LANSING – Utility customer choice advocates have been relatively quiet since the passage of the restructuring laws that capped that choice, but the debate appears to be rekindling since Consumers Energy announced that it had reached the cap.

Consumers notified alternative energy suppliers in its territory and the Public Service Commission on Friday that it had reached the cap of 10 percent of its load under choice and would be creating a waiting list for those wishing to switch in the future.

The Grand Rapids Area Chamber of Commerce put out a call to its members Monday morning to contact legislators about increasing or removing the choice cap.

“The ability to competitively purchase our energy has numerous benefits,” said Jeanne Englehart, CEO of the Grand Rapids Chamber. “By eliminating competition, manufacturers cannot seek the best price for one of their most important manufacturing inputs.”

And the Customer Choice Coalition, of which the Grand Rapids Chamber is a member, noted that power prices in Michigan were increasing while prices nationally were declining. The group said peak prices through the Midwest ISO, which oversees some of the wholesale market in the region, have dropped 53 percent since July 2008, while the PSC has approved rate increases for the state’s two largest utilities.

“As we predicted, Michigan’s remonopolization law is a millstone around economic development in our state,” said Barry Cargill, executive director of the Customer Choice Coalition. “It’s time for lawmakers to recognize that high electric rates are as bad for our state as high taxes, and to open the door to additional competition to help hold down rates and grow our economy. We cannot afford to subsidize the high-cost electricity that our two major utilities want to force Michigan to purchase.”

But Consumers spokesperson Jeff Holyfield said the price and market volatility showed the need for the cap. He said Consumers had about 10 percent of its load on choice in 2006, but that fell to about 3 percent by the time the new law went into effect last year because of increased wholesale rates.

He said the utility was still required to have power at least under contract to serve most of that choice load, which increases costs to the utility. “When they come back we have an obligation to serve them,” he said.

“These short-term market conditions shouldn’t be used as an excuse to tinker with energy policy that’s designed to protect Michigan’s energy future,” Holyfield said.

The Michigan Chamber of Commerce, which supported the change in law, also is watching the markets before deciding whether to back any changes to the cap.

Michigan Chamber President Rich Studley noted the current law was a compromise. “The original proposal in the House was to repeal the act entirely and eliminate customer choice,” he said. “We fought to retain customer choice and competition.”

And Len Singer with DTE Energy noted its electric utility, Detroit Edison, has only about 3.5 percent of its load on choice. “We’re up a little bit from where it was when the current law was passed,” he said.

Studley argued the key issue at this point is to get the power plants built that were promised as part of the agreement on the legislation.

“Governor Granholm and her administration have really reneged on her commitment to build the new power plants that we need,” he said.

The governor earlier this year asked the Department of Environmental Quality to work with the PSC in reviewing air permits for the coal plants.

CLEAN ENERGY ADS: The federal government also is reviewing energy policy and the Climate Protection Action Fund began television and radio ads across the state Monday pushing U.S. Sen. Carl Levin (D-Detroit) and U.S. Sen. Debbie Stabenow (D-Detroit) to support proposals to require more use of renewable energy.

“Michigan is well positioned to be a leader in advanced manufacturing and development of green technologies,” the ads say, quoting Levin.

The spots began Monday and run through Labor Day.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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