Letter: What’s good for utilities is bad for kids

Senate Bill 437, a legislation sponsored by Sen. Mike Nofs, R-Battle Creek, would — if passed and signed into law — change the rules of the state’s “energy choice” program that allows 10 percent of the power sold in Michigan to come from lower cost alternative suppliers.

The program is popular for obvious reasons. It saves thousands of businesses and school districts money. Eleven thousand more are on a waiting list to get into the program.

Currently, about 200 school districts buy electricity through the program, and the savings are substantial. Passage of the bill in its current form would cost districts about $35 per pupil multiplied by more than 500,000 students, or roughly $17.5 million. Without that money, many districts would have to cut their budgets, meaning less for the classroom.

The state’s two major utilities — Consumers Energy and DTE — strongly back the bill, and why not? They would be in line to profit handsomely by the bill’s requirement that alternative energy suppliers keep enough power on hand at all times to meet 90 percent of peak energy demands now and in the future.

That’s a nearly impossible standard for smaller suppliers. According to a Crain’s Detroit Business report, only two of the 10 alternative energy companies supplying Michigan — one of them a subsidiary of Consumers Energy — could meet it without major investments that would make the business unprofitable.

But that’s the point. By essentially eliminating most of the competition, DTE and Consumers would stand to benefit. It’s good for them, but bad for kids, schools, and taxpayers.

Sen. Nofs says the bill is undergoing revision before it is introduced. Whatever revisions are made, the Michigan Schools Energy Cooperative strongly urges him to take into account the common sense amendments offered by MISEC member districts and others.

These amendments would require more competitive procurement of new electric capacity and energy, require more accountability from alternative electric suppliers, and strip language from the bill that would institute onerous new taxes and restrictions on electric choice customers.

Most of all, they would ensure that the needs of our state’s school children are considered to be at least as important as needs of the state’s most powerful utilities.

Tim Peraino, president

Michigan Schools Energy Cooperative