McNeilly: Free the volts, and the jobs
Paid your electric bill lately?
Wasn’t pretty, was it? Now brace yourselves, because some Lansing lawmakers and their campaign contributors are pushing policies to make it cost even more.
That’s because Michigan’s big monopoly utilities — DTE and Consumers Energy — have convinced some members of the state Legislature to back a new scheme to make it illegal to buy electricity from anyone but them.
Welcome to the politics of crony monopolies.
Imagine heading to Kroger, Meijer or Wal-Mart tomorrow to pick up a gallon of milk, only to find their shelves empty, with a sign telling you Lansing had just passed a law making it illegal to buy milk from anyplace but the most expensive store in town.
It isn’t hard to figure out what that would do to the price of milk.
And it’s even easier to figure out what the Big Utility scheme would do to the price of electricity—because they’ve had a 6-year head start and the results are devastating.
Here in Michigan, job providers, public schools, and families are already heavily restricted from shopping around for the best price on their electricity. In 2008, former Governor Granholm capped competition at 10 percent, and according to the U.S. Energy Information Agency, Michigan has been paying higher prices ever since.
Make no mistake — abandoning the free market means killing jobs.
According to economists, Michigan’s current monopoly-style system costs the state 21,000 jobs each and every year.
We all know someone who could use a job, or a better job. An energy monopoly only makes Michigan’s economic recovery tougher.
More directly, the energy monopoly hits ratepayers in the wallet—and hard.
Over the last six years, Michigan has paid $10.5 billion in electric rates above the rates paid by our neighbors in Illinois, where customers enjoy full competition in the electric market, and electric providers compete for their business.
That’s $10.5 billion out of families’ pockets, out of Michigan’s public school classrooms, and out of the investment accounts of local businesses.
On the flip side, Michigan customers who got in under the 10 percent choice cap in 2009 have saved hundreds of millions of dollars, as electric providers compete for their business, driving down prices. People who pay less for electricity save more and invest more.
National monitoring statistics show Michigan customers who filled the choice cap have already saved $400 million.
And 11,000 Michigan electricity consumers currently on waiting lists to purchase their electricity from someone other than DTE and Consumers would save an additional $235 million each year.
Every ratepayer — all of us — in Michigan deserves access to these savings!
But, inexplicably, lawmakers are preparing to force “choice” customers to pony up hundreds of millions more for their electricity, and to make a terrible state energy policy worse by killing all competition.
Like most crony monopolies they will try to scare, bully or frighten people from opening the door to choice. For all the bluster coming from the Big Utilities and their armies of lobbyists, this issue couldn’t be simpler. Less competition means dramatically higher costs for Michigan families and 21,000 fewer jobs each year.
Lawmakers should put people and principle over big energy profits. They wouldn’t restrict your choices when it comes to a gallon of milk and they shouldn’t restrict your right to shop around for the best price on the volts you need to power a light bulb.
Michigan should reject big energy’s crony monopoly job killing scheme.
Greg McNeilly is president of the Michigan Freedom Fund.