Block: Electric choice boosts school budgets
For school districts across Michigan, energy costs are the second most expensive item we have, behind personnel. We rely on low-cost energy to keep our buildings warm in the winter, cool in the summer, and supplied with electricity so that we can provide our students the learning environment they need.
The most important factor currently keeping our energy costs down is electric choice policy introduced in Michigan by Public Act 141 in 2000 and amended by Public Act 286 in 2008, which allows up to 10 percent of an incumbent utility’s customer load to be purchased through a choice alternative electric supplier.
Competitive electricity markets across the U.S. are structured to promote competition among market participants, while maintaining strict regulatory oversight. In competitive markets, power suppliers compete against each other to provide the best service at the lowest cost to attract and retain customers. Comparatively, in monopoly markets, providers have no incentive to innovate or lower costs because ratepayers are held captive to their services.
There is a bill in the Legislature, sponsored by State Rep. Aric Nesbitt, House Bill 4298, that would eliminate the choice option. If passed, it would regulate the utility industry to such a degree that it would all but become a monopoly.
In our 275 member school districts across the state, this choice policy results in an average electric savings of $14.7 million each year. That’s equates to approximately $30 per student that can then be spent educating our children, not paying overhead. Losing those savings in our budgets would certainly result in cuts in other areas — teachers, staff, and extracurricular options — cuts no school district wants to make.
Utilities are providers of energy, but they’re also political entities with millions of dollars to throw behind lobbying efforts for a bill that would push more revenue their way at the expense of our children.
Today, more than two-thirds of the nation’s electricity consumers live or do business in states with an organized choice market. Michigan’s schools need our state to remain a part of this free market system so that we can direct more resources into the classroom and remain focused on students, not on our overhead costs.
Diane Block is assistant superintendent for operations for the Alpena Public Schools and president of the Michigan Schools Energy Cooperative, a nonprofit that manages the energy needs of more than 275 Michigan school districts.