Great Lakes Energy Cooperative v. City of Petoskey

CourtMichigan Court of Appeals
DecidedFebruary 17, 2026
Docket372750
StatusPublished

This text of Great Lakes Energy Cooperative v. City of Petoskey (Great Lakes Energy Cooperative v. City of Petoskey) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Great Lakes Energy Cooperative v. City of Petoskey, (Mich. Ct. App. 2026).

Opinion

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

GREAT LAKES ENERGY COOPERATIVE, FOR PUBLICATION February 17, 2026 Plaintiff-Appellant, 10:50 AM

v No. 372750 Emmet Circuit Court CITY OF PETOSKEY, LC No. 24-108391-CZ

Defendant-Appellee.

Before: SWARTZLE, P.J., and MALDONADO and ACKERMAN, JJ.

MALDONADO, J.

Plaintiff, the Great Lakes Energy Cooperative, appeals by right the trial court’s order granting defendant, the City of Petoskey, summary disposition under MCR 2.116(C)(10) (no genuine issue of material fact). On appeal, plaintiff contends that the trial court erred because MCL 124.31 prohibits defendant from providing electricity to a new housing subdivision on a parcel of land on which plaintiff already provides electricity to another building. We affirm.

I. BACKGROUND

Plaintiff is a member-owned electric cooperative that has provided electricity in Emmet County, including Resort Township, since 1938. Defendant has a nonexclusive franchise to provide electricity in Resort Township. In this way, Resort Township allows both parties to provide electric service within its borders. In April 2024, nonparty Midwest Properties asked defendant to provide electricity to nine new residential homes in a new subdivision that it was developing outside defendant’s corporate limits. The parties agree that the land on which the subdivision rests, a small portion of Parcel 200-032, was vacant for at least three years before its development. However, plaintiff had supplied electricity to a garage located on Parcel 200-032, outside of the subdivision. Plaintiff argued that MCL 124.3 (which creates a “no switch” rule)

1 MCL 124.3 is a statutory provision within the intergovernmental contracts between municipal corporation act, MCL 124.1 et seq.

-1- when read together with Michigan Public Service Commission (PSC)2 Rule 4113 (which creates a “right of first entitlement”) prohibited defendant from servicing the subdivision because defendant would be poaching plaintiff’s existing customer. On that basis, plaintiff sued for declaratory judgment and injunctive relief to enjoin defendant from servicing the subdivision.

The trial court denied the injunction, and defendant moved for summary disposition under MCR 2.116(C)(10). Defendant argued that Rule 411 did not apply to municipal utilities and that MCL 124.3 did not prohibit defendant from providing electrical service because it was not disputed that the land on which the subdivision was being built had been vacant. Consequently, there were no buildings or facilities, and therefore no existing customers, that plaintiff had served.

The trial court granted the motion for summary disposition, finding that plaintiff “has not provided electric service to the buildings or facilities that have been [con]structed to date in [the] subdivisions.” Accordingly, under MCL 124.3, plaintiff did not have “a customer that is currently receiving or within the previous 3 years has received the service from another utility.” The court further explained that Rule 411, which could have given plaintiff a right of first entitlement over the entirety of Parcel 200-032, was inapplicable to defendant as a municipality. Moreover, the Legislature had not incorporated Rule 411’s right of first entitlement into MCL 124.3. Therefore, MCL 124.3 did not bar defendant from providing electric services to new customers in the subdivision.

This appeal followed.

II. STANDARDS OF REVIEW

We review de novo a trial court’s decision on a motion for summary disposition. El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). A motion made under MCR 2.116(C)(10) is properly granted when there are no disputed material facts and, viewing the evidence in the light most favorable to the nonmoving party, the moving party is entitled to judgment as a matter of law. Id. at 160.

Likewise, this case also involves the interpretation of administrative rules and statutes. Statutory interpretation is a question of law that we review de novo. City of Coldwater v Consumers Energy Co, 500 Mich 158, 167; 895 NW2d 154 (2017). “The foremost rule, and our primary task in construing a statute, is to discern and give effect to the intent of the Legislature. We begin by examining the language of the statute, which provides the most reliable evidence of its intent.” Id. (quotation marks, citations, and alteration omitted).

2 The PSC is an independent utility regulator “vested with complete power and jurisdiction to regulate all public utilities in the state except a municipally owned utility, the owner of a renewable resource power production facility as provided in [MCL 460.6d] and except as otherwise restricted by law.” MCL 460.6(1). 3 Mich Admin Code, R 460.3411(1)(a) (“Rule 411”).

-2- If the language of the statute is unambiguous, the Legislature must have intended the meaning clearly expressed, and the statute must be enforced as written. No further judicial construction is required or permitted. Only where the statutory language is ambiguous may a court properly go beyond the words of the statute to ascertain legislative intent. [Id., quoting Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999).]

Courts apply these same principles when construing administrative rules. City of Coldwater, 500 Mich at 167.

III. ANALYSIS

Plaintiff argues that, under the new definition of “customer” in MCL 124.3(3)(a), the first- serving utility on a parcel has the right to provide electricity to the entire premises on which any buildings or facilities are located. To our knowledge, this Court has not yet interpreted MCL 124.3(3)(a), which was added in 2018 PA 516, making this a matter of first impression. After careful review of the plain text of the amendment, as well as the entire relevant legislative framework, we disagree with plaintiff’s position.

We start by acknowledging the complex and costly infrastructure investment required to provide electricity to any given parcel of land. Because of the costs and risks attendant to utility investments, various regulatory provisions seek to reduce competition, and duplication of facilities, in the electric service market. See, e.g., Huron Portland Cement Co v Pub Serv Comm’n, 351 Mich 255, 267-268; 88 NW2d 492 (1958) (noting these purposes as the reason for certificates of convenience and necessity). MCL 124.3 is one such provision. It states, in relevant part, as follows:

(1) A municipal corporation may contract for adequate consideration with a person or another municipal corporation to furnish to property outside the municipal corporate limits any lawful municipal service that it is furnishing to property within the municipal corporate limits. . . .

* * *

(2) A municipal corporation shall not render electric delivery service for heat, power, or light outside its corporate limits to a customer that is currently receiving or within the previous 3 years has received the service from another utility unless the serving utility consents in writing.

In sum, a municipality may provide electric service outside its corporate limits, but under this no- switch rule, may not poach certain customers. Previously undefined, the Legislature defined “customer” in 2018 PA 516 as “only the building or facilities served rather than the individual, association, partnership, corporation, governmental body, or other entity taking service.” MCL 124.3(3)(a).

Applying the plain language to the present case is rather straightforward. The “customer” at issue is the assortment of buildings and facilities constructed within the new subdivision. It is

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Related

Great Wolf Lodge of Traverse City, LLC v. Public Service Commission
775 N.W.2d 597 (Michigan Court of Appeals, 2009)
Sun Valley Foods Co. v. Ward
596 N.W.2d 119 (Michigan Supreme Court, 1999)
Huron Portland Cement Co. v. Public Service Commission
88 N.W.2d 492 (Michigan Supreme Court, 1958)
In Re Complaint of Consumers Energy Co.
660 N.W.2d 785 (Michigan Court of Appeals, 2003)
City of Holland v. Consumers Energy Company
308 Mich. App. 675 (Michigan Court of Appeals, 2015)
People v. Pinkney
912 N.W.2d 535 (Michigan Supreme Court, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
Great Lakes Energy Cooperative v. City of Petoskey, Counsel Stack Legal Research, https://law.counselstack.com/opinion/great-lakes-energy-cooperative-v-city-of-petoskey-michctapp-2026.