A Brief History of Electric Choice in Michigan (2000-2014)

2000: Lawmakers Pass Public Act 141—the Customer Choice and Electric Reliability Act

In the 1990s, Michigan’s electric rates were above the national average every single year. In 2000, in an effort to drive down prices, lawmakers opened the state’s electricity market to competition.

  • DTE and Consumers Energy, the State’s largest utilities, received over $163 million and had over $2.2 billion in assets securitized by the State of Michigan in return for their support of electric competition.
  • Michigan ratepayers continue to pay for this securitization in 2015.

2000 – 2008: Customers Save Millions, Independent Suppliers Expand Capacity

Michigan customers shop for the best price on electricity and save over $400 million, while Michigan rates plummet below the national average for the first and only time in decades.

With the electric market open, independent, competitive suppliers begin expanding to meet demand, building over 4,000 megawatt hours of new generating capacity.

2008: Governor Granholm, Lawmakers Cap Electric Competition at 10 percent

PA 286 gave DTE and Consumers Energy a quasi-monopoly of Michigan’s electricity market, arbitrarily capping competition at 10 percent. The new monopoly utilities hailed the implementation of PA 286, claiming:

  • It would clear the way for new plants to be built;
  • The 10 percent cap would not be hit for many years;
  • They would lower rates for factories and high-use customers; and
  • A monopoly system would provide greater “predictability”

None of these claims proved true. Instead:

  • No new plants were built;
  • The 10 percent cap was hit within one year, with a queue immediately forming, reaching more than 11,000 Michigan job-creators and consumers;
  • Industrial rates increased despite a reduction in demand;
  • DTE has raised residential rates by 59 percent per year since 2008, according to the Public Service Commission;
  • Consumers Energy has raised its rates by nearly 55 percent since 2008;
  • Michigan rates have skyrocketed above the national average, while national prices plummeted 45 percent; and
  • The price gap between Michigan and our neighbors in Illinois and Ohio—who enjoy electric choice and are Michigan’s primary competition for investments and jobs—has soared.

2010: Energy Choice Now Formed

Energy Choice Now is a Michigan-based grassroots organization made up of local job providers, suppliers, and others who seek to empower electric customers to save money, and to drive down energy prices by eliminating the cap on retail competition.

2012: Queue of Customers (MI Job Providers) Signing “Choice” Contracts Exceeds 10,000

The “queue” is a waiting list held by utilities and mandated by state law, of each of their customers that want to leave them in favor of signed agreements with competitive suppliers.

2013: Federal Data Pegs Michigans Electric Rates as Highest in Midwest

Federal energy data in 2013 revealed that Michigans electricity rates had risen to 20 percent above the regional average.

The same year, economists issued a report examining the effects of Michigan’s monopoly electric system, finding:

  • Michigan’s electric rates had increased 30 percent since the state abandoned electric choice in 2008;
  • Nationally, rates increased only 2.7 percent in the same time.
  • Michigan’s monopoly system costs ratepayers $3 billion above the regional average; and
  • The cap on choice cost the state 21,000 jobs per year, since 2008.

2014: Michigan Public Service Commission Reveals Spike in Businesses Demanding Choice

In January 2014, the Michigan Public Service Commission released its annual report on Electric Competition, revealing that 11,400 electric customers—the vast majority, job makers—were waiting in the queue for the opportunity to shop competitively for electricity.

In order for each of these customers to be permitted to shop competitively, the current 10 percent cap would have to be expanded to a minimum of 25 percent.

2014: Economic Study: MI Consumers Charged 30% More than IL Consumers

Four of the largest, leading business organizations in Illinois, including their state chamber, commissioned a study that found electric choice has saved Illinois job makers and ratepayers $37 billion since its implementation.

Illinois electric rates average roughly 30 percent less than the average rates in Michigan. Before embracing competition, Illinois’ rates were higher than Michigan’s.

The study found that Michigan’s monopoly-style system has resulted in energy costs that were more than $10.5 billion higher than competitive market prices paid by our neighbors in Illinois.

2015: MISO and Michigan Public Service Commission Independently Say “NO SHORTFALL”

In June and July, 2015, MISO and the Michigan Public Service Commission independently reported that Michigan faces no electric shortfall in 2016, despite dishonest, disingenuous scare tactics being used by Consumers Energy and DTE.