April 21, 2015, Introduced by Senators CASPERSON, HORN, KNEZEK, O'BRIEN, STAMAS, SCHMIDT, SCHUITMAKER, ANANICH, KOWALL and SHIRKEY and referred to the Committee on Energy and Technology.
A bill to regulate the siting and construction of certain
electric transmission lines; to prescribe powers and duties of
certain state and local entities and officials; to create a board;
to prescribe the board's powers and duties; and to provide for
certain fees.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan electric infrastructure act".
Sec. 2. As used in this act:
(a) "Board" means the Michigan electric infrastructure board
created in section 3.
(b) "Commission" means the Michigan public service commission
created in section 1 of 1939 PA 3, MCL 460.1.
(c) "Construction" means any substantial action constituting
placement or erection of the foundations, trenches, facilities,
equipment, or structures supporting a transmission line including,
but not limited to, the conductors, wires, or other equipment
attached to the structures. Construction does not include
preconstruction activity or the addition of circuits to an existing
transmission line.
(d) "Electric utility" means a person, partnership,
corporation, association, or other legal entity whose transmission
or distribution of electricity the commission regulates under 1909
PA 106, MCL 460.551 to 460.559, or 1939 PA 3, MCL 460.1 to 460.11.
Electric utility does not include an independent transmission
company.
(e) "Good cause" means an event or circumstance, whether or
not foreseeable, not caused by a qualified developer that prevents
the qualified developer from complying with an obligation under
this act. Good cause does not include a strike or other labor
unrest that affects only the qualified developer, an increase in
prices or other change in general economic conditions, or a change
in law or regulations.
(f) "Independent transmission company" means that term as
defined in section 2 of the electric transmission line
certification act, 1995 PA 30, MCL 460.562.
(g) "Municipality" means a city, township, or village.
(h) "Notice to construct" means a notice issued by the board
granting an entity the sole right to construct a transmission line
until the notice to construct expires.
(i) "Preconstruction activity" means that term as defined in
section 2 of the electric transmission line certification act, 1995
PA 30, MCL 460.562.
(j) "Qualified developer" means either of the following:
(i) An independent transmission company that commits to
support and advocate for the implementation of 1 resource adequacy
zone that includes both the Upper and Lower Peninsulas of this
state.
(ii) An entity that the board determines meets all of the
criteria stated in section 5(4).
(k) "Resource adequacy zone" means a geographic area, defined
by a regional transmission organization, for which there must be
access to sufficient total generation capacity, both internal and
importable into the zone, to serve load in accordance with the
regional transmission organization's requirements.
(l) "Route" means real property or other infrastructure on or
across which a transmission line is constructed or proposed to be
constructed.
(m) "Transmission line" means all structures, equipment, and
real property necessary to transfer electricity at system bulk
supply voltage of 100 kilovolts or more.
(n) "Utility corridor" means the geographic area necessary to
accommodate the construction and operation of 1 or more electric
transmission or distribution lines.
Sec. 3. (1) The Michigan electric infrastructure board is
created within the department of licensing and regulatory affairs.
The board shall consist of 7 members, appointed by the governor as
follows:
(a) One individual representing the department of
environmental quality.
(b) One individual representing the department of natural
resources.
(c) One individual representing the state energy office.
(d) One individual representing the Michigan economic
development corporation.
(e) One individual representing the technical staff of the
commission.
(f) One resident of the Upper Peninsula.
(g) One resident of the Lower Peninsula.
(2) The members initially appointed under subsection (1) shall
be appointed within 30 days after the effective date of this act.
(3) The board shall exercise its powers, duties, and decision-
making authority independently of the commission.
(4) The board shall ensure that adequate resources will be
able to reach electric consumers in this state through the
construction of transmission infrastructure that will reduce
congestion and energy prices in this state, provide for additional
transmission capacity in this state, ensure reliable and efficient
operation of the integrated electrical transmission system in this
state, and support this state's energy policy goals.
Sec. 5. (1) Within 30 days of the initial appointment of the
board under section 3, the board shall publish a list of counties
within this state that contain transmission facilities on which
constraints have caused congestion in the 5 years preceding the
publication of that list, leading to increased electricity prices.
(2) Within 60 days after the board publishes the list under
subsection (1), the board shall request interested entities to
submit proposals identifying any proposed transmission line
necessary to do any of the following:
(a) Provide additional transmission capacity to the geographic
areas of this state that include the counties identified in
subsection (1), reduce congestion, constraints, and losses on the
electrical system in this state, and reduce the overall cost of
delivered energy in this state.
