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House Electric Bills Take Competition, Entrepreneurs out of Michigan Electric Markets

"Competition, choice and free markets are better solutions to Michigan's energy policies than monopolies, increased regulation and restrictions on entrepreneurs," said Sen. Wayne Kuipers, R-Holland, sponsor of SB 427, which would call for all energy providers to compete to meet future electricity needs. "When many companies are vying to enter Michigan's electric market, as is happening today, customers should be allowed to benefit from the competition that will hold rates down and ensure more reliable -- and renewable -- energy to meet the state's future needs."

The House bills would hand complete control of Michigan's electric needs to DTE and Consumers Energy while tying the hands of the Michigan Public Service Commission (MPSC). The bills would mandate renewable purchases but would allow the utilities to exclude energy entrepreneurs to build and operate new coal fired, wind, landfill gas, anaerobic digester and other sources of electricity. After eliminating these sources of competitive energy and remonopolizing the electric system, the bills would restrict the ability of the MPSC to control rates by allowing file-and-use rates that could automatically go into effect.

"These bills will force cuts in school classrooms around the state," said David Zuhlke, governmental and legislative liaison for the Middle Cities School Association, which has organized the Michigan School Energy Cooperative. "Schools have saved $22 million through electric choice since 2001. Universities are saving millions more. We are compelled by state law and sound practices to seek bids on virtually every item we purchase -- but now some in the state seem to think we should not be allowed to competitively bid electricity."

Mary Dechow, director, government and regulatory affairs for Spartan Stores, said the ability to shop for electricity is saving money for families who shop for groceries. "We save more than a half-million dollars annually thanks to electric competition and choice," she said. "We have to sell a lot of cans of corn to make up that amount of money."

Former MPSC Chairman Eric Schneidewind told reporters of a renewable energy company operating in Michigan that developed an anaerobic digester electricity generator. The company was forced to go to the MPSC to get Consumers Energy to allow the farm operation to provide power - and now is paying far less for this renewable green power than it is paying for other sources of power.

"Michigan electric customers deserve a bidding process that will let the lowest-cost provider of electricity of any kind be the source of Michigan's power. Only Michigan's utilities are standing in the way of this plan," Schneidewind said.

Rodger Kershner, an attorney representing a number of independent power generation companies, said policymakers are being misled by the two utilities when they say new plants can be built only by monopolies.

"Consumers and DTE are wrong when they say PA 141 has to be revoked in order for a new plant to be built in Michigan, there are better alternatives," he said. "Already a major national developer of power plants is laying the ground work now for investment in a new power plant in Midland and a second non-utility plant is being developed in Rogers City. By pushing to have PA 141 repealed, the monopoly utilities are asking the state to send mixed messages to job providers and entrepreneurs, who want to help power Michigan's economic recovery.

"Michigan's industrial job providers need competitive electric sources to enable them to compete in the global economy," Kershner added. "Independent power producers need a level playing field to compete and encouraging competition is one way to help. The state should be welcoming projects like the Midland and Rogers City plants, not throwing more obstacles in their path."

Since passage of choice legislation, Michigan electric rates have increased slower than the rest of the Midwest states. Meanwhile, Wisconsin, which has a similar regulatory scheme as proposed by the utilities and now backed by the governor, has seen the highest electric rates in the Midwest, hurting manufacturing jobs.

The Customer Choice Coalition is the only group that brings together large and small energy users and private electric providers to support increased choice and competition in Michigan's electric system. For more information visit www.stopthemonopoly.com.

SOURCE Customer Choice Coalition