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MI Low-Income Funds Could Disappear Due to Court Decision

August 22, 2011 -- Thousands of Michigan households are likely to have more trouble paying their heating bills this winter because of a recent court decision that outlawed a $90 million state assistance fund, used primarily to provide energy assistance to the state’s low income.

Ruling July 21 in a suit filed by major utility customers and former Michigan Attorney General Mike Cox, the state Court of Appeals said the Michigan Public Service Commission (PSC), which regulates utilities, no longer has authority to maintain the fund and disburse money from it to agencies that assist the needy, such as The Salvation Army and the state LIHEAP office.

Since 2002, the PSC has paid out more than $500 million through the Low Income and Energy Efficiency Fund (LIEEF), most of it to help people pay heating bills, but also some for weatherizing homes and energy-saving projects for all customer classes. (For more information on LIEEF history in Michigan, see the LIHEAP Clearinghouse.)

The commission had committed to the distribution of $80 million to various agencies on Oct. 1, the start of the state fiscal year, but is now blocked by the court decision from using the money.

The LIEEF money has been built into rate-increase cases for the state’s largest utilities, which may now be entitled to a refund.

“The well-known and respected organizations that have received millions of dollars in grant money from the LIEEF — such as the Salvation Army, the Heat and Warmth Fund, Michigan Community Action Agencies, the Michigan Department of Human Services and others — will soon have to turn away people who come to them for help with utility bills,” PSC Chairman Orjiakor Isiagu wrote in an opinion column.  .

The Appeals Court ruling came in a Michigan Consolidated Gas Co. rate case. The court said that because utility legislation enacted in 2008 made no reference to the LIEEF program set up in a law passed in 2000, the Legislature implicitly intended to halt authorization for it.

PSC officials say the LIEEF program could be salvaged by legislation that specifically reauthorizes it, or through an appeal to the state Supreme Court.

Source: Detroit Free Press, Michigan PSC