‘Choice’ customers fight Senate energy plan

Jonathan Oosting
Detroit News Lansing Bureau

Lansing -- The Michigan Senate may vote as soon as Tuesday on sweeping legislation to overhaul the state’s energy policy, prompting a flurry of pushback from businesses, schools and other customers who argue the utility-backed bills may effectively kill an electric “choice” program that saves them money.

Sponsoring Sen. Mike Nofs, R-Battle Creek, is expected to brief his Republican colleagues on the two-bill package Tuesday morning in a closed-door caucus meeting.

“If the will of the leadership is to go forward, maybe they decide to go ahead and pull the pin and maybe we take a vote,” Nofs said last week.

The legislation, as voted out of committee Wednesday, would see the state swap its 10 renewable energy mandate for a more flexible “goal” of 35 percent renewable energy and waste reduction by 2025.

The state would also place new restrictions on alternative energy suppliers, which buy and sell excess capacity and are allowed to provide 10 percent of Michigan’s electricity at unregulated rates.

DTE Energy of Detroit and Consumer’s Energy of Jackson are urging the Legislature to act on and approve the legislation, citing potential strain on the current system as they close down coal-fired power plants due to age and federal regulations.

“The Legislature has a legacy opportunity to address this emerging infrastructure crisis now,” said Dan Bishop of Consumers Energy. “Doing so will ensure we have reliability and affordability going forward. No action simply puts Michigan at more risk.”

But business, schools and even some local governments who participate in the state’s electric choice program are fighting the proposal and urging legislators to take their time with the bills. There are roughly 6,000 customers in the capped choice program, with another 11,000 waiting in line.

Under the legislation, alternative suppliers would have to prove they could buy or generate enough energy to meet the demands of their customers for three years. The bills would also impose a new electric generation service charge on customers who move into the choice market.

Bob Spletzer of Bronner’s Christmas Wonderland in Frankenmuth says the company realizes significant savings through the electric choice program, which he’d prefer to see expanded so neighboring businesses stuck on the waiting list could also participate.

“What we’re afraid of is that if this goes away the two big boys are going to have a complete monopoly again,” said Spletzer. “…I just know if we lose choice, we’re going to be paying more.”

Schools in the energy choice program have saved over $100 million in combined energy costs since 2000, according to Ray Telman of the Michigan Schools Energy Program, which is also fighting the legislation for fears of increased costs.

“While energy is the second biggest cost for schools, the first is personnel,” said Telman. “And there’s very few places you can go other than staff if you’re going to be good stewards of taxpayer money. We’ll see staff cuts in schools. We’ll see cuts in instructional aid.”

Oakland County government saves roughly $500,000 per year as an electric choice customer, according to director of facilities Art Holdsworth, who said he thinks the new legislation will reduce the number of alternative energy suppliers who want to do business in Michigan, forcing more customers back to incumbent utilities.

“The increased cost is going to have to be picked up by the taxpayers,” said Holdsworth. “There’s no other revenue sources for the local government. And the more money you take out of taxpayer pockets, the less discretionary money they have to spend in the economy

Consumers and DTE say alternative energy suppliers are essentially getting a “free ride” on the electric grid that the utilities pay to maintain, a cost that eventually trickles down to regular rate payers. Utilities also point out they’re making infrastructure investments in Michigan and paying taxes that continue to support schools and local governments.

“Alternative suppliers don’t make electrons, they simply take the surplus and sell it to their customers, and that surplus is rapidly drying,” said Bishop.

The Michigan House Energy Committee advanced a separate energy overhaul proposal to the House floor last year, but the legislation has not seen action since.


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