Articles

New Michigan Utility Shut Off Statutes: What You Need to Know

December 16, 2013      |      Jeffrey K. Bearss, Esq.

This year Michigan enacted a number of new utility statutes which have set forth new, specific procedures for the shutting off of utilities to residential customers under a variety of different scenarios.  The following is a summary of the new statutes and a discussion of procedures to follow to avoid running afoul of these new laws. 

Customer On Active City in Military: Shut Off Protection

A new statute, MCL 460.9c, states that a provider of electric or gas service shall not discontinue the service to the residence of a qualifying customer who is on active duty in the military.  A qualifying customer1 may apply for shut-off protection for electric or gas service by notifying the utility that s/he is in need of assistance because of a reduction in household income as the result of a call to active duty status2 in the military.  A qualifying customer can receive shut-off protection from the utility for up to 90 days.  The utility must grant the qualifying customer 1 or more extensions if the customer has provided proof of active duty.  The qualifying customer still has to pay for the utility service s/he has received during the shutoff protection period.  Under this new statute a utility is required to do all of the following in the event of a customer called to active duty if the qualifying customer requests shutoff protection with valid documentation:  (a) Establish a repayment plan up to one year; (b) Provide information on assistance programs; and (c) Provide information on conserving usage.  Its purpose is to protect our servicemen and women from added financial stress during their deployments.  What this means for utility providers is that they will have to perform a search for active service members under the SCRA (Service member Civil Relief Act) within customer accounts to make sure that no disconnect is scheduled for qualifying customers who are in the military, due to the larger number of military personnel that have been deployed in recent years.    

Shut Off Due to Unauthorized Use 

MCL § 460.9d covers the unauthorized use of utilities that cause an unsafe connection.  It also details actions that can be taken by the utility, and discusses reestablishment of service; where property is abandoned or surrendered.    A utility shall re-establish service if the person requesting service does one of the following:

  • (a) Proves that the person is the legal owner of the property by providing property ownership information and, prior to reconnection of service, pays for the actual cost to repair the utility's equipment and facilities, and fees and charges; or
  • (b) Proves that the person is the legal owner of the property by providing a signed lease agreement certified by the landlord that establishes the identity of the tenant responsible for the prior unauthorized use.

This becomes an issue with a location where there were multiple prior occurrences of unauthorized use.  An interesting feature of the new statute will help landlords, in that it provides that utilities serving 1,000,000 or more customers shall establish and maintain a service in which landlords of rental properties are notified of locations where electric and natural gas services have been shut off because of unauthorized use.  What this means for utility providers with a customer base of 1,000,000 or more is that they need to establish and maintain some identifier to earmark locations where there have been multiple prior occurrences of unauthorized use in the past.  It also establishes that a customer who want reconnection to provide proof of ownership and a copy of the signed lease agreement, providing better skip tracing opportunities for utility providers when the customer fails to pay an account.  

Shut Off Resulting in Death or Serious Injury

MCL § 460.9m covers service shutoff resulting in death or serious injury  It requires a utility to notify the MPSC of any shutoff of service that results in death or serious injury, including the procedures followed during the shutoff.  The commission may investigate any shutoff of service by a utility that results in death or serious injury. The MPSC may refer the matter to the attorney general for commencement of a civil action under section.  This means that utility providers will have to notify the MPSC of any shutoff that results in death or serious injury.  The purpose behind the statute is that the MPSC wants to make sure that the utility has complied with all of the new notice requirements that may prevent serious injury to customers in event of shutoff. 

Identification of Senior Citizen Customers

MCL § 460.9o covers identification of senior citizen customers.  It states that a utility shall make efforts to identify senior citizen customers by at least 1 of the following methods: (a) Customer interview; (b) Obtaining information from a consumer reporting service; (c) A telephone call with direct contact made with a member of the customer's household; (d) First-class mail; (e) A personal visit to the customer; (f) A written notice left at or on the customer's door; (g) A bill insert; or (h) Any other method approved by the commission for regulated utilities.  What this means for utility providers is that they will have to scrub their account databases for customers who are senior citizens.  The purpose behind the statute is that the MPSC wants to make sure that utility providers comply with all of the new notice requirements that may prevent serious injury to seniors in event of shutoff.  Therefore, knowing the age of customers is critical. 

Notice Requirement for Shut Off; Vulnerable Household Warmth Fund

MCL § 460.9q covers new notice requirements for shut off or termination of service, and establishes the Vulnerable Household Warmth Fund.  A utility may shut off service if the customer has not paid a delinquent account that accrued within the last 6 years.  It states that a utility shall not shut off service unless it sends a notice 10 days before the date of shutoff.  It further provides that a utility shall allow a payment plan for an amount owed to the utility that is not in dispute, if a customer claims an inability to pay in full. 

