HB 5879 — Public utilities: rates; reduction of residential rates in correlation to personal property tax savings; require. Amends sec. 6a of 1939 PA 3 (MCL 460.6a). TIE BAR WITH: HB 5880'26

HB-5879, As Passed House, May 20, 2026 HOUSE BILL NO.

to KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf qualify residential energy conservation programs permitted under state law for certain federal exemption;

A utility may use projected costs and revenues for a future consecutive 12-month period in developing its KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 requested rates and charges.

If the utility uses projected costs and revenues for a future period in developing its requested rates and charges, the KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 utility may not implement the equal percentage increases or decreases before the calendar date corresponding to the start of the projected 12-month period.

An alteration or amendment in rates or rate schedules applied for by a KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 public utility that will not result in an increase in the cost of service to its customers may be authorized and approved without notice or hearing.

The commission shall authorize a utility to recover the cost of fuel, purchased gas, purchased steam, or purchased power only to the extent that the KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 purchases are reasonable and prudent.

The commission shall approve these rate schedules or approve transportation contracts entered into by the utility in good faith if the industrial or commercial customer has the installed capability to use an alternative fuel or otherwise has a viable alternative to receiving natural gas transportation service from the utility, the customer can obtain the alternative fuel or KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 gas transportation from an alternative source at a price that would cause them not to use the gas utility's system, and the customer, as a result of their use of the system and receipt of transportation service, makes a significant contribution to the utility's fixed costs.

(9) If, on or before January 1, 2008, a merchant plant entered into a contract with an initial term of 20 years or more to sell electricity to an electric utility whose rates are regulated by the commission with 1,000,000 or more retail customers in this state and if, before January 1, 2008, the merchant plant generated electricity under that contract, in whole or in part, from wood or solid wood wastes, then the merchant plant shall, upon on petition by the merchant plant, and subject to the limitation set forth in KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 subsection (10), recover the amount, if any, by which the merchant plant's reasonably and prudently incurred actual fuel and variable operation and maintenance costs exceed the amount that the merchant plant is paid under the contract for those costs.

If the total aggregate amount by which the eligible merchant plants reasonably and prudently incurred actual fuel and variable operation and maintenance costs determined by the commission exceed the amount that the merchant plants are paid under the contract by more than $1,000,000.00 per month, the commission shall allocate the additional $1,000,000.00 per month payment among the eligible merchant plants based upon on the relationship of excess costs KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 among the eligible merchant plants.

(12) Subject to subsection (13), if requested by an electric utility with less than 200,000 customers in this state, the commission shall approve an appropriate revenue decoupling mechanism that adjusts for decreases in actual sales compared to the projected levels used in that utility's most recent rate case that are the result of implemented energy waste reduction, KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 conservation, demand-side programs, and other waste reduction measures, if the utility first demonstrates the following to the commission:

The commission may approve an alternative methodology for a revenue decoupling mechanism authorized under subsection (12) or a financial incentive authorized under section 75 of the clean and renewable energy and energy waste reduction act, 2008 PA 295, MCL 460.1075, if the commission determines that the resulting aggregate revenues from those mechanisms would not result in a reasonable and cost- effective method to ensure that investments in energy waste reduction, demand-side programs, peak load reduction, and other waste reduction measures are not disfavored when compared to KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 utility supply-side investments.

(15) Not later than 60 days after the effective date of the 2026 amendatory act that amended this section, each natural gas and electric utility shall provide the commission the amount of money the utility saved in the most recent tax year from exemptions from the tax on personal property under the general property tax act, KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf 1 1893 PA 206, MCL 211.1 to 211.155.

(b) "General rate case" means a proceeding initiated by a utility in an application filed with the commission that alleges a KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf revenue deficiency and requests an increase in the schedule of rates or charges based on the utility's total cost of providing service.

Final Page KHS H06226'26 *_HB5879_INTR_1*_HB5879_APH_1 6sy7cqiz3daf