Traverse City Record-Eagle

Other Views

April 29, 2014

Another View: Mich. electric deregulation not answer

Two very divergent opinions have emerged in the debate over a push to deregulate Michigan’s electric market.

Proponents of electric choice say the competition provided in an open market will lower rates, subsequently making Michigan more attractive to existing businesses and those that may consider locating here.

Opponents, namely (Jackson-based) Consumers Energy and DTE Energy, argue that deregulation will decrease reliability and increase price instability. In other words, it’s a lose-lose for most Michigan customers, critics said.

While it’s difficult to say exactly how deregulation would play out in Michigan, we believe the risks are not worth the rewards.

We agree larger businesses — particularly manufacturers or others with higher than average energy costs — might benefit from an open market, but that won’t be the case for the average homeowner. A senior energy adviser for the U.S. Energy Administration likened the supply marketing to homeowners to a “scam,” because once the market gets volatile, the competitive suppliers disappear.

We believe that the lack of stability could prove problematic long-term for Consumers Energy, which is Jackson County’s second-largest employer. Quality of service and reliability are likely to suffer as Consumers Energy shifts its resources from long-term planning and investment to making itself as lean and competitive as possible in an open market.

We’re likely to see a drop off in Consumers Energy’s corporate giving and community involvement. At a minimum, 200 Jackson-area jobs are on the line.

We agree the state needs to provide relief for larger businesses that use a large amount of energy, such as Gerdau Special Steel North America. But specific cases like this one can be addressed individually.

Consumers Energy’s Dave Mengebier had a point when he said, “Let’s not throw the entire regulated system out the window when what we’re really trying to do is just focus on those customers where electricity is a big competitive factor for them.”

It’s true the state of Michigan needs to do a better job of making itself more attractive to out-of-state business, but we don’t believe electric deregulation is the answer.

A good place to start would be repairing Michigan’s roads.

Jackson Citizen Patriot

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