- Associated Press - Tuesday, March 24, 2015

LANSING, Mich. (AP) - Michigan’s limit on competition in the electricity market would be gradually lifted under legislation proposed Tuesday by a Republican senator who thinks many legislators are too focused on keeping the status quo or returning to a monopoly system.

Lawmakers should “take our courage pills” and “get out of the messy middle,” Sen. Mike Shirkey told The Associated Press of the current hybrid approach, which guarantees two dominant utilities at least 90 percent of sales in their regions.

Shirkey’s bill would let 11,000 business customers on a waiting list immediately buy from competitors to Consumers Energy and DTE Energy. The “choice” market would double to more than 20 percent of the dominant utilities’ sales, after which the cap would rise another 18 percent over three years and possibly more in the future, depending on demand and what regulators decide.

He said he listened to utilities’ complaints that alternate suppliers unfairly “cherry pick” customers while DTE and Consumers Energy must be the supplier of last resort for customers who leave and then come back. The measure would direct the state Public Service Commission to conduct annual market auctions letting any energy provider bid to be the default provider, he said.

Shirkey, of Clarklake, said he wants regulators to award investments in new power plants based on competitive bidding and to start letting residential customers buy from alternate providers by aggregating their demand by neighborhood, municipality, school and university.

“We want not just affordable energy costs, we want competitive energy costs,” he said.

The bill was introduced a day before the GOP-controlled House Energy Policy Committee resumes hearings on Republican Chairman Aric Nesbitt’s legislation that would end 15 years of competition in the power market. A Senate panel is expected to begin debating changes to the 2008 energy law when legislators return from a two-week spring break in April.

Shirkey acknowledged there now is not enough support within the majority 27-member Senate GOP caucus for his plan, saying “there is some work to be done.”

Gov. Rick Snyder, a Republican, recently proposed keeping intact the 10 percent cap if alternative suppliers guarantee capacity to provide reliable power for the long term.

Utility companies criticized Shirkey’s plan.

“With nine power plants closing in 2016 in Michigan, our state needs the reliability, certainty and affordability provided by state regulation. Electric deregulation is a failed model that leads to less reliability, greater uncertainty and higher prices. It is exactly the wrong approach for Michigan,” Consumers spokesman Dan Bishop said.

DTE spokesman Scott Simons said power bills are 25 percent less in fully regulated states than in deregulated states, and states such as Ohio and Illinois are scrambling to pass legislation that would effectively re-regulate the system to prevent critical baseload plants from shutting down prematurely.

But a group of alternate power providers, their customers and others waiting in the queue said Shirkey’s legislation and Snyder’s willingness to keep the 10 percent limit is helpful going forward.

“Now we can start haggling about what’s the appropriate level of choice. The 10 percent level was just randomly selected from thin air,” said Wayne Kuipers, executive director of Energy Choice Now. “Companies are saving … tens of millions of dollars because they’re able to shop. More companies want the ability to do that.”

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Follow David Eggert at https://twitter.com/DavidEggert00


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