Keep your right to shop for rates

by Larry Meyer
MRA Chairman and CEO

Customers shop around for the best deal—who wouldn’t? Competition results in fair prices. Now it’s time for Michigan’s commercial consumers of electricity to work together to preserve their ability to shop around for the best rates on electric power.

Electric Choice, a program that already saves some members 10 to 20 percent on their electric bills, is in jeopardy. Here’s the background:

In 2000, after months of complex negotiation, the Michigan Legislature and key players hammered out a plan to move Michigan’s electric industry toward deregulation and a more competitive model. DTE Energy’s and Consumers Energy’s residential, commercial and industrial customers won the ability to shop for better rates on electricity, through the program we know as Electric Choice.

MRA took advantage of the legislative changes we lobbied for and set up a program to enable MRA members to save through Electric Choice.

Now DTE and Consumers Energy, complaining that they’ve lost many customers and might lose too many more in the next few years, want to change the deal. They want to eliminate Electric Choice for consumers who use less than one megawatt per meter.

That’s most of us—small and medium-sized businesses, not to mention schools, churches and government agencies. In general, only manufacturing and huge companies use enough electricity to meet the 1-megawatt-per-meter threshold.

We in Michigan already pay the highest electricity rates in the Midwest, but the utilities claim to be struggling and are asking the legislature to let them out of a deal they perceive as unfavorable.

First, the numbers I’ve heard indicate that these companies are making a decent profit on the Michigan operations—10 to 15 percent, according to the Public Service Commission (MPSC).

Second, the utilities didn’t give us Electric Choice without getting something in return. The people of Michigan agreed to pay $1.7 billion to the utilities by issuing bonds that are payable over 20 years in exchange for this deal. The utilities got their money; now they want out of their end of the deal when it gets tough.

If the utilities have real issues of concern, they should be resolved by the MPSC, the experts on these issues, not by the legislature. Evidence indicates that the MPSC is skeptical of the utilities’ efforts to rescind Electric Choice, a sign that the utilities’ financial straits are not all that dire.

The Michigan Economic Development Corporation often cites Michigan’s high utility rates as one of the biggest obstacles to locating a business in Michigan. Over time, Electric Choice will improve the business climate in Michigan, and that helps all of us.

MRA is part of the Customer Choice Coalition, which meets every few weeks with various legislators and the MPSC to represent our concerns. We’ll do our part, but we need your help.

Let your legislators know that we want Electric Choice to be preserved. One easy way to contact your legislators is through the VoterVoice link on the MRA website (www.retailers.com)
—under the Governmental Affairs section, click on the “Get Involved” link. Or call MRA Governmental Affairs at 800.366.3699 for more information about this issue.

Electric Choice: it’s about electric power and choice of suppliers. You too have power and you have a choice—let the utilities use their clout to change this legislation, or get involved to help save Electric Choice.