MPSC Adopts New Funding Factor for LIEAF

July 24, 2015—The Michigan Public Service Commission (MPSC) announced recently that it will be adopting a new funding factor for the Low Income Energy Assistance Fund (LIEAF). Based on the number of meters provided by participating utilities, MPSC will raise the funding factor from the current $0.97 per meter per month to $0.98 per meter per month. The new rate will start in September and run until the end of August 2016. As required by the Michigan Public Act 95 of 2013, MPSC must calculate the funding factor in such a way that it does not exceed $50 million per year, and the funding factor itself may not exceed $1.00 per month per meter.

The roughly $50 million generated from the LIEAF surcharge will be combined with somewhere between $10 million and $40 million of Michigan LIHEAP funds. Together, these funds form the Michigan Energy Assistance Program (MEAP). The MPSC and Michigan Department of Human Services, the LIHEAP grantee, distribute the MEAP funds to support energy-assistance programs for low-income households and provide services to help these households move toward self-sufficiency.

LIEAF replaced a previous ratepayer-funded program the Michigan Court of Appeals struck down in 2011. Started in 2002, the Low-Income Energy Efficiency Fund had provided energy assistance and energy efficiency to low-income customers. From 2002 through 2010, the MPSC distributed about $664 million in grants from the fund, with over $452 million of that targeted to low-income energy assistance.

Public Act 95 allowed utilities to opt out of participating in LIEAF. However, these utilities are prohibited from shutting off service to residential customers between November 1 and April 15. Utilities that opted out of collecting LIEAF this year include: Bayfield Electric Coop, Upper Peninsula Power, Wisconsin Public Service Co., We Energies, Cloverland Electric Coop, Great Lakes Energy Coop, Ontonagon County Rural Electrification Association, HomeWorks Tri-County Electric Coop, and Cherryland Electric.

Utilities that will participate in LIEAF include:

Michigan Municipal Electric Association indicated that only 14 of its 40 members will participate in LIEAF during the upcoming cycle .