In re Consumers Energy Co.

The Michigan Public Service Commission (the commission) (defendant) considered a request authorizing the smart grid and advanced metering infrastructure (AMI) program of Consumers Energy Company. The smart grid and AMI program aimed to install smart meters to allow customers to access real-time energy-consumption data so they could adjust their usage to reduce costs. Consumers Energy provided testimony to the commission from several of its employees about how the benefits of the AMI program justified the grant of funding. The employees testified that the coming changes to the electricity industry necessitated the implementation of smart grid and AMI technology. The commission also considered expert testimony from its own staff witness. The commission’s staff witness indicated that Consumers Energy’s initial funding request was at a level for full deployment of the smart grid and AMI program as opposed to a pilot program, but the commission had not yet approved full deployment. The staff witness testified that if the costs of the pilot program were controlled, continued funding of the pilot program with downward adjustment in cost of about $40 million was reasonable. Consumers Energy had planned to spend $200 million on the smart grid and AMI pilot program. The commission expressed caution to Consumers Energy but approved funding at a conservative level for Consumers Energy’s smart grid and AMI pilot program based on the recommendation of its staff witness and the testimony from Consumers Energy’s employees. The Michigan attorney general and the Association of Businesses Advocating Tariff Equity (ABATE) (plaintiffs) appealed the commission’s order, arguing that the commission’s decision was based on insufficient evidence of the program’s costs and benefits.