(b) Ensure the deliverability of generation resources both
internal and external to this state to loads throughout this state
for purposes of resource adequacy.
(c) Facilitate generation resource diversification.
(d) Increase the electrical connectivity between the Upper and
Lower Peninsulas of this state beyond the capability provided by
the 2 circuits connecting the Upper and Lower Peninsulas of this
state existing on the effective date of this act by adding
additional circuitry beyond the normal power carrying capacity of
these circuits to enable the formation of 1 resource adequacy zone
within the Midcontinent Independent System Operator footprint in
this state.
(3) Any proposals submitted under subsection (2) must include
all of the following:
(a) A preliminary cost estimate for the identified
transmission line.
(b) An analysis of the estimated cost impact to retail
ratepayers if the cost of the transmission line were allocated to
all retail electric customers located in the Midcontinent
Independent System Operator footprint in this state.
(c) Any benefits associated with the transmission line.
(d) A statement from the entity submitting the proposal that
indicates why that entity is a qualified developer.
(4) After receiving a proposal under subsection (2), the board
shall determine whether an interested entity is a qualified
developer. To be considered a qualified developer, an entity must
be an independent transmission company or must demonstrate all of
the following:
(a) A commitment to support and advocate for the
implementation of a resource adequacy zone that includes both the
Upper and Lower Peninsulas of this state.
(b) Managerial expertise and capability, as demonstrated by
all of the following:
(i) A history of singular corporate focus on transmission.
(ii) The continuous operation of a networked transmission
system in this state during the 5 years before a proposal is
submitted under subsection (2).
(iii) A governance structure or control of the entity that is
independent of the users of the transmission facilities, and that
no member of the entity's board of directors has an affiliation
with a user of the transmission facilities or with an affiliate of
a user during the member's tenure on the board, that would unduly
affect the entity's performance. As used in this subparagraph,
"user" means any entity or affiliate of that entity that buys or
sells electricity in the entity's region or in a neighboring
region.
(iv) Technical and engineering qualifications and experience
in the design, construction, operation, and maintenance of
transmission lines.
(c) Financial strength and capability, as demonstrated by all
of the following:
(i) That securities of that entity have been issued through an
initial public offering.
(ii) That the entity has securities traded on at least 1 stock
exchange or in the over-the-counter market.
(iii) That the entity has a registration statement on file
with the federal Securities and Exchange Commission.
(iv) That the entity has an investment grade credit rating
from a nationally recognized statistical rating organization.
(v) That the entity has access to capital markets.
(vi) That the entity has the ability to cover losses resulting
from damage to or failure of any part of the facilities of the
transmission line in the normal course of business or financial
strategy and experience to facilitate timely replacements or
rebuilds as a result of catastrophic destruction or natural aging.
(d) Transmission planning expertise and capability, as
demonstrated by all of the following:
(i) That the entity has qualified engineers responsible for
planning functions.
(ii) The entity's prior experience in multiple regional
transmission organization planning processes.
(iii) The entity's experience in planning transmission lines
with a voltage level of at least 300 kilovolts.
(iv) The entity's experience in complying with transmission
planning criteria and guidelines, including those relevant to
interconnection with existing facilities.
(v) The entity's experience in addressing public concerns
regarding transmission lines.
(e) Construction expertise and capability, as demonstrated by
all of the following:
(i) The entity's history of successful construction of
transmission lines at voltage levels of at least 300 kilovolts.
(ii) The entity's ability to meet a schedule for the
development and completion of the transmission line consistent with
the identified date by which the project is needed.
(iii) The entity's demonstrated ability to construct projects
in accordance with project budgets.
(iv) The entity's experience in acquiring rights-of-way to
facilitate approval and construction of transmission lines.
(v) The entity's land acquisition experience.
(vi) The entity's permitting and siting experience.
(vii) Whether the entity has a sufficiently sized skilled
workforce.
(viii) The entity's established supply chain and vendor
relationships.
(f) Operations and maintenance capability, as demonstrated by
all of the following:
(i) The entity's performance on benchmarking studies in the
areas of reliability, storm response, and safety.
(ii) Whether the entity has been registered with the North
American Electric Reliability Corporation as a transmission owner,
transmission operator, and transmission planner for the 5 years
before a proposal is submitted under subsection (2).
