Michigan’s DTE Energy Reaches 10% Competition Cap; Majority of Customers Left Out in the Cold

As of yesterday, Michigan consumers in DTE Energy's service territory no longer can choose a competitive electricity supplier to serve their energy needs.  As a result of a state law passed a year ago that limits choice for electricity users to 10 percent of each utility’s demand, many customers are now denied the opportunity to achieve more competitive pricing and run their operations more efficiently.  With the cap having been reached in August for Consumers Energy's territory, the door is now closed for approximately 90 percent of the eligible electric load.  Consumers who want more options and lower-priced electricity than their monopoly utility will provide no longer have the option to shop around.

As a state struggling with its economy and seeking job growth, Michigan has made a grave mistake in making businesses, schools, religious institutions, local governments, manufacturers, office buildings, retail stores, etc. captive customers of monopoly utility providers.  Absent legislative change, these companies and organizations cannot lower their electric rates by exercising their options to explore the market and choose a competitive supplier.

Fortunately, there are legislators that are paying attention. Michigan Senator Cameron Brown launched an effort this fall to increase the cap to foster competition and provide increased opportunity for consumers to participate in electric choice.  Senator Wayne Kuipers told Crain’s Detroit Business that the cap was an artificial barrier… “We have said sorry, company XYZ, you didn’t make it in time.”

Kuipers, who voted against the 2008 legislation in part because he saw it as limiting competition, said he would like to eliminate the cap entirely and indicated a legislative proposal could emerge in the state Capitol.

The fact that these caps were met so quickly in Michigan is a prime example of consumers’ desire for choice in electric markets and energy suppliers moving quickly to fill that demand.  It’s our hope that Senators Brown and Kuipers are joined by others in the statehouse to ensure that more (if not all) power consumers can benefit from competition. Joel Malina | December 11, 2009