Court Rejects Detroit Edison’s “Smart Meter” Program

A recent decision addressed the validity of the Michigan Public Service Commission's (MPSC) decision to allow Detroit Edison to increase its rates to pay for smart meters.¹ There, the MPSC approved funding for Detroit Edison to pursue a plan to upgrade its meters.² Specifically, the plan would involve Detroit Edison installing smart meters in about 500,000 homes, in about 30 municipalities. These smart meters would let Detroit Edison remotely monitor and shut off electricity.

The Michigan Court of Appeals reversed the MPSC’s ruling, and ruled that the MPSC erred in letting Detroit Edison increase its rates to pay for the smart meters. The Court reasoned that the MPSC erred in approving funding for the smart meter program because evidence was lacking that the meters were needed, or would benefit customers. Therefore, the Court ruled that the rate increase was unreasonable because it was not supported by competent, material or substantial evidence.

Relatedly, in January 2012, the MPSC opened an investigation into the deployment of smart meters by electric utilities.³ Noting that consumers and municipalities have expressed concern about smart meters, the MPSC ordered all regulated electric utilities to submit information to the MPSC by March 16, 2012, on a number of issues, including:

1. The utility's existing plans for deployment of smart meters in its service territory;
2. Any scientific information known to the utility that bears on the safety of smart meters; and
3. An explanation of the steps that the utility intends to take to safeguard the privacy of the information gathered.

Comments were due April 16, 2012. Over 200 comments were filed, including many by municipalities.

The next step is for the MPSC Staff to file its report. That report is due June 29th. The Staff report will summarize the filings in this docket, independently review the literature regarding smart meters, and identify any developments in other jurisdictions pertinent to this investigation. At the end of its report, the Staff will make its recommendations, including suggestions regarding how the MPSC should best implement the Staff's recommendations.

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¹In re Application of Detroit Edison Co to increase rates, ____ Mich App ____; ____ NW2d ____ (2012).
²MPSC Case No. U-15751.
³MPSC Case No. U-17000.

• Read the full June 2012 Municipal Law News