DTE: Regulated electric market best for Michigan
In regards to The Detroit News' April 17 editorial, "Don't flip switch on electric choice," The News correctly points out that the generation and distribution of electricity carries a unique set of needs. We believe that fully regulating Michigan's electric market is the best way to address those needs and to ensure a reliable and affordable energy future for our state.
Fully regulating Michigan's electric market is smart policy for three reasons: It helps ensure reliable electric supply is available to all customers at all times. It addresses the unfair subsidies that Michigan's families and businesses have carried because of the current hybrid structure. And it will ensure stable and affordable electricity for Michigan's families and businesses.
As Michigan prepares to retire 60 percent of its coal fired generation, the Midcontinent Independent System Operator (MISO) is projecting an electric capacity shortfall as early as 2016. If no action is taken, MISO projects the region will not have enough power to meet forecasted needs in 2021 — only six years from now.
The need to replace baseload generating capacity is clear, but Michigan's current hybrid structure presents unique problems. While DTE is planning to meet the needs of our full-service customers, it is clear that no long-term plan is in place for the 2,000 megawatts of Michigan's electric load served by retail energy marketers.
This lack of planning doesn't just affect the 10 percent of customers who buy electricity from out-of-state retail energy marketers. Because all electric customers in Michigan rely on the same critical infrastructure, it places the entire system and all customers at risk.
The savings that retail access customers realize are actually subsidized by the rest of the utility's customers. Retail access customers avoid the cost of maintaining the reliability of the electrical system. Since 2009, Michigan utility customers have paid $1.6 billion to cover the cost for maintaining the system capacity to serve retail access customers and allow them the free option of returning to utility service.
Keeping the cost of electric service affordable is important for Michigan's families and businesses. But deregulation doesn't ensure lower rates. On average, rates in deregulated states are 25 percent higher than in regulated states, according to the U.S. Energy Information Administration. In fact, the two states with the lowest electric rates, Oklahoma and Arkansas, are fully regulated.
For DTE customers, rates today are lower than they were in 2013 as a result of our ability to control costs. On average, DTE electric customers saw nearly $600 million in rate reductions — or 12 percent — since 2013.
A regulated energy market protects customers from price spikes and provides stable, predictable energy costs.
Steve Kurmas, president and chief operating officer,