Guest column: Limited choice isn’t helping electric rates

By James P. Hallan/Michigan Retailers Association

Since 2008, Michigan electricity customers have been denied the opportunity to shop for electricity in the competitive market because of legislation that capped competition at just 1 percent of total electric use. As a result, we are currently suffering from the highest electricity rates in the Midwest and rates that are higher than the national average. These rates stifle Michigan’s efforts to remain competitive and keep our businesses struggling to climb out of the recession.

Thankfully, Michigan consumers, businesses and industry experts are coming together to do something about it. On Oct. 15, Energy Choice Now (ECN), the Association of Businesses Advocating Tariff Equity (ABATE), the Customer Choice Coalition (CCC) and Energy Michigan will host a much-needed series of discussions focused on the state’s electricity market and the need for full and open electricity competition.

The event, "Michigan’s Electricity Market: Time for Gardening," is taking place in Lansing and will examine a host of topics, including how competition worked for Michigan from 2000-2008, how electric choice encourages utilities to cut costs and customer rates, and the significant savings customers and businesses in other states have experienced as a result of competition.

Michigan retailers and their customers understand competition and the opportunities and benefits it brings, each and every day. That’s why here at Michigan Retailers Association, we are glad to see these discussions take place and are hopeful they can help lawmakers realize that competition represents a strong path forward for Michigan’s electricity policy – and our state’s economy.

The reality is that we have watched our electric bills increase for far too long. In fact, a recent study by Jonathan Lesser of Continental Economics, one of the speakers at Monday’s event, documents how residential customers at Consumers Energy (CE) have experienced a 47 percent increase in their electric rates over the last four years and small commercial customers of CE have experienced a 30 percent rate increase. To add insult to injury, DTE and CE compete in neighboring states like Illinois and Ohio, where, for example, DTE provided Toledo consumers with rates that were 37 percent lower than rates offered to Detroiters this year!

We, along with 10,000 businesses in Michigan that currently languish on a waiting list to gain access to competition, are eager to enjoy the ability to select our own electric supplier and gain access to the significant savings that would result. As Lesser’s study concluded, allowing more customers to shop for electricity in the competitive marketplace would save an estimated $170 million per year on electric costs.

The savings we could reap from electricity competition would be put to good use in the form of new jobs and a stronger economy for Michigan. That’s why we urge the Legislature to consider a path towards full and open electricity competition. We look forward to the discussion about the benefits competition would bring to the state.

For more information and to RSVP, please go to:

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Thu, 10/11/2012 - 7:28pm
Choice is a major contributor to the historical rates that you quote. Michigan's choice program is just a mechanism to shift business costs to other customers. Residential customers are the losers. The Choice program just allows out of state utilities to sell their excess generation in Michigan and , by doing so, leave remaining Michigan customers to pay for the surplus Michigan based generation.which will be needed as our economy improves. Choice providers, Constellation, First Energy, Integrys are just the latest resurrection of out of state carpet naggers raiding our state.