Momentum Grows to Expand Competition in Michigan, Lower Electricity Costs

The movement to restore Michigan’s competitive electricity market is growing, with state legislators and businesses taking action in the fight to roll back a poorly conceived statewide cap on competition. 
 
A bipartisan legislative proposal to raise the limitation on electricity competition from 10 percent to 25 percent of a utility’s demand would revisit a 2008 law that prevented the great majority of Michigan’s electricity consumers from choosing their power supplier. The cap was reached in just one year and Michigan consumers, without choice and captive to utilities, have been forced to accept multiple rate hikes. Electric rates for utilities in Michigan, already highest in the region, are once again being increased – most recently for an additional $220 million.
 
Rolling back competition in the state “has been a proven disaster for Michigan businesses,” said Representative Roy Schmidt, one of the cap expansion proposal’s two sponsors. “States with competitive markets have been able to take advantage of wholesale energy prices that have dropped by 50 to 60 percent.”
 
Consumers are also taking action to support the legislation. The Electric Competition for Michigan Now Coalition, launched this month, has already attracted 26 businesses and hundreds of supporters on social media channels such as Twitter and Facebook. Earlier this year, 36 businesses  joined COMPETE in calling for state action to open up the state’s electricity market to competitive power suppliers.
 
Michigan’s remorse over rolling back competition two years ago is not unique. Similar sentiment has surfaced in Arizona, where state regulatory staff recently cited potential benefits to increased competition as they consider revising laws governing the state’s electricity market. In Virginia, another state that has rolled back competition, state lawmakers created a work group to re-examine its decision in light of spiking energy rates.
 
COMPETE applauds state officials in Michigan, as well as other states, for recognizing that competition is working across the country and for taking action to help consumers take control of their energy costs and usage, which ultimately will help stimulate clean energy and encourage technology innovation.  

Bill Massey | August 24, 2010