(no title)

See more videos from the Customer Choice Coalition

Michigan’s electric rates – already the highest in the Midwest – are spiraling out of control, and damaging Michigan’s job climate.

The Customer Choice Coalition, a group of businesses, associations and power suppliers who support free enterprise and competition, is pressing to lower costs by ending the power monopoly used by our largest utilities to raise rates with little effective oversight.

To learn more about how the energy remonopolization law of 2008 has raised electric rates for Michigan businesses and families — and how they can start moving Michigan toward a competitive electric system — please take a look at this PowerPoint presentation, and contact us if you have any questions.

High electric rates are hurting Michigan
Michigan’s 2008′s re-monopolization law has been a failure
Our solution: Increase competition and opportunity

High electric rates are hurting Michigan

High electric rates damage the business climate

A recent article by the Michigan Manufacturers Association notes that energy costs are mentioned by businesses as the third largest cost impact on businesses’ operational performance for 2011, behind healthcare (88%) and labor costs (77%). But 73 percent of manufacturers cited energy costs as a major impact on their performance – and not in a favorable way.

And no wonder. Michigan’s manufacturing electric rates are far higher than the regional average – and a full 25 percent higher than in Indiana, a key manufacturing competitor.

In its 2010 benchmarking exercise, Business Leaders for Michigan noted that Michigan’s electric rates are well above the average of competitive states. Michigan’s manufacturing electric rates are 25 percent higher than that of nearby Indiana. It’s no wonder Michigan is losing jobs. We can’t be a Top 10 state in job creation, with electric power costs above the national average.

High electric rates hurt Michigan families

Since 2008, Michigan’s residential electric rates have increased by 20 percent – and are by far the highest in the Midwest. At a time when families are being asked to tighten their belts, Michigan’s utilities have been hammering household budgets.

High electric rates drive up taxes

Many schools and local governments, seeking to lower costs, would like to be able to take advantage of lower electric rates available on the free market. They can do so now when it comes to natural gas, shopping around to find lower rates. But state law prevents them from seeking lower electric rates.

Michigan’s 2008′s re-monopolization law has been a failure

In 2000, Republicans under Gov. John Engler moved Michigan to a competitive electric system, Electric rates were reduced compared to nearby states.

In 2008, Gov. Jennifer Granholm and the Legislature killed competition after extensive lobbying by Michigan’s two largest electric companies. Since then, Michigan rates have increased while other Midwest states have seen small increases or even decreases. For the first time in decades, Michigan’s electric rates are higher than the national average

• Residential customers were promised rates would increase by only 2.5 percent a year. Instead, electric rates for Consumers and DTE customers jumped by 20 percent.
• Manufacturers were told rates would decrease. Instead, according to the Energy Information Agency, Michigan industrial rates increased by 7.23 percent in 2008, compared to a decrease in Ohio (where utilities compete), and a national average increase of 2.07 percent. Michigan manufacturers now pay 22 percent more than their competitors in Indiana.
• Cities were led to believe they would benefit – but instead many cities are being forced to use taxpayer dollars to hire lawyers and litigate before the Michigan Public Service Commission due to massive rate hikes despite reduced power use. Commercial rates charged to cash-strapped cities, schools and other governments increased by 12.51 percent last year in Michigan, while they decreased 6.71 percent in the rest of the region.
• Lawmakers were told demand would require construction of new plants and create new jobs. Now Consumers Energy and DTE say no new plants are needed.
• Environmentalists believed mandates for renewable power standards would lead to increases in wind and other alternative power producers. Instead, Michigan continues to lag the nation in renewable power production, and entrepreneurs are skipping our state because of the law’s requirements limiting the ability of companies to sell their power directly to customers. Instead, they are forced to sell power to the utilities, adding middle-man costs that drive up the ultimate cost to customers.

Our solution: Increase transparency and opportunity

The Customer Choice Coalition believes that Michigan made a mistake when it remonpolized the state’s electric system, allowing only 10 percent of electric load to be open to competition.  That load was subscribed to within one year of the law’s passage. Now hundreds of companies have asked for the right to choose their electric company – but are denied that opportunity under state law.

It’s time to return Michigan’s electric system to free enterprise and competition. We know competition works to lower prices and increase values. It’s time to end the electric monopoly.