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HB 4978

Public utilities: electric utilities; distribution grid plans created by electric utilities; require. Amends sec. 6a of 1939 PA 3 (MCL 460.6a).

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

HB 4978 tightens Michigan utility rate oversight by requiring MPSC pre-approval for rate hikes, stronger filing requirements, staff coordination, hearings, and interim refunds.

bill electronically reproduced 09/17/2025
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Bill Summary · HB 4978

Summary of Michigan House Bill HB 4978

Overview

  • Bill: HB 4978
  • Title: Public utilities; distribution grid plans created by electric utilities; require. Amends sec. 6a of 1939 PA 3 (MCL 460.6a)
  • Purpose (implicit): Strengthen oversight of electric (and other) utilities’ rate actions by codifying more structured commission review, notice, and hearing requirements; introduce coordination with commission staff and timing safeguards for rate filings.
  • Status: Electronically reproduced September 17, 2025; introduced and referred to Committee on Energy (Rep. McFall and co-sponsors listed)
  • Introduced: March 13, 2025
  • Legislative actions timeline in document shows activity through September 2025

What the Bill Would Change

HB 4978 would amend section 6a of 1939 PA 3 to tighten processes around utility rate increases and related charges. Key thrusts include:
- Rate approvals require prior Michigan Public Service Commission (MPSC) approval before any rate increase or change that would raise costs to customers.
- Utilities must coordinate with MPSC staff before filing a general rate case to avoid scheduling conflicts with other utilities’ filings.
- For electric utilities serving more than 1,000,000 customers, MPSC may order a delay in filing to maintain a 21-day spacing between large utilities’ rate case filings.
- Utilities must place in evidence all facts relied upon to justify proposed rate changes.
- MPSC must notify all affected service-area interested parties and provide a reasonable opportunity for a full hearing.
- Utilities may use projected costs and revenues for a future 12-month period in developing proposed rates.
- MPSC must determine within 30 days whether a petition or application is complete; if not complete, MPSC will specify missing information; if not notified within 30 days, the application is deemed complete.

Notable Provisions (Procedural Details)

  • Partial and immediate rate relief: After filing a complete application (for gas utilities under 1,000,000 customers), a utility may file for partial and immediate rate relief. MPSC must issue a decision on such relief within 180 days; final order in the case must be issued within 12 months from the motion submission.
  • If MPSC does not issue an order within 180 days on a complete filing, the utility may implement up to the proposed annual rate change (via equal percentage increases/decreases) until the final order is issued. If projected costs/revenues were used, timing for implementation aligns with the start of the projected 12-month period.
  • Refunds for interim rate increases: If utilities implement interim increases before a final order, customers may be refunded the excess revenues with interest (5% plus LIBOR) and allocated among customer classes as directed by MPSC. Portions exceeding 25% of the final awarded annual revenue increase, excluding interest, may accrue at the utility’s authorized rate of return. Refunds/interest cannot be counted in subsequent rate increase filings.
  • Historical limitation: The subsection mentions applicability to completed applications filed before April 20, 2017, which appears to retain certain pre-existing transitional rules.
  • Fuel costs: Alterations to fuel/purchased gas/steam adjustments require notice and a hearing; automatic fuel adjustment clauses remain subject to separate notice/hearing requirements.

Who Is Affected

  • Electric utilities (especially those serving more than 1,000,000 customers) and gas utilities (particularly smaller utilities under 1,000,000 customers).
  • Michigan Public Service Commission (MPSC) staff and the public, via required notices and hearings.
  • Residential and business customers, who would see more formal processes, potential delays in rate changes, and specified refund protocols if interim rate increases occur.

Procedural and Timeline Aspects

  • Coordination: Utilities must work with MPSC staff before rate filings.
  • Spacing: Larger electric utilities may face a 21-day spacing requirement between filings.
  • Completeness: MPSC has 30 days to determine filing completeness.
  • Hearing: Mandatory for affected parties; opportunities for written and evidentiary input.
  • Relief and timing: 180-day window for partial relief decisions; 12-month final order target for such relief cases; interim rate changes possible if no final order within 180 days, with refunds if applicable.
  • Appeals/Remedies: The bill reiterates MPSC’s authority to issue show-cause orders and to approve modifications without notice in certain non-cost-increasing circumstances.

Status and Next Steps

  • Introduced and referred to Committee on Energy (as of September 17, 2025).
  • House actions listed show activity through September 2025; further committee hearings and floor votes would determine passage.

This summary highlights the bill’s intent to tighten oversight over rate increases, improve process transparency, and set clear timelines for review and potential refunds, while maintaining existing protections around fuel-adjustment mechanisms.

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

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