SBAM Program Promotes Savings On Energy Bills

June 4, 2002
| By Katy Rent |
Print
Text Size:
A A
GRAND RAPIDS — Small businesses that are looking to pinch a penny or two this holiday season can now look to save money on electric bills.

The Small Business Association of Michigan (SBAM) announced that businesses with 100 kilowatt or greater demand for electricity can save 5 percent to 15 percent on electric bills under a new program.

The association is aggregating businesses to create value and savings in the Electric Choice Program. What that means to small businesses is that customers are being combined into a group to purchase power. Group members are represented by SBAM, which is the aggregator, and then in turn SBAM negotiates with the alternative electric supplier to create value and savings for the customer.

The program is basically the result of the restructuring of the electric industry in Michigan. It is a statewide initiative that will be implemented over the next few years.

Beginning in 2002, some customers will be able to choose their electric supplier instead of using the traditional method, purchasing it from a local utility. When electric choice is fully implemented, the role of local utility will change.

The change will occur in choice. The new program will allow small business owners to choose their power generation supplier. The electricity, however, still will be delivered through the same lines that are currently in use. Therefore each member still will be a customer of its local utility for the transmission portion of service. The local utility also will be responsible for maintaining the power lines and, depending on the type of service and rate paid, the local utility may or may not continue to read the meter.

Under a voluntary retail open access program offered by Consumers Energy and Detroit Edison, a portion of the utilities was put up for auction. SBAM successfully bid for electricity in both the companies’ service areas.

“It’s important to note that although small businesses will purchase their electricity through the SBAM Energy Store, in partnership with Quest Energy, a federal Energy Regulatory Commission licensed power marketer and a licensed Michigan alternative electric supplier by the Michigan Public Service Commission, distribution of the electricity will remain the responsibility of Consumers Energy or Detroit Edison,” said Doug Carr, vice president of marketing for SBAM.

To be eligible to participate, small businesses must be customers of Consumers Energy or Detroit Edison, have a demand meter with 100 kw or greater in usage — for example, a monthly bill of approximately $2,500 — and be a member of SBAM.

In 2002, only a limited number of companies will be able to participate in this first-come, first-served program.

“Energy deregulation makes it possible for us to offer small business owners unprecedented discounts on electricity,” said Gary Woodbury, CEO and president of SBAM. “We helped shape Michigan’s energy deregulation debate and we are delighted that we are able to aggregate the buying power of our members and become the first association in the state to offer this extremely valuable service.”

Customers should see a lowered electric bill by between 5 percent and 15 percent, depending on the volume of electric usage and the utility territory. Quest Energy will evaluate each business’s electric usage and send an analysis stating the savings level. Savings on the electric bill generally offset the cost of SBAM membership dues and a cost comparison can be performed before deciding to join SBAM, Woodbury said.

To get started, small businesses simply fill out the enrollment form and send it in along with a statement of the last 12 months’ utility data. An evaluation of the business’s usage will be made and a cost savings analysis (CSA) will be drawn up, printed