Public Service Commission Sends Strong Message - Posted September 27, 2004

Consumers Energy Slapped With Maximum $40,000 Fine For Sending Prohibited Bill Inserts

Michigan heating and air conditioning contractors won a double victory at the September 21 meeting of the of the Michigan Public Service Commission (MPSC).  The Commission handed down two decisions involving of prohibited bill inserts for Consumers Energy’s Appliance Service Plan (ASP). 

The implicit message of these rulings puts electric utilities on notice that violations of their electric code of conduct regarding heating and cooling repair plans will not be tolerated.

MAFC members Phil Forner and Lynn Briggs were instrumental in bringing about these landmark cases in the fight against unfair utility competition.  Both had responded to Consumers Energy bill inserts promoting the ASP — Forner twice for two separate incidents — by reporting the violations to the MPSC.

Besides the $40,000 fine assessed by the Commission, in MPSC Case #13830 Consumers Energy was ordered to pay Forner and Briggs $2,100 and $5,000 respectively to reimburse them for the value of their lost time spent on the case.

In MPSC Case #13948 Consumers Energy was ordered to determine the amount of the subsidy created by its insertion of a bill insert promoting its ASP in December of 2002.  The order states that this is “to ensure that its unregulated services are charged for the full amount of the subsidy.”

The Big Picture

These victories represent an important new phase in the struggle against unfair utility competition.  Since 2000, the Code of Conduct has been challenged by utilities at the Public Service Commission, in the Courts, and at the Legislature.

 While somewhat diminished in the legislature, the most important provisions of the Code of Conduct —such as the prohibition on joint marketing — were affirmed earlier this year in Public Act 88. 

Utilities have fared less successfully in the court system, having lost twice in the Court of Appeals.  Now they have appealed to the Michigan Supreme Court, which may be their last resort.  (Click here for more information.)

With the initial challenges to the Code of Conduct put down, the Public Service Commission is proceeding full speed ahead with the enforcement phase.  Besides the current rulings against  Consumers Energy,  the Public Service Commission has also initiated a proceeding regarding Detroit Edison for the same reason: Detroit Edison must  ‘Show Cause’ why it shouldn’t be held in violation for including bill inserts promoting for MichCon’s Home Protection Plus program in Fall of 2003.  (Click here to read the case filings.)

It is important to note that in both the Consumers Energy cases and the ongoing Detroit Edison proceeding, the Public Service Commission only acted after receiving notice of the violations from MAFC members.  The Detroit Edison proceeding was triggered by letters from MAFC members Sandra Wotli and Daniel Squires. 

Only as members stay engaged and active will progress be made to end the unfair utility practices.