Senate Bill 437 will Kill Electric Choice

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Anti-Competitive Provisions In SB 437

  • One-Way Return to Service Requirements Will Eliminate Choice.
    • Current Choice customers and those in the queue are forced to elect to remain so or return to utility service.
    • Thereafter, a returning customer must provide an irrevocable three-year notice, or else pay additional costs at the utility’s discretion.
    • A returned customer may NEVER again choose retail electric choice.
  • Strangles the Customer Queue and 10% Market Over Time.
    • Ability to join the waiting list for Electric Choice (the “queue”) ends and it is eliminated over time through attrition.
    • As existing Choice customers drop off over time, and no new customers are allowed to elect Choice service, the 10% market is eventually strangled.
  • Utility Dictates Costs and Terms of Service Outside Usual Tariff Rates.
    • Allows the utility to refuse a returning customer the tariff rates, giving the utility sole discretion to set the price, terms and conditions of such return to service.
    • Grants the monopoly provider unfettered discretion to charge returning customers whatever price it sees fit.
  • Puts Confidential Customer Information at Risk of Public Exposure.
    • Requires the names and electric loads of all customers in the queue and on Choice, and all the contracts of Choice customers, including prices and terms, must be filed at the Michigan Public Service Commission (MPSC).
    • Even if filed under seal, such information could be obtained by competitors.
    • Utilities are not required to meet these same requirements.
  • Discriminatory Burdens are Placed on Alternative Suppliers Only.
    • Unfair capacity obligations are placed on suppliers, who are forced to obtain for each contracted load, physical capacity for 3 years or contract term, whichever is longer.
    • AES power purchase contracts must be prepaid.
    • Capacity from the MISO auction is limited to 5% of suppliers’ requirements
    • Together, these unfair and unnecessary burdens make alternative supply uneconomic for Michigan businesses because utilities are not subject to the same requirements
  • Removes Utility Code of Conduct Requirements for Non-Energy Businesses
    • Allows unregulated utility affiliates (appliance repair, energy auditing, etc.) access to utility customer information.
    • Allows utility’s “other value added program and services” to compete with private sector businesses.
    • Allows regulated utility to keep profits from its unregulated services.

DOWNLOAD A PDF VERSION OF THESE PROVISIONS HERE