Michigan has an energy policy today - one that is working well. We don't need the changes that our two utilities would force on our state, which will immediately raise prices and lead to less reliability.
In 2000, Michigan introduced competition to our electric system. Since then our electric rates have gone from above the national average to below the national average, and we've seen the addition of 4,000 megawatts of new generation to the state. We've lowered prices and increased reliability. Businesses and schools, in particular, around the state have dropped their electric bills substantially.
Now Michigan utilities and their supporters in Lansing want us to go back to our old energy policy. They want utilities to have a monopoly on retail sales and overwhelming control of renewable power in our state - while getting rate hikes for electricity and natural gas before the Michigan Public Service Commission approves those rates.
The Senate Fiscal Agency predicts the pending energy bills will raise rates by 23 percent to 28 percent for residential customers. And that's before any new plants are built.
Is this really the "new" electric policy we need in Michigan? We saw this game in the 1980s and 1990s. It gave us Fermi II (which came in $4 billion over budget, 10 years after it was scheduled to open - cost overruns we are still paying today) and the Midland nuclear plant, which was abandoned due to mismanagement and turned into a natural gas burning plant that operates sporadically today.
Competition lowered prices, encouraged entrepreneurs to build plants this decade that the utilities refused to build and increased options for customers, too. Some competitive companies today will guarantee your electric rate for three years. Try getting that deal from Consumers Energy or Detroit Edison.
The utilities say they need a monopoly to get new plants financed. But other plants are in the planning phase now without a monopoly. LS Power near Midland is moving forward on a major coal-fired baseload facility.
What the utilities really want is to have ratepayers - not management and shareholders - bear the risk for a planned $1.4 billion Consumers Energy plant near Bay City and Detroit Edison's $8 billion nuclear plant.
The Customer Choice Coalition supports all who wish to build new power in our state. But we believe that they all - coal, nuclear, wind, landfill gas, solar - should be encouraged to compete to bring the lowest cost reliable power to the market as soon as possible.
We should be eliminating barriers that stand in the way of low cost renewable power. Detroit Edison recently refused to hook to the grid three windmills being operated by the small Laker School District in the Thumb until the MPSC ordered it to do so. Our two major utilities routinely stand in the way of any renewable power they don't control.
Competition has worked. Michigan shouldn't return to a failed monopoly policy that we know will lead to higher rates and cost overruns dumped on hard-pressed Michigan customers. Learn more at www.stopthemonopoly.com.
by Michigan Business Review
Thursday August 28, 2008, 4:45 AM
Barry Cargill
Barry Cargill is the executive director of Customer Choice Coalition in Lansing.
Guest Opinion: Don't let utilities shift risks and costs
http://www.mlive.com/businessreview/oakland/index.ssf/2008/08/guest_opinion_dont_let_utiliti.html
