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Guest commentary: Leave Michigan’s electricity market alone

From the Detroit Free Press, 8/28/2012

With the state Legislature considering policy that would deregulate the electricity market, anyone who relies on dependable performance from its Michigan-based utilities should consider this troubling statement from the Texas Coalition for Affordable Power, a group of municipalities that purchase power in bulk:

“We have a system where we have numerous, hundreds maybe, of retail electrical providers who really add no value to this system. By law they can’t own wires. They don’t own the distribution system, they don’t own the meter. By law they can’t own any distribution sources. So they are truly an unnecessary intermediary.”

This isn’t what we want in Michigan. Unfortunately, the supporters of Energy Choice Now — a group “committed to passing legislation that will eliminate or raise the cap on electric competition,” are pushing just this kind of debacle in Michigan.

Michigan’s marketplace, as regulated by the 2008 energy law, allows for dependable and affordable electricity while growing the supply of alternative energy. Texas deregulated its electricity market 10 years ago and is still being hit by the financial sucker punch a decade later. According to a report by the Texas Coalition for Affordable Power, a typical electric customer paid $3,000 in added costs. Texans spent $11 billion cumulatively because of higher rates.

Michigan will face the same problems if out-of state energy wholesalers are successful in carving out a piece of our energy market. A report recently released by Energy Choice Now fails to mention that millions of electric customers will face increased rates via shifted costs if the cap is increased. The limited choice our law currently allows already costs Michigan families and businesses an additional $350 million each year to subsidize a handful of cherry-picked customers. The legislation supported by Energy Choice Now would exacerbate the problem.

The worst part is that Michigan has already tried electric deregulation, and it failed miserably. Public Act 141 of 2000 failed to lower costs or to provide the state with a long-term, substantive plan for its energy future.

After eight years of a volatile energy market, the Michigan Jobs and Energy Coalition came together to forge a plan, along with the Legislature, to protect customers, expand renewables and safeguard the state’s energy future. The plan resulted in bipartisan legislation enacted in 2008 that provides a long-term power plan to help grow and create jobs in Michigan.

Michigan’s hometown energy providers are committed to investing in the state’s energy future by diversifying the state’s portfolio, building new generation plants to meet demand (while keeping jobs in Michigan) and focusing on best practices for home and business energy efficiency — at the lowest possible cost for customers.

The legislation being proposed is not a quick fix, as some would lead us to believe, and will lead to costs in Michigan we can’t afford. Successful energy policy takes a firm, meaningful commitment to the future needs of this state. We believe that plan is in place and in position to succeed.