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Legal Memorandum: Retirement of Long-lived Assets in MI

Issue: What are the legal obligations for the retirement of long-lived assets for a public utility company in Michigan?

Area of Law: Environmental Law
Keywords: Public utility operators; Abandonment of a long-lived asset; Legal Obligations
Jurisdiction: Michigan
Cited Cases: None
Cited Statutes: Mich. Comp. Laws § 483.153 (2008), § 460.551, et seq; § 460.704; § 460.708; Mich. Admin. Code r. 460.20501 (2008); Detroit, Mich., Code § 42-1-16 (2008); § 42-2-5; Flint, Mich., Code § 37-4 (2008); Grand Rapids, Mich., Code § 4.8 (2008); Ann Arbor, Mich., Code § 47:4:8 (2008); Livonia, Mich., Code § 12.04.220 (2008); Westland, Mich., Code § 90-9 (2008); Dearborn, Mich., Code § 17-131 (2008)
Date: 12/01/2008

Any person operating a pipeline to transport gas is under the jurisdiction of the Michigan Public Service Commission and must maintain its pipelines as the Commission requires.  Mich. Comp. Laws § 483.153 (2008).  The Commission also regulates the transmission of electricity under Chapter 460 of the Michigan Statutes.  See id. § 460.551, et seq.  Neither chapter contains explicit provisions for retiring individual assets or plant facilities. 

Chapter 460 of the statutes is concerned with the protection of underground facilities, and includes Michigan’s One-Call Program, MISS-DIG, which requires any person or agency desiring to dig or excavate an area to refrain from doing so before ascertaining the location of any underground public utility facility.  In order to facilitate that process, utilities are required to identify the location of their underground facilities.  There is no distinction made between active, inactive or abandoned facilities.  See id. § 460.704.  A public utility must respond to inquiries related to underground facilities that are "owned or operated" by the utility.  Id. § 460.708.  This choice of wording arguably extends to all equipment, including non-operational facilities, as long as the utility owns the equipment. 

Michigan Pipeline Safety is addressed in Chapter 483.  The provisions make no distinction between active and abandoned pipelines.  The administrative regulations that complement the pipeline safety are included as part of the Michigan Gas Safety Standards and are available on line here from the Michigan Public Service Commission.  In general, the regulations promulgated are identical to those […]

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