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HB 4976

Public utilities: consumer services; prohibition for an electric utility to reclaim revenue they were required to pay in service outage credits; provide for. Amends sec. 6a of 1939 PA 3 (MCL 460.6a).

2025-2026 Regular Session Introduced by Erin Byrnes and 20 co-sponsors

Michigan bill prohibits electric utilities from recovering revenue paid as mandatory service outage credits to consumers, enforcing penalties for service failures.

bill electronically reproduced 09/17/2025
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Bill Summary · HB 4976

Legislative bill overview

HB 4976 amends Michigan's Public Utilities Act to prohibit electric utilities from recovering or "clawing back" revenue they were required to pay out as service outage credits to consumers. The bill prevents utilities from recouping these mandated payments through rate adjustments or other financial mechanisms.

Why is this important

Service outage credits are compensation utilities must provide when they fail to maintain adequate service. This bill ensures those credits remain a genuine cost to utilities rather than allowing them to pass the expense back to consumers through higher rates, which would effectively nullify the penalty's intended deterrent effect.

Potential points of contention

  • Utility operational costs: Utilities may argue that preventing revenue recovery increases their operational burden and could affect system maintenance investments or service reliability improvements
  • Rate design complexity: The amendment could complicate rate-setting proceedings and create disputes over what constitutes prohibited "reclamation" versus legitimate cost recovery
  • Consumer impact debate: Supporters see this as consumer protection; opponents may contend it increases costs indirectly through reduced utility efficiency or deferred infrastructure improvements
  • Regulatory interpretation: Ambiguity around how the prohibition applies to different utility cost structures and accounting methods could lead to enforcement disputes

Compiled from official sources — confirm details with the bill’s official record.

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