LANSING, Mich. – Sales of electricity in Michigan are expected to be down for 2019, according to the Michigan Public Service Commission's Michigan Energy Appraisal Summer Outlook 2019, released today. Also, natural gas consumption is projected to be higher from May through September compared to the same period in 2018.

Electricity sales are expected to decrease by 0.9 percent to 102.9 thousand gigawatt hours, according to the annual MPSC analysis of trends in the state's fuel and power sectors. That's down from 103.8 thousand gigawatt hours from the previous year. Residential sales are expected to drop 2.2 percent and commercial 0.6 percent. But industrial sales are expected to rise 0.3 percent. Consumption in the residential and commercial sectors is largely dependent on weather. If the summer is warmer than normal, then demand for electricity to power air conditioning could rise.

Natural gas demand is expected to rise 1.4 percent this year, due mainly to increased use for electricity production driven partially by January's polar vortex, according to the report. Higher than forecast temperatures this summer will also increase demand for cooling and electricity to run air conditioning. If prices remain at current levels, this year's average residential bill is expected to be $20 lower than last year due largely to falling U.S. prices.

Michigan drivers should plan to pay more for a gallon of gasoline this summer as demand for the fuel is expected to increase for the seventh year in a row. A gallon is expected to average $2.83 during the April through September summer driving period. The price of a gallon of diesel fuel is expected to be $3.20, down a penny from last year.

Other highlights from the MPSC's Summer 2019 Energy Appraisal:

Electricity

• This year's combined peak electrical demand plus planning reserve margin requirements are about 4 percent higher than was projected for 2018.
• In 2018, electrical demand peaked for Consumers Energy at 7,568 megawatts on July 5, and for DTE Energy at 11,418 megawatts on Sept. 5.
• The generation capacity required to serve the Lower Peninsula increased by 10.6 megawatts in 2019/20, compared to 2018/19. Generation capacity to serve the Upper Peninsula and eastern Wisconsin rose by 195 megawatts.
• This summer's peak demand plus reserve margin for the Lower Peninsula is expected to be 21,976 megawatts, up from 21,121 megawatts last summer.

Natural gas

• The average monthly residential summer bill for the four largest gas utilities – DTE Gas, SEMCO Energy, Consumers Energy, and Michigan Gas Utilities -- is projected to be approximately $34 for April 2019 through October 2019.
• A residential customer's annual gas bill for April 2019 through March 2020 is forecasted to be $754, which is down from $773 predicted for last year.
• Production from natural gas wells in the state continues to decline and is expected to decrease by 5.9 percent to 84.9 billion cubic feet in 2019.

Petroleum

• S. crude oil production averaged 10.96 million barrels per day in 2018 and is expected to increase to 12.45 million barrels per day in 2019 and to 13.38 million barrels per day in 2020.
• Absent unanticipated infrastructure or supply problems, it is expected that the price and supply of petroleum products will be stable for the remainder of 2019.

Gasoline

• Gasoline demand will be 4.73 billion gallons, up 1.5 percent from a year ago.
• With continued OPEC production curtailments and geopolitical risks in Iran and Venezuela, crude oil prices are likely to continue strengthening.

Weather

• MPSC's models assume normal temperatures, but the Climate Prediction Center indicates a slightly warmer than normal summer by 2.8 percent.
• In 2018, May through September temperatures were 37 percent warmer than normal. Heating season monthly temperatures were 1 percent below normal.

The MPSC has published a summer and winter energy appraisal every year since 1978.

For information about the MPSC, visit www.Michigan.gov/MPSC, sign up for one of its listservs, or follow the Commission on Twitter.

Now that the utilities have been cleared to expand their Value Added Programs and Services, such as the Appliance Service Program, the Michigan Public Service Commission is responsible for the implementation of the Code of Conduct. Utility competition will now become a very substantial threat to our industry.

MIACCA is committed to making sure our industry needs and concerns are represented so on Friday, May 24, 2019 MIACCA President Bill Krestakos, MIACCA Executive Director M.J. D'Smith, MIACCA members Doug Young of Behler-Young and Brad Bartholomew of Bartholomew Heating & Cooling along with MEECA Executive Director David Gard met with the Michigan Public Service Commission Chairman Sally Talberg and her staff to address these important issues:

1. Value Added Products and Services (VAPS)
a. Currently no rule or directive as to classifying information as confidential

2. DTE/Consumer Annual Reports a. Unredacted Reports to be public

3. Code of Conduct Section 2 under 460.10ee
a. Who decides if the new product or service offerings will harm or unduly restrain free trade in an unregulated market?
b. What is the process to challenge a regulated utilities product or service offering prior to that offering?
c. How cost prohibitive or restrictive will that process be?

