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Mich. court allows Consumers Energy smart meter program to continue

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Mich. court allows Consumers Energy smart meter program to continue

The Michigan Court of Appeals backed a decision by the statePublic Service Commission to allow a smart meter program run by tocontinue, rejecting concerns from the Michigan Attorney General's Office of alack of evidence to support the cost savings of the program.

The order, signed by Judges Michael Gadola and Karen FortHood, backed a 2013 order from the PSC that allowed Consumers Energy, asubsidiary of CMS Energy Corp.,to proceed with the second phase of its advanced metering infrastructure program.The first phase of the pilot program to install smart meters began in 2012.

In its decision, the court found that the PSC's order "approvingfull deployment of Consumers Energy's AMI program was supported by therequisite evidence, and was not unlawful or unreasonable." The PSC wouldcontinue to review the costs associated with the AMI program in each futurerate case, the court added.

Consumers Energy and the commission did not have any commenton the court's decision.

The court affirmed that the PSC was "entitled" tobase its order on an updated business case from Consumers Energy thatcalculated a net present value of $42 million from the program over 20 years.The court also heard testimony from witness Lauren Youngdahl, who then servedas manager of Consumers Energy's Smart Grid Customer Engagement Programs.

Consumers Energy's AMI program has a total cost of $750million, according to Judge Peter O'Connell's dissenting opinion. However, O'Connellsuggested having only one witness, Youngdahl, testify on behalf of the cost andbenefits of the program is not enough evidence to back the $42 million in netsavings.

"Youngdahl did not support her testimony with anyevidence — neither data nor details — but instead merely speculated on thebasis of Consumers' plans for future years and offered conclusory assertions,"O'Connell said in his dissent.

As part of a 2013 settlement agreement with ConsumersEnergy, Attorney General Bill Schuette's office reserved two issues for furtherdeliberation, one of which pertained to a request from Schuette's office forthe PSC to suspend the AMI program. A second issue pertained to objectionsraised by Consumers Energy's customers and the attorney general regardingopt-out fees charged for not participating in the AMI program.

The court focused on the first issue on whether to suspendthe AMI program because the PSC did not base its decision to continue theprogram on sufficient evidence. The court did not address the opt-out feesbecause it had remanded the issue along with other unresolved issues back tothe PSC to be reviewed separately.

A witness brought by the Attorney General's Office said theprogram had a negative net present value to ratepayers of $133.4 million,according to the court's order. The court also heard from the Attorney General'soffice that "the savings predicted by Consumers could not be confirmed andwere not based on studies performed with Consumers' customers," the ordersaid. The Attorney General Office could not be immediately reached for commenton whether it might appeal the court's decision.(Attorney General v. Michigan PublicService Commission and Consumers Energy Co., No. 317434)