-Alto) prevents a person from being penalized for manufacturing a marijuana-infused product if the person is a registered patient, a primary caregiver, or a medical marijuana-provisioning center. The bill also establishes a felony penalty of up to two years imprisonment and/or a maximum fine of $2,000 for the transfer of a marijuana-infused product by a patient to another individual, by a caregiver to someone other than a qualifying patient of the caregiver, or by a provisioning center to someone other than a qualifying patient or registered caregiver.

Some legislators believe it is important to regulate marijuana provisioning centers because the state is on the verge of a legalization drive and regulating centers after legalization would be difficult. Representative Callton has not been in support of legalization.

The two-bill package has been referred to the House Judiciary Committee instead of the House Health Policy Committee, and has some lawmakers scratching their heads because they see this as a medical issue and not a criminal matter. Nevertheless, the House Judiciary Chair has agreed to take up these bills when legislators return.

posted by PAA Online , 11:04 AM
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Michigan Supreme Court Weighs in on State Teacher Retirement

On Wednesday, the Court issued an opinion saying the Michigan legislature did not violate the Constitution when they required teachers and other public school employees to contribute to their retiree health care costs.

In a 6-0 opinion, Justice Stephen Markman wrote in the decision AFT Michigan v. Michigan that because the law, PA 300 of 2012, has a provision that permits teachers and public school workers to opt out of the retirement health care system. Those in the system must contribute 3 percent of their health care costs and that would not be considered a taking.

This Public Act, which was the center of the controversy, made significant changes to the state's teacher pension and retiree health care system. It allowed teachers and other affected workers to opt out of retiree health care, but if they elected to remain in the system, they would have to pay 3 percent of the total premium.

The act also required teachers to contribute more to their pensions, requiring they contribute 4 percent to that system's basic plan if they wished to see benefits accrue at current rates. The teachers could decide not to contribute to the system and still have benefits accrue, but at a lower rate.

Justice Markman said in the opinion that government cannot "attach conditions to governmental benefits that effectively coerce individuals into relinquishing their constitutional rights.” However, the options provided to teachers in the act were a primary reason the act is constitutional.

Justice Markman further wrote in the opinion that the requirement does not meet the definition of an unconstitutional taking because it does seize a person's property for a public purpose without providing just compensation.

Parties to this suit brought before the Michigan Supreme Court have asserted that the 2012 law impairs their contracts, which is a violation of the Constitution.

The Court said the teachers and other unionized workers do not have a contract between themselves and the state. Their contract is with their employers. Nor were they ever given an express guarantee by the state's Office of Retirement Services that their original benefits would never change.

posted by PAA Online , 11:00 AM
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PAAdvisory Briefs

Former Credit Union CEO Named New DIFS Director

Former CEO of Michigan State University Federal Credit Union, Pat McPharlin, was tapped by Governor Snyder this week to lead the Department of Insurance and Financial Services as outgoing Director Ann Flood returns to the private sector. Both the Michigan Credit Union League and the Michigan Association of Health Plans have publicly supported Mr. McPharlin’s appointment.

Snyder Signs Executive Order Moving Governor's Talent Investment Board

Governor Rick Snyder on Tuesday signed an executive order to locate the Governor's Talent Investment Board within the new Talent Investment Agency. Under EO 2015-11, the Talent Board will be charged with advising and assisting the governor regarding compliance with the federal Workforce Innovation and Opportunity Act of 2014. The mission of the board also includes bringing together employers, organized labor and community-based organizations, including apprenticeship programs, to make recommendation on how best to develop workforce talent across the state.

Snyder Names Former State Police Official as Employer

Governor Snyder announced this week that Marie Waalkes, former human resources director for the Department of State Police will serve as the new state employer. In a statement Governor Snyder praised Ms. Waalkes saying, “she will be a principled leader who will ensure an inclusive and constructive work environment that benefits our hardworking employees, Michiganders and taxpayers.” Ms. Waalkes succeeds Jan Winters, who was recently named personnel director by the Civil Service Commission.

posted by PAA Online , 10:57 AM
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