State regulators says Consumers Energy must explain why it hasn't refunded "unspent" tree trimming and plant maintenance funds

Consumers Energy has until month's end to explain to state regulators why it has not refunded its customers more than $14 million it collected but never spent on tree trimming and maintenance of its coal plants.

On Tuesday, the Michigan Public Service Commission directed the Jackson-based utility to explain why it should not be fined and found in violation of a 2005 order to refund customers if it did not spend required annual amounts on those efforts.

That order states Consumers has to spend at least $28.3 million annually on tree trimming and line clearing. If it did not spend that amount, it had to refund the difference to customers. The same order stated the utility had to spend $119 million annually on operation and maintenance of its coal plants. In January 2006, CMS Energy President and CEO David Joos and CMS Board Chairman Ken Whipple signed a letter to the MPSC agreeing to the terms.

In 2007, Consumers spent $6.5 million less than ordered on tree trimming and $7.6 million less on plant maintenance.

"To date, they have not refunded that to customers," MPSC Spokeswoman Judy Palnau said.

Consumers spokesman Dan Bishop said while it may not have spent the required amount in 2007, it spent $11 million more than it had to in 2006. He said the utility is on track to meet the level of the total expenditure that was expected.

"We believe our forestry and fossil operations and maintenance spending met the intent of the Commission's order," Bishop wrote in an e-mail. "Customers have received the intended benefits and, in fact, received them earlier than the Commission's order required. We don't believe a refund is appropriate."

Palnau said the utility underspent in other years as well, but Tuesday's order only used the 2007 figures as an example.

Consumers has until 5 p.m. Oct. 30 to respond to the MPSC's order. The utility also has to calculate the interest on any annual amounts it underspent in those categories from 2006 to 2008, and include a summary of forestry spending data for this year.

Palnau said there is no way to know at this point how much could be due to customers.

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