5. If MCL 24.232(9) applies and the proposed rules are more stringent than the applicable federal standard, either
the statute that specifically authorizes the more stringent rules or a statement of the specific facts that establish
the clear and convincing need to adopt the more stringent rules and an explanation of the exceptional
circumstances that necessitate the more stringent standards is required.
The proposed rules are not more stringent than any applicable federal standard.
6. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.
The proposed rule revisions are intended to allow for modern methods of information storage and to avoid needlessly
lengthy storage timeframes, thus reducing the regulatory burden for Michigan utilities. Electronic storage of
information was in its early stages in 1980 (the date of the last rules revision). Advances have taken place. For
example, cloud storage did not exist in 1980, but is now commonplace. Certain types of storage (punch cards, for
example) are no longer used, but remain included in the rules that are currently in force. The Commission seeks to
eliminate rules pertaining to obsolete media, and to reduce retention times (where appropriate) so that they are
consistent with FERC rules (where appropriate), add clarity to the regulations, and meet modern regulatory needs.
A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.
No change in frequency of document storage is expected. Utility companies will be required to retain records as they
always have been; however, the companies will be able to dispose of certain types of records sooner, should they
choose to do so.
B. Describe the difference between current behavior/practice and desired behavior/practice.
Currently, the rules address the retention of obsolete media (i.e. punch cards, paper and card stock, magnetic tape,
etc.). The proposed rule revisions eliminate these references. The current rules require extraordinarily long retention
times for some records. For example, R 460.2520(a)-(d) require retention of general ledgers for 50 years. This length
of retention is not consistent with modern accounting and regulatory practices. The Commission is proposing a
retention timeframe of 10 years.
C. What is the desired outcome?
The desired outcome is to allow for modern information storage and to avoid needlessly lengthy storage timeframes.
7. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood
that the harm will occur in the absence of the rule.
Currently, the rules provide for climate-controlled, physical storage of paper and other media documents. The
proposed rule revisions provide for electronic storage and, in some cases, a shorter retention time. Utility companies
should be able to reduce or eliminate brick-and-mortar storage facilities, thus reducing the costs of maintaining the
storage space and, possibly, freeing the space for more efficient use. It is envisioned that electronic storage of
information will allow personnel to retrieve needed documents quickly and efficiently, rather than searching through
indexes and then file cabinets. It should be noted that the proposed rule revisions do not require electronic storage, but
provide for the opportunity should the company choose to do so.
A. What is the rationale for changing the rules instead of leaving them as currently written?
The current rules are outdated and do not take into account modern accounting and regulatory practices.
8. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting a
regulatory environment in Michigan that is the least burdensome alternative for those required to comply.
The proposed rule revisions are expected to have little, if any, effect on the health, safety, and welfare of Michigan
citizens. The primary effect is expected to be that regulated utility companies may experience a simplified, less
burdensome process of information storage and retrieval for Commission-related regulatory activities.
9. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.
R 460.2505(3) and (4) are being deleted. Proposed rescissions are: R 460.2505a, R 460.2505b, R 460.2505c, and R
460.2568(b). Each of these rules require the retention of records via media that is considered obsolete, such as punch
cards and microform, or address an area (water) that the Commission no longer regulates.
10. Please provide the fiscal impact on the agency (an estimate of the cost of rule imposition or potential savings
for the agency promulgating the rule).
The Commission does not anticipate any additional expenditures or savings.
11. Describe whether or not an agency appropriation has been made or a funding source provided for any
expenditures associated with the proposed rules.
No appropriations or funding sources are required because the Commission does not anticipate that the proposed rule
revisions will result in any additional expenditures.