4. Energy Ombudsman Vacancy 
a. Who is going to ensure compliance with the Code of Conduct?

5. Midstream Rebates on Residential HVAC

The meeting was very well received by the MPSC staff and Chairman Talberg is already in the process of addressing these issues:

1) Ensuring transparency for stakeholders of new value-added program filings and annual reports so there is awareness and easy access by contractors/stakeholders;

2) Staffing to ensure adequate review of utility filings and overall compliance with code of conduct;

3) Clarify what can and cannot be filed as "confidential" for purposes of filings under COC

4) Ascertaining better understanding of utility plans for offering value-added services or products.  

MIACCA has offered any assistance that we can to help the MPSC address these issues in order to protect our industry.

This is just another way that we continue working hard for our members.

In order to make the e-mail size smaller, attached are links to articles provided for you by Federated Insurance designed to be short awareness pieces for member education:

 

Risk Management Corner – Property/Casualty and/or Workers Compensation subjects

HR Question of the Month – a Human Resources-related question and answer from independent HR legal professionals

It’s Your Life – concepts related to Life and Disability insurance

 

You will find each Risk Management Corner and It’s Your Life article listed with the most current first. You can share the post directly by utilizing the post URL or use the PDF and/or JPG at the bottom of the post for your specific needs.  The HR Question of the Month will be replaced each month with a new question/answer.

 

We hope you will share them with your members via links on your website, direct e-mails, e-newsletter, and/or in your print publication by also sending to your direct publisher if required.

 

As you consider how to best use these articles, please be sensitive to the fact that these are copyrighted materials and must include all copyright, disclaimer, source/cite, and corporate ID information when reproduced in any electronic and/or print medium. If you have questions, please contact your Federated Account Executive.

 

Federated Insurance appreciates our relationship both with your association and your members. We look forward to continuing to work with you to provide your members with the very best insurance and risk management services!

U.S. trade negotiators have reached a deal with officials from Canada and Mexico to lift the 25 percent steel and 10 percent aluminum tariffs on imports from those countries. The steel and aluminum tariffs have been a sticking point from Congressional leaders in trying to get the U.S., Mexico, Canada Agreement (USMCA) approved by Congress, however removing the tariffs does not guarantee the measure will be approved this year. The tariffs will no longer be applied to imports from Canada and Mexico starting over the weekend. Some trade policy experts were worried the deal would cap the amount of imports from Canada and Mexico, however the final deal does not contain quotas. The deal does require both countries to prevent other countries, especially known dumpers of cheap steel and aluminum, from sending product through Canada and Mexico to avoid the tariffs. The addition of tariffs on steel and aluminum put in place last year has increased prices on many HVACR products and caused retaliatory tariffs from our trading partners. With the removal of the tariffs from our largest source of steel imports, we are one step closer to returning to price stability that has been interrupted by various trade disputes in recent years. As always, feel free to reach out to Alex or me if you have any questions about this process or the tariffs themselves.  Palmer Schoening Vice President of Government Affairs

As part of your MIACCA membership, please enjoy this free webinar from Federated Insurance.

Screening, Hiring, and Retaining Employees

Tuesday, May 21, 2019 (2 PM ET) 45 minutes | Complimentary |

Advanced registration required

A company's hiring and employee retention practices communicate a lot about its culture. Many employers agree that bringing qualified applicants into their business is one of their primary challenges, and today's competitive employment market can make it even harder to land top talent. This discussion focuses on finding quality applicants in your industry and establishing strong and consistent hiring practices, and reinforces the value of continuous recruiting and employee retention to distinguish you as an employer of choice.

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LARA's Bureau of Construction Codes celebrates 2019 theme: 
No Code. No Confidence.

May 2, 2019 – Gov. Gretchen Whitmer has issued a proclamation declaring May 2019 as Building Safety Month in Michigan. This year's theme, "No Code. No Confidence." reaffirms the value and importance of construction codes, state registered code officials and a strong system of code enforcement to protect the public. LARA's Bureau of Construction Codes (BCC) works to ensure that homes and buildings constructed throughout Michigan are safe, sound and sustainable.

"Construction code officials are here to help consumers understand building safety issues," said LARA Director Orlene Hawks. "Especially with do-it-yourselfers, it becomes extremely important for homeowners to work with their building inspectors to make sure their new home or remodel fully complies with Michigan's construction codes."

Code officials including boiler, building, electrical, elevator, fire prevention, plumbing, and mechanical inspectors, along with architects, engineers, builders, tradespeople, and others in the state's construction industry work together to ensure code compliance that address safety, energy efficiency, and resilience in homes, schools, workplaces and other structures to protect lives and property.

"Construction codes address all aspects of building including boilers, elevators, structural integrity; electrical, mechanical, and plumbing systems; and fire prevention, as well as pre-manufactured home construction," said BCC Director Keith Lambert. "Through a coordinated program of code compliance, investigation and training, there is consistent application of standards to protect the public."

Celebrated worldwide, Building Safety Month is sponsored by the International Code Council, a membership association dedicated to building safety, fire prevention, and energy efficiency. LARA uses national and international standards as the basis for model codes, and through Michigan amendments develops Michigan construction codes which are enforced throughout the state. The model codes are the most widely adopted building safety, energy, and fire prevention codes in the nation -- used by most U.S. cities, counties, and states.

In the matter of the application of Consumers Energy Company for approval of a Group Transportation Service Pilot Program,MIACCA has submitted comments stating "that transportation customers will benefit from pooling through reduced costs and imbalance fees, expanded flexibility, and increased supplier options as pooling reduces costs for the supplier and ultimately the customers."

"In a pooled environment, the scheduler can manage several utilities and submit one nomination for the entire pool, instead of one for each customer. By reducing the overhead to accomplish the scheduling and balancing functions, then that cost savings will ultimately be passed on to the customers in the form of more competitive pricing." 

MIACCA respectfully requested that the commission support and approve the pooling program. 

MIACCA had the opportunity to sit down with the new Michigan Licensing and Regulatory Affairs (LARA) Director, Orlene Hawks, along with Keith Lambert, Director, Bureau of Construction Codes (BCC) and Marnie Wills to discuss some important HVACR issues last week.  The conversation included:

1. Statewide Mechanical Permit.  As you know, MIACCA is hoping to introduce a statewide permit to the Construction Codes Commission (CCC).  At the meeting, it was well received and we were recommended to reach out to the Michigan Township Association and Municipal League and work with other industries that utilize the permit in hopes of support to get this back on the agenda.  In the long run, following the State permit will benefit contractors and the State alike.

2. Utilizing the Skilled Trades Regulation Act (STRA)  boards as experts.  MIACCA reiterated the importance of using the expertise of the various boards for their opinions on rule changes.  It was expressed that they were going to do so.

3. STRA Complaints.  Only one of the 187 complaints filed last year were able to have follow through on due to the lack of documentation in the complaints.  MIACCA will be working with Keith Lambert on providing a PowerPoint presentation on the correct way to file complaints to our members soon. 

4. Communications.  LARA is going to revive their quarterly newsletter, CodeWorks   Director Hawks has a goal of having more transparent moving forward.  MIACCA will forward their newsletter and continue sending any LARA updates to our membership.

5. Value Added Programs and Services (VAPS):  Director Hawks is setting up a meeting with Michigan Public Service Commission (MPSC) Chair, Sally Talberg to discuss our concerns the Code of Conduct and utilities offering their VAPS.

6. Make ACCELA more functional for consumers.  Currently LARA's ACCELA program (https://aca3.accela.com/lara) for mechanical license lookup only returns results for the company who has notified the Bureau in accordance with STRA Sec. 809(2) and does not return results for companies who have filed a "Certificate of Assumed Name" with the Corporations, Securities & Commercial Licensing.  However the Bureau is accepting this filing by a company that at any time (even if the certificate of assumed name has expired) as complying with STRA Sec. 809(2) even though the assumed name company does not show up in the ACCELA search results.  We were informed that Director Hawks was meeting with the ACCELA to discuss many of these issues.

MIACCA is working to strengthen our relationship with LARA, the BCC and various STRA boards and the CCC to help protect and inform our industry on the legislative issues that concern our.  Please feel free to send any issues or concerns that you would like addressed to mjdsmith@miacca.org.

As we continue growing our member network, MIACCA is pleased to welcome our newestassociate member,Michigan Saves—a nonprofit organization dedicated to making energy improvements easy and affordable for all Michigan energy consumers. Unique in its authorizednetwork of energy-efficiency and renewable energy system contractors.  Members gain exclusive rights to offer Michigan Saves financing to their customers with a portfolio that includes programs for residential, commercial, and municipal customers.  Joining this network offers contractors a convenient, 24-7 way to stand out from their competitors by allowing them to direct their customers to participating lenders that provide unsecured, low-interest, and longer-term loans online and by phone receiving a decision within minutes.  One of our very own contractor members—Schaafsma Heating and Cooling—is a Michigan Saves authorized contractor that has enjoyed an average sale increase while helping their customers make affordable energy improvements. In the opinion of Bill Krestakos, MIACCA's president and Schaafsma's vice president, joining the Michigan Saves contractor network has been a smart business decision that's helped Schaafsmaincrease its revenue while adding significant value to its existing services. "Michigan Saves financing has been very effective and easy to use, allowing us to close more business at a higher price," said Krestakos. "At the same time, we're able to help people who aren't necessarily prepared to buy a new furnace or needed equipment, and that's where Michigan Saves financing makes it possible for customers to afford it." Visit them today at michigansaves.org

In the matter of the application of Consumers Energy Company for approval of a Group Transportation Service Pilot Program, MIACCA has submitted comments stating "that transportation customers will benefit from pooling through reduced costs and imbalance fees, expanded flexibility, and increased supplier options as pooling reduces costs for the supplier and ultimately the customers."

"In a pooled environment, the scheduler can manage several utilities and submit one nomination for the entire pool, instead of one for each customer. By reducing the overhead to accomplish the scheduling and balancing functions, then that cost savings will ultimately be passed on to the customers in the form of more competitive pricing."

MIACCA respectfully requested that the commission support and approve the pooling program.