(iii) The entity's compliance with the North American Electric
Reliability Corporation registration requirements and regional
entity reliability standards for the 5 years before a proposal is
submitted under subsection (2).
(iv) Ownership training, certification, and operations center
experience.
(v) Operation of diverse equipment types, including poles,
conduits, insulators, and transformers.
(vi) Sufficiently sized skilled workforce.
(vii) Sufficient capabilities and competencies to perform
operations, maintenance, testing, inspection, repair, and
replacement tasks including outage response, switching, emergency
repairs, preventative or predictive maintenance, management of
spare equipment, real-time operations monitoring and control
capabilities, and major facility replacements or rebuilds.
(viii) Capability to maintain real-time reliability of the
electric transmission system, ensuring comparable and
nondiscriminatory transmission access and necessary services,
minimizing system congestion, and further addressing real or
potential transmission constraints.
(ix) Intention to construct, own, operate, and maintain an
electric transmission facility that is under consideration by an
applicable regional transmission organization.
(x) Established supply chain and vendor relationships.
(g) Exemplary corporate citizenship, as demonstrated by all of
the following:
(i) Community outreach.
(ii) Communication and information-sharing during all phases
of transmission line development, construction, and operation.
(iii) Civic contributions to regional, state, and local
communities.
(iv) Whether the transmission entity operates under policies
that promote positive performance designed to satisfy the
electricity requirements of customers.
(v) A dedicated customer service department.
(5) Within 120 days after receiving a proposal from a
qualified developer under subsection (2), the board shall issue a
letter to the qualified developer either rejecting the
qualifications or recommendations of the qualified developer in
full, requesting that the qualified developer provide more
information, or recommending the construction of the proposed
transmission line. If the board requests more information under
this subsection, the board shall, within 45 days of receiving that
information from a qualified developer, either reject the
recommendations or recommend construction of the proposed
transmission line. If the board issues a letter recommending
construction of a proposed transmission line, the qualified
developer receiving the letter shall, within 30 days after the
board issues the letter, submit an expression of interest in
constructing the transmission line identified by the board. If the
qualified developer does not submit an expression of interest
within 30 days after the board issues a letter under this
subsection, the board may issue a new request for submission of
proposals under subsection (2). Within 7 days after a qualified
developer has submitted an expression of interest, the board shall
issue the qualified developer that submitted the expression of
interest a notice to construct.
(6) The board may take any actions necessary and appropriate
to support a transmission line for which a notice to construct has
been issued, including coordination with the Midcontinent
Independent System Operator, supporting any out-of-cycle review
request, execution of any contracts or agreements, and preparation,
submission, and support for filings related to that project before
the Federal Energy Regulatory Commission or any other regulatory
body.
(7) The board shall initially give priority to proposals for a
transmission line that accomplishes the purpose stated in
subsection (2)(d).
(8) A document submitted to the board under this section is
not subject to disclosure under the freedom of information act,
1976 PA 442, MCL 15.231 to 15.246. The business that the board may
perform shall be conducted at a public meeting of the board held in
compliance with the open meetings act, 1976 PA 267, MCL 15.261 to
15.275.
Sec. 6. (1) Within 60 days after receiving a notice to
construct under section 5, a qualified developer shall submit any
necessary documents to the Midcontinent Independent System Operator
or other applicable regional transmission organization for any
required review and approval.
(2) Within 120 days after obtaining any required reviews and
approvals from the Midcontinent Independent System Operator or
other applicable regional transmission organization, the qualified
developer shall apply to the commission for an expedited siting
certificate under this act. If a qualified developer does not apply
to the commission within 120 days after obtaining any required
reviews and approvals from the applicable regional transmission
organization, the commission shall revoke the notice to construct
and the board may solicit expressions of interest for the
transmission line project under section 5. The commission may waive
the 120-day time limit if it determines the qualified developer had
good cause for failing to apply to the commission for an expedited
siting certificate within 120 days.
(3) A qualified developer shall include all of the following
in an application for an expedited siting certificate:
(a) Evidence that the applicant obtained a notice to construct
for the transmission line under section 5.
(b) The planned date to begin construction of the proposed
transmission line.
(c) A detailed description, route, and expected configuration
and use of the proposed transmission line.
(d) Information indicating that the proposed transmission line
will comply with all applicable state and federal environmental
standards, laws, and rules.
(e) A description and evaluation of 1 or more alternate
transmission line routes for the proposed transmission line, and a
statement of why the proposed route was selected.
(f) If a zoning ordinance prohibits or regulates the location
or development of any portion of the proposed route, a description
of the location and manner in which the zoning ordinance prohibits
or regulates the location or construction of the proposed route.
(g) Other information reasonably required by commission rules.
(4) After applying for an expedited siting certificate, an
applicant shall give public notice in the manner and form the
commission prescribes of an opportunity to participate in a
contested case under subsection (5) regarding the application.
Notice shall be published in a newspaper of general circulation in
the municipalities through which the proposed transmission line
project would run within 14 days after an application is submitted
to the commission under subsection (2). The notice shall be sent to
each affected municipality and each affected landowner on whose
property a portion of the proposed transmission line will be
constructed. The notice shall be written in plain, nontechnical,
and easily understood terms and contain a title that includes the
name of the applicant and the words "Notice of Intent to Construct
a Transmission Line".
(5) The commission shall conduct a proceeding on an
application for an expedited siting certificate as a contested case
under the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328. Upon receiving an application for a certificate,
the commission shall grant each affected municipality and each
affected landowner full intervener status as of right in commission
proceedings concerning the proposed transmission line.
(6) The commission shall grant an expedited siting certificate
under this act if the commission determines that all of the
following requirements are met:
(a) The applicant has received a notice to construct for the
proposed transmission line under section 5.
(b) The proposed transmission line does not represent an
unreasonable threat to the public convenience, health, and safety.
(c) The proposed or alternate route to be authorized by the
expedited siting certificate is feasible and reasonable.
(7) If the commission grants an expedited siting certificate
for a transmission line under this act, the certificate takes
precedence over a conflicting local ordinance, law, rule,
regulation, policy, or practice that prohibits or regulates the
location or construction of the transmission line. A zoning
ordinance or limitation imposed after a qualified developer applied
for an expedited citing certificate does not limit or impair the
transmission line's construction, operation, or maintenance.
(8) In an eminent domain or other related proceeding arising
out of or related to a transmission line for which an expedited
siting certificate is issued under this act, an expedited siting
certificate issued under this act is conclusive and binding as to
the public convenience and necessity for that transmission line and
the transmission line's compatibility with the public health and
safety or any zoning or land use requirements in effect when the
application was filed.
(9) The commission shall grant or deny an expedited siting
certificate within 180 days after receiving an application under
this section.
Sec. 8. If a transmission line constructed under this act is
located within an existing utility corridor owned by an electric
utility or independent transmission company other than the
qualified developer constructing the transmission line, in addition
to any fees or payments related to acquiring the rights to use the
utility corridor, the qualified developer constructing the
transmission line under this act shall make a 1-time payment to the
electric utility or independent transmission company owning that
corridor. The payment shall be equal to 50% of the tax assessed to
the electric utility or independent transmission company in the
prior tax year under the general property tax act, 1893 PA 206, MCL
211.1 to 211.155, for the utility corridor in which the
transmission line constructed under this act is located.
Sec. 9. (1) The costs of a transmission line for which a
notice to construct is issued under this act shall be allocated to
all retail electric customers located in the Midcontinent
Independent System Operator footprint within this state.
(2) The revenue requirement for a transmission line for which
a notice to construct is issued shall be calculated pursuant to the
open access transmission, energy and operating reserve markets
tariff administered by the Midcontinent Independent System
Operator.
(3) The board shall cooperate with the recipient of the notice
to construct, the commission, and the Midcontinent Independent
System Operator in making any filings necessary to implement the
cost allocation established in this section.
Sec. 10. The commission shall issue a report to the governor
and the legislature on or before the first Monday of March of each
year. The report shall include all of the following:
(a) A summary of the impact of this act.
(b) A list of any transmission lines constructed or approved
under this act during the previous year.
Sec. 11. Except for a transmission line for which another
entity holds a valid notice to construct that has not expired under
this act, this act does not prohibit an entity from constructing a
transmission line without obtaining an expedited siting
certificate.
Sec. 12. (1) A commission order relating to any matter
provided for under this act is subject to review as provided in
section 26 of 1909 PA 300, MCL 462.26.
(2) In administering this act, the commission has only those
powers and duties granted to it under this act.
Sec. 13. This act does not confer the power of eminent domain.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.