A notice of shutoff must contain all of the following information: (a) The name and address of the customer, (b) Reason for the shutoff, (c) Date of shut off, (d) Statement of the right to enter into a payment plan for any amount not in dispute, (e) Telephone number and address of the utility, (f) That the utility will postpone shutoff in the event of medical emergency, (g) That the utility will postpone shutoff for an eligible low-income customer that enters into a winter protection payment plan if the customer provides documentation that s/he is actively seeking assistance from an energy assistance program, and (h) The energy assistance telephone number at the department of human services or an operating 2-1-1 system telephone number. 

For an involuntary shutoff, at least 1 day before shutoff of service, the provider shall make at least 2 attempts to contact the customer by 1 or more of the following methods: (a) A telephone call where direct contact is made with a member of the customer's household, (b) First-class mail, (c) A personal visit to the customer, (d) A written notice left at or on the customer's door, (e) Any other method approved by the commission.

MCL 460.9q further states that a provider shall not shut off service for any of the following reasons:

  • (a) The customer has not paid for concurrent service received at a separate metering location;
  • (b) The customer has not paid for service at a premises occupied by another person.

What this means for utilities is that the statute is basically building in safeguards in the notice process to protect its customers.  We can examine the shutoff notices for our utility clients to make sure they are in compliance.

MCL § 460.9q also creates the new The Vulnerable Household Warmth Fund within the Michigan state treasury.  Money in the fund at the close of the fiscal year is refunded, based on the rate schedules in effect when the money was collected, proportional to the amount paid by each rate schedule.

Money from the fund is used to provide payment or partial payment of bills for electricity, natural gas, propane, heating oil, or any other type of fuel used to heat the residence of a vulnerable customer. A payment can be in the form of a voucher or direct payment to the utility.  The Vulnerable Household Warmth Fund will create an additional source of payment that will be available to customers and ultimately, utilities. 

Municipally Owned Utilities Shut Off

The following statute governs the shut off of service by municipally owned utilities, which is MCL § 460.9r.  A municipally owned electric utility cannot shut off service to a customer during the heating season for nonpayment if the customer is an eligible senior citizen.  It also cannot shut off if a customer and the utility mutually agree upon a winter protection payment plan.  The eligible customer also has to show that s/he has applied for state or federal heating assistance.  If a customer fails to comply with the terms of a winter protection payment plan, a municipally owned electric utility may shut off service after giving notice.  This is a special statute that applies to municipally owned utilities.  Utility providers therefore cannot shutoff service to senior citizens during the heating season, or if they are in a winter protection payment plan.  Again knowing the age of the customer is critical. 

New Rules on Life Support Accounts

MCL § 460.9s states that a provider must postpone shutoff up to 21 days if the customer is a critical care customer or has a certified medical emergency.  For example, a customer on oxygen or other life-support equipment.  The customer has to certify the medical condition, the life-supporting equipment being used, certify that an interruption of service would be immediately life-threatening, and the time period during which the shutoff of service will aggravate the medical emergency.  The utility must extend the postponement of shut off up to 21 days, which can be renewed up to a total of 63 days.  A utility is not required to grant extensions totaling more than 126 days per household per year. 

Thus utility providers must postpone shutoff of customers who are on life support.  In some instances, customers may abuse the system and use certain qualifying life support systems as an excuse to maintain service without payment.  While a disconnect may be a problem, understand civil action can still be filed with an active account, to reduce the claim to judgment and commence post judgment attachment of any non-exempt assets. 

New Low-Income Energy Assistance Fund

The new Low-Income Energy Assistance Fund is created by MCL § 460.9t.  It also creates a low-income energy assistance "funding factor" (similar to a tax).  The "funding factor" is the same across all customer classes and does not exceed $1.00.  A utility that collects money under this "funding factor" remits this money to the state treasurer for deposit in the fund on a monthly basis.  The utility lists the low-income energy assistance funding factor as a separate line item on each customer's bill.

A utility may elect to not collect a low-income energy assistance funding factor.  However, there is a catch.  An electric utility that elects to not collect a low-income energy assistance funding factor under this section cannot shut off service to any residential customer from November 1 to April 15 for nonpayment of a delinquent account.  MCL § 460.9t.

An electric utility, that does not opt out, (i.e. collects the funding factor) must annually provide to the MPSC the number of retail billing meters it serves in Michigan that are subject to the low-income energy assistance funding factor.  MCL § 460.9t.

This is only a summary of the changes.  For a complete copy of the statutes, please contact us.  If you have questions about utility shutoff, it is important to discuss the matter with legal counsel.


1 Pursuant to MCL§ 460.9c, a "qualifying customer" means all of the following: (a) A residential household where the income is reduced because the customer, or the spouse of the customer, is called to full-time active military service by the president or the governor during a time of declared national or state emergency or war; (b) Assistance is needed by the residential household to maintain electric and gas service; (c) The residential household has notified the utility of the need for assistance and, has provided verification of the call to active duty status. 
2 A utility may request verification of the call to active duty status from the qualifying customer.