Michigan May Ban Retail Electricity Choice

Since 2008, electricity choice has been capped at 10 percent of load for each utility in the state of Michigan, as reported previously in Retail Energy Buyer. Last week, Aric Nesbitt, the chair of Michigan’s House Energy Policy Committee introduced house bill (HB) 4298 to eliminate electric choice in Michigan altogether. The bill states, “Alternative electric suppliers shall not provide retail customers with electric generation service or enter into agreements to provide retail customers with electric generation service.” Current retail energy customers would be allowed to remain on competitive supply plans until the termination of their contracts.

In contrast, an editorial in the Detroit News expresses support for full deregulation of Michigan’s electric industry and criticizes Nesbitt’s proposal. Likewise, the Detroit Free Press notes that Michigan’s utility rates are higher than Midwest and national averages. In part, this is because the rest of the country has increased its reliance on natural gas, which is currently very cheap, while Michigan has continued to rely on coal for 55 percent of its energy and gets just 7 percent from natural gas. Nationally, the US receive 39 percent of its energy from coal and 30 percent from gas. Retail Energy Buyer’s February 10 article provides more detail on Michigan energy prices.

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