LANSING – The Public Service Commission must decide, and soon, what Detroit Edison’s transition costs were for moving to a competitive electric market. But the commission may delay reimbursing Edison for those costs and may set interest on those carried costs as it sees fit, the Court of Appeals ruled in a case released Wednesday.
Following prior decisions on transition costs under the Customer Choice and Electricity Reliability Act (PA 141 and PA 142, 2000), Judges Pat Donofrio, Jane Markey and Karen Hood ruled the PSC was wrong in conditionally approving $23 million in costs for Edison for 2001. The judges said (Detroit Edison v. Public Service Commission, COA docket No. 247930) the commission was required (case No. U-13341) to make a final order, not one that would be adjusted in the future.
But they said the commission was not required to set rates to reimburse Edison for those costs immediately. On an issue not addressed by prior appeals panels, this panel ruled the commission was within its powers to order the costs be held until January 1, 2006, when all rate caps are lifted and rates could be adjusted to cover the costs.
The commission also had the authority to order Edison to charge on 7 percent interest on those costs until they are fully reimbursed, the panel said. Edison had argued it should be able to charge 10.01 percent on the costs.
In addition to finding the commission had the legislative authority to set the interest rate, the panel also found that Edison had essentially abandoned the issue by not properly briefing it.
The court gave the commission 90 days to set a hearing on the 2001 transition costs, rejecting Edison’s argument that there was no need for further evidence in the case. And it gave the PSC 60 days after the hearing to issue a final order.
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