LawRefs Customized Legal Information
Attorney Renee C. Walsh

Public Utilities and Consumer Rights – Michigan

Did you know that Consumers Energy can transfer a debt from another consumer’s account to yours and if payment is not made, a shut off notice will follow? What should you do you do in this situation? The public utilities are governed by several different laws in respect to this situation. Where a debt is being collected, the Federal and Michigan Fair Debt Collection Practices Acts apply specifically. There are also Michigan Compiled Laws and Public Service Commission Rules which apply to public utilities applying residential services.

Chapter 460 of the Michigan Compiled Laws applies. The Public Service Commission promulgates rules for the conduct of the service providers and any person dealing with the Commission or interested in a matter or proceeding pending before the Commission is bound by those rules. MCL 460.557 requires that all written complaints be investigated, noticed and allowed for hearing. Administratively, customers with utility disputes should refer to Laws, Administrative Rules, Guidelines and Decisions. There are rules for billing, requiring deposits, processing complaints, debt collection and shut off of service. Some noteworthy rules are those setting forth prohibited practices.

As a practical matter, a consumer might have the experience to have another person’s debt transferred to their bill. Rule 460.120 prohibits any attempt to recover from any person any outstanding bills or other charges due upon the account of any other person, unless that other person has entered into a lawful guarantee or other agreement to pay those bills and charges.

Also Part 8 of the Rules provide for shut off of service. Under 460.137(h), if a current member of the customer’s household has not paid a delinquent account for service that is not in dispute and that is owed by that person, shut off is permitted if the customer lived at the same residence served by the utility at the time that all or part of the debt was incurred by the current member of the customer’s household. This would apply in a situation where, for example, adult siblings lived together and received service as to which the account went delinquent, and then later moved to a new residence and put the service account in the non-delinquent account holder’s name to avoid payment.

If a customer disputes a bill, the shut off must not occur until the dispute is resolved. The utility company must offer the customer the opportunity for a hearing, which is a hearing by a hearing officer with the opportunity to be represented by counsel, present evidence and examine witnesses. Settlements can be entered as in any other lawsuit, and if subsequently defaulted, then shut off can occur. Appeal from an unfavorable decision is to the Public Service Commission and there are procedures for both a formal appeal and informal appeal.

Discussion:

  1. I have had billing issues with consumers energy reapplying already paid balances back to the account and charges that are not verified by any bill. Was told I could request a hearing. Do I need a lawyer or advocate for this hearing? What are my rights in this situation?

    • Dear Mark:

      Consider disputing the bill in writing and letting them know that you will be bringing the matter formally via a complaint with the Michigan Public Service Commission if they continue their collection efforts. You have the right to have an attorney at the hearing.

  2. I am being charged for a delinquent water/sewer bill on my Winter taxes for the City of Detroit. It is a commercial property and has not had water service for a number of years and in fact has no water service or meter. Is it legal for me to be held responsible for someone else’s irresponsibility in paying their bills? I am not a current resident of Michigan and am not familiar with the law regarding this matter. Thank you for your time.

    • Dear Christy:

      Consider putting your dispute in writing with a copy to the Michigan Attorney General’s Office. Somehow they have your name connected to the property and that link is crucial to an assessment of the facts/issues.

  3. I was evicted from my mothers’ condo co-op. When I called Westland Water the next day to turn off the water, they informed me that they “do not control that; the condo park does”. The bill is dated 7 days AFTER I requested shut off. How can the condo park 1) be untimely AND 2) ungoverned on this while 3) they employ their own “maintenance dept.”; and why would it take 7 days?

    • Dear Vanessa:

      Consider writing a letter to the condo association referencing the bill and telling them that you dispute the charges as you requested shut off (hopefully you contacted the condo association and requested shut off). Once you have put your dispute in writing, you can attempt an Accord and Satisfaction paying only a reduced amount.

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