A local electric cooperative in northern Michigan said the city of Petoskey was "poaching" their customers, but a decision made on Feb. 17 by the Michigan Court of Appeals sided with the city.
Great Lakes Energy Cooperative sued the city and claimed they were breaking the law by providing energy to newly built homes on land that was outside of the city's typical service area.
The city's attorney, Nolan Moody said the co-op was providing electricity to a garage on that same land.
"Because they were already serving that garage, they said, we get to serve everybody else that comes on that parcel. That was their argument," Moody said.
Great Lakes Energy was citing a regulation enforced by the Michigan Public Service Commission called the "premises rule."
Katie Abraham, the executive director of the Michigan Municipal Electric Association, said the rule doesn't apply to city-owned utilities.
"The plaintiffs in this case, we're trying to get the premises rule to protect them, but it wouldn't protect us," Abraham said.
Abraham added that municipal energy is held to different standards than bigger investor-owned utility (IOU) companies because they serve a fraction of customers.
"It's not an even playing field," Abraham elaborated. "It wouldn't be fair if anytime we're dealing with a co-op or an IOU, it just gets to apply to them. They'd just get all those customers."
Great Lakes Energy also argued that the city of Petoskey broke a different Michigan energy law by "poaching" their customers.
Moody said the homes in question weren't considered customers of the co-op because they were brand new.
"If it's a new customer, which means a new building, we can serve it," Moody said. "We don't have an obligation to remove ourselves from an entire parcel like MPSC regulated utilities do. And the court agreed with that."
The Michigan Court of Appeals decision said the city of Petoskey was within their rights to provide energy on the same land as the co-op.
Great Lakes Energy Cooperative declined to comment on this story.
