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Judge to give opinion in Hillman-PIE&G case

April 10, 2008
Sean Harkins
On Monday, an administrative law judge is scheduled to give a non-binding opinion to the Michigan Public Service Commission regarding a case between the Village of Hillman and Presque Isle Electric and Gas Co-op.

After two years, the entities still have not been able to agree on a rate structure. The village claims PIE&G has violated its franchise agreement, while PIE&G contends it has not.

Village Manager Dave Post said the franchise agreement ties PIE&G rates to MichCon’s rates, and PIE&G wants to break that connection.

PIE&G President and CEO Brian Burns said its rates follow the franchise agreement.

“Our current rates to Hillman reflect and conform to the franchise agreement but our proposal before the commission is a variation that Hillman is not in favor of,” he said in an email.

The franchise agreement between the two has a home rule clause, meaning the franchisee — in this case Hillman — should have some say in the rates.

In its latest reply brief, the MPSC was critical of how PIE&G has handled the situation with Hillman and Allis Township, which is filing jointly with the village on the issue.

“Presque Isle is asking the commission to solve what they see as a process problem, that is really a relationship problem,” it states, later adding “The only failure is the failure of Presque Isle to negotiate just and reasonable rates with Hillman and Allis.”

Despite the criticism, the MPSC does offer a rate recommendation in the brief that is closer to what PIE&G proposed than what Hillman had proposed.

“We’re pretty pleased with what’s going on. We still don’t agree with what MPSC is asking for a rate,” Post said.

The MPSC recommended a distribution charge of 30.92 cents per Ccf and a gas rate charge of 94.08 cents per Ccf. PIE&G proposed a 31.84 cent per Ccf distribution rate and a 94.92 cent per Ccf gas rate.

Hillman requested lower rates, 27.84 center per Ccf for distribution and 87.54 cents per Ccf for gas.

Burns said while the judge is scheduled to make her recommendation, or proposals for decision, on Monday it may be postponed to gather more information.

He said the proposals are considered by the MPSC before it makes a decision on the case.

“In the end they issue an order and the PFD is part of the record,” Burns said, adding he wasn’t sure when the case would be settled.

Sean Harkins can be reached via e-mail at or by phone at 358-5688.


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