ECN: Workgroup’s Proposed Cost Shifting is Problematic

LANSING, MI — Energy Choice Now today submitted its response to the Michigan Energy Office’s “Energy-Intensive Industrial Rates Workgroup Report,” part of the Administration’s vision for a “No Regrets” energy future and released in draft form on July 7, 2014.

The workgroup was formed purportedly as a first step to address Michigan’s high electricity rates for “energy-intensive” users, in order to attract and retain these larger users and make Michigan better able to compete.

ECN noted that some of the tactics the workgroup discussed as a way to achieve that goal, such as cost-shifting, are problematic.

“By not addressing the underlying cancer affecting Michigan’s lack of competitiveness — the lack of competition in the electricity market — and to simply allow Michigan’s two largest utilities to cost-shift their way out of the problem rather than to tackle this problem head-on is irresponsible,” said Wayne Kuipers, ECN executive director. “It’s time policy makers start listening to all energy users, who just experienced five straight years of escalating rates, and focus on making lasting structural changes that will benefit all Michigan consumers.”

ECN also pointed out that the process lacked both inclusiveness and transparency. The group was closed to general participation, with only Public Service Commission staff, DTE Energy, Consumers Energy and several large Michigan electricity users invited to participate. No residential or commercial users or any competitive suppliers, which represent 10% of Michigan’s current market, were allowed in the discussions.

ECN requested that all materials and notes from the workgroup be made public so that all ratepayers, residential and business, have equal access to the information that was discussed and considered.

“For Michigan consumers, they are painfully and clearly aware of the higher eletric rates they are paying each month,” Kuipers continued.  “The process by which this workgroup attempted to address that problem, however, will only keep customers guessing.”

electric price michigan

Michigan Capitol Confidential: Electricity Competition In Texas, Illinois Brought Lower Prices Than Michigan

The debate about opening up Michigan’s electricity market to competition took an interesting turn at a recent hearing on the issue.

The Michigan Jobs and Energy Coalition, which includes the state’s two largest utilities, Consumers Energy and Detroit Edison, has repeatedly said that open competition in the electricity market would lead to service reliability issues. As an example, the group has said the open market in Texas can be blamed for rolling blackouts that have occurred in the Lone Star state.

But one of the Michigan coalition’s allies in the fight, Bob Manning, who is vice chair of the Electric Reliability Council of Texas, testified against that point of view.

Read the whole article. 


Coverage from Tuesday’s hearing

On Tuesday, the Michigan House Energy and Technology Committee took testimony on the Electric Customer Freedom Act, which will restore electric competition to Michigan. Here’s a breakdown of some media coverage.

Platts: Michigan debates retail choice legislation

Michigan lawmakers on Tuesday began considering a contentious bill that would unshackle the state’s “hybrid” electricity market, lifting a 10% cap on retail choice while requiring electric utilities to divest their generation to an affiliate or other entity.

Republican State Representative Mike Shirkey told the Energy and Technology Committee in the GOP-controlled House of Representatives that his bill (H.B. 5184), is needed to control electric rates in Michigan that have risen by 30% since 2008, more than double the national average increase during that period. In 2008, the Legislature enacted the existing law that rolled back retail choice, clamping a 10% lid on competition and ushering in a 10% by 2015 renewable portfolio standard, among other things.

Shirkey said the state’s retail power prices have consistently climbed while wholesale power prices have fallen since 2007. The legislation, he said, “provides modernized regulation for Michigan electric energy policy that is demonstrably better than the current monopoly-style system.”

Read more here (subscription needed)

MIRS: House Dives Into Electric De-Reg Debate, Senate Leader Not Interseted

Electric choice hearings kicked off in the House Energy & Technology Committee this morning, and while House Speaker Jase BOLGER (R-Marshall) is interested in debating the subject, the Senate leader is less than enthused.

Speaking to the Lansing Chamber’s legislative dinner this evening, Bolger said Michigan’s comparatively high electric rates put the state at a competitive disadvantage when it comes to business location.

Electric choice is a subject worth discussing, he said.

Read more here (subscription needed)

Gongwer: House Panel Begins Electric Choice Debate

In a long anticipated hearing, the House Energy and Technology Committee took up a bill on Tuesday that would remove the 10 percent cap on electric choice in the state.

Supporters say the removal of the cap in HB 5184* would open the state’s electricity market to full competition and lead to lower rates for consumers. Opponents of the measure say it will not lower rates and could affect reliability and accessibility.

Rep. Mike Shirkey (R-Clarklake), sponsor of the bill, said the 10 percent cap on electric choice is arbitrary, and he said Michigan has the highest electricity rates in the Midwest.

Mr. Shirkey said since 2008, electricity rates nationally increased by 3.5 percent, while in Michigan, rates increased by more than 26 percent during the same period.

He said the bill would allow companies and families to shop for best prices, while utilities will have to compete for business.

Read more here (subscription needed)


WLNS: Rigged — Picking Your Electric Company

(WLNS) – Electric choice: it’s a hot topic following the power outages caused by December’s ice storm and one that’s even getting attention from lawmakers.

Currently, only 10 percent of Michiganders get to choose where they get their electricity. The other 90 percent must follow the state’s power grid.

Big businesses on the energy choice plan say they save tens of thousands of dollars each year by getting energy from out-of-state providers. Nearly 12,000 businesses that aren’t on the plan are waiting in line for electric choice.


>> Read the entire article here


Crain’s Detroit Business: Electric choice customer waiting list grows in Michigan

A state report released Friday shows that the number of customers waiting to change utility companies in Michigan has increased 81 percent from 2011 to 2013, according to the Michigan Public Service Commission.

From 2012 to 2013 the pace slowed, but Consumers Energy Co. had a 4 percent increase in customers waiting to select a new utility and DTE Energy Co. had a 15 percent increase last year, said the PSC’s annual report on customer choice.

If the 10 percent statutory cap on customers allowed to switch utilities didn’t exist, the PSC said 25 percent of customers would choose to leave Consumers and 22 percent leave DTE for one of the state’s 27 alternative electric suppliers, the report said.


>> Read the entire article

fox 47

Fox 47 News: High electricity rates in Michigan

While nationwide electricity rates have fallen in recent years, rates in Michigan are up–more than 27 percent since 2008.

“The conclusion to draw from this is that when we have monopolies prices go up, when we have competition prices come down,” said Dr. Theodore Bolema, a Mackinac Center Researcher, who presented his findings to an audience Wednesday in downtown Lansing.

In 2008, a law capped the number of alternative energy suppliers at ten percent. Now more than 11,000 customers–mostly businesses– are on a waiting list to get power from a company other than DTE and Consumers.


>> Read the entire article

Michigan vs nation

Michigan Capitol Confidential: Bill would open up competition in Michigan’s electricity market

A new bill would lift Michigan’s cap on electric market choice.

Proponents of the bill say the current cap prevents most of Michigan customers from using competition to lower their electric rates, which are the highest in the region and well above the national average.

House Bill 5184 is sponsored by Rep. Mike Shirkey, R-Clarklake.


>> Read the entire article


Michigan Radio: You could choose your own power company under new legislation

Michigan could deregulate the electricity market, allowing people to choose where they buy electricity.

In downtown Frankenmuth there are two very popular restaurants: the Frankenmuth Bavarian Inn and right across the street, Zehnder’s of Frankenmuth. Both are famous for their chicken dinners. And the owners are cousins — both of them are Zehnders.

There is an important difference. One business buys its electricity from the free market, which could include out-of-state power companies. The other pays whatever its Michigan utility company charges.


>> Read the entire article