City of Holland v. Consumers Energy Company

STATE OF MICHIGAN
COURT OF APPEALS
CITY OF HOLLAND, FOR PUBLICATION
January 6, 2015
Plaintiff-Appellee,
v No. 315541
Ottawa Circuit Court
CONSUMERS ENERGY COMPANY, LC No. 12-002758-CZ
Defendant-Appellant.
CITY OF COLDWATER,
Plaintiff-Appellee,
v No. 320181
Branch Circuit Court
CONSUMERS ENERGY COMPANY, LC No. 13-040185-CZ
Defendant-Appellant.
Before: BORRELLO, P.J., and SERVITTO and SHAPIRO, JJ.
SHAPIRO, J. (concurring).
I concur.
There are two separate issues in this case. The initial question is whether Mich Admin
Code R 460.3411, i.e., Michigan Public Service Commission (PSC) Rule 411, as interpreted in
Great Wolf Lodge of Traverse City, LLC v Public Service Comm, 489 Mich. 27; 799 NW2d 155
(2011), bars these plaintiff-municipalities from providing the challenged utility service. If we
answer that question in the negative, then we must determine whether MCL 124.3(2) provides
such a bar.
Defendant Consumers rightly observes that the substantive language in Great Wolf Lodge
was sweeping and, in that case, it was of no consequence that the utility provider to whom the
premises owner sought to “switch” was a municipal power company rather than another PSC-
regulated utility. However, the municipalities rightly point out that whatever the substantive
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interpretation of Rule 411, it cannot be enforced against a party that does not fall within the
jurisdiction of the PSC. And, the Legislature has not given the PSC jurisdiction over municipal
power providers. See MCL 460.6(1) (“The public service commission is vested with complete
power and jurisdiction to regulate all public utilities . . . except a municipally owned utility . . .
.”). Therefore, I conclude that while Rule 411 bars one power provider from serving a premises
previously served by another, the PSC may not order a municipal power provider to comply with
Rule 411. In Great Wolf Lodge, 489 Mich. at 34, this problem did not prevent the aggrieved
utility from obtaining relief because the premises owner voluntarily subjected itself to the
jurisdiction of the PSC and, accordingly, the PSC could order the premises owner to comply with
Rule 411. That is not the case here. While it is unclear whether the Supreme Court considered
the instant factual scenario when deciding Great Wolf Lodge, I do not see how this Court can
require a party to comply with an administrative rule promulgated by an administrative body that
does not have jurisdiction over it. Since an absence of jurisdiction trumps any substantive
interpretation of Rule 411, I would not apply the rule in this case absent a clear directive to do so
from the Supreme Court.
By contrast, there is no jurisdictional problem with application of MCL 124.3(2).1
However, the language of this statute differs significantly from that of Rule 411. Rule 411
speaks of “the first utility” to serve the premises, a concept that requires a view to the past and a
determination of which utility was the first to provide service to the premises regardless of a later
cessation of that service. By contrast, MCL 124.3(2) speaks to “customers . . . already receiving
service[,]” a sentence construction that speaks to the present. Thus, where a customer is not
“receiving” service, it may contract with the provider of its choice even if there was some other
entity that was “the first utility” to serve the premises.
The issues in this case are complex, but I believe the majority’s conclusions are
consistent with the intent of the Legislature and Great Wolf Lodge. To the degree they are not,
the Legislature and/or the Supreme Court may take appropriate action.
/s/ Douglas B. Shapiro
1
MCL 124.3(2) provides that “[a] municipal corporation shall not render electric delivery
service for heat, power, or light to customers outside its corporate limits already receiving
service from another utility unless the serving utility consents in writing.”
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