Detroit News: Competition in Michigan’s Electricity Market is Road to Jobs Creation

The Detroit News has endorsed the effort of state lawmakers to roll back Michigan’s cap on competition in an editorial urging that limits on competitive market access be lifted from 10 percent to 25 percent of a utility’s consumer demand. The bipartisan legislative proposal, introduced in both state legislative chambers in June, would revisit a 2008 law that bars the vast majority of Michigan’s consumer demand from choosing an alternative, competitively priced power supplier.
 
This editorial is only the most recent example of pent-up demand for increased competitive choice in the state’s electricity market.  Businesses have strongly advocated greater choice to help them save jobs and weather the recession, as evidenced by an April COMPETE Coalition-led initiative from 36 state businesses to introduce cap increase legislation. Thousands of residential consumers have also joined the fight through the Electric Competition for Michigan NOW! campaign.
 
Even the state’s education community is involved. School systems of all levels, under pressure to cut costs wherever possible, have appealed to lawmakers for help. The situation is so pressing that an alternative legislative proposal, HB 6388, has been introduced to exempt all public and private schools from any cap that may be in place.
 
The economic case for increasing the state’s cap on competition could not be more compelling. State energy rates have increased by up to 33 percent since the cap took effect. This starkly contrasts with rate increases when the state enjoyed full competition from 2000 to 2008. During that period, rates rose much less than the national average. In fact, Michigan’s average retail price of 9.82 cents-per-kilowatt hour is now higher than five neighboring states.
 
The artificial cap has created an unfair landscape of haves and have-nots, and this week’s editorial puts the situation in stark perspective. “Michigan businesses, wanting to lower their energy costs, are held captive by an arbitrary 10 percent competition limit,” opined the paper’s editors. “Higher power costs for them mean fewer new jobs for Michigan.”
 
The collective voice of the state’s businesses, schools and residents is becoming louder and louder in calling for greater choice. Competition is working, and lawmakers should seize the opportunity before them to provide economic freedom to their constituents.    

Bill Massey | September 23, 2010