Letter: State’s energy future at crossroads
Re: Gary Glenn’s Sept. 30 opinion piece, “Keep energy choice alive”: At a time when our state’s energy future is at a crossroads, Michigan must secure our reliable, affordable and clean energy with a Michigan-first policy. Yet some in Lansing are pushing a misguided effort to expand electric deregulation — a policy that has proven short-sighted both here and in many other states around the country.
Michigan needs responsible regulations, like the efforts being led by Sen. Mike Nofs, R-Marshall, and Rep. Aric Nesbitt, R-Lawton, to ensure every Michiganian has access to reliable, affordable and clean energy and to guarantee that no one is forced to shoulder costs that other customers avoid.
The imprudent effort to expand deregulation is essentially pushing a backdoor tax that will disproportionately impact low-income citizens.. Expanding beyond our current 10 percent cap, like Rep. Gary Glenn, R-Midland, has proposed, would force utility customers to cover a $540 million annual subsidy that deregulated customers avoid paying.
Deregulated customers avoid grid maintenance and reliability costs that are part of utility-customer rates — critical components to maintaining a strong electrical grid, which we all rely upon daily. Under the current 10 percent cap, utility customers are unfairly forced to shoulder a $300 million annual subsidy.
An expansion of deregulation would leave our energy market more volatile, leaving us susceptible to large, random price spikes and growing capacity issues. Michigan’s lower peninsula is already facing an electric capacity shortfall next year, which we can account for by importing energy from out-of-state markets; however, as the region’s resources diminish in coming years, the ability to import electricity will go away.
Not to mention, as Michigan imports expensive electricity, we are effectively exporting jobs. This is one of the major problems with deregulation. Out-of-state energy marketers are not committed to Michigan and maintain a minimal footprint in the state. If we turn to them for our electricity needs, Michiganders will no longer generate the power we need.
That is why we need a Michigan-first energy policy. Michigan’s energy future should be created by Michigan companies, with Michigan jobs, and not left to out-of-state marketers who are not committed to our state.
Michigan is enjoying a tremendous economic rebound; we cannot afford to gamble this away on an energy policy that works for out-of-state energy companies, but puts Michigan at risk. On average, deregulated states pay 27 percent higher rates than regulated states. They’ve also been more susceptible to consumer fraud from alternative suppliers, unpredictable price spikes, diminishing capacity, rolling blackouts and fights with the federal government over future energy decision-making power.
In Illinois, an alternative supplier seeking a bailout to further boost their highly profitable plants is essentially holding consumers hostage. And in Ohio, many are pushing for new regulations with Gov. John Kasich, a Republican presidential candidate, saying in 2014: “The ideological effort to deregulate, I’m not so sure it’s the smartest thing we’ve done in the state of Ohio.”
Michigan’s next energy plan should protect small businesses — drivers of our economic recovery and members of local Chambers of Commerce across the state — from sudden, unpredictable electric rate spikes. Small businesses make the most of every dollar they earn, and volatile rate spikes would make it more difficult to pay their employees, stock their stores or keep their doors open for business.
Do we really want to entrust our energy future to out-of-state suppliers that whose interest is more focused on their bottom lines, than the bottom lines of Michigan job providers? Do we rely on a policy that has been a economic anchor in states around the country? We need a Michigan-first energy policy now that will provide future guarantees on capacity and keep energy reliable, affordable and clean for all Michiganders, and fairly distributes the cost for maintaining our vital energy infrastructure.
Vice president of government relations
Detroit Regional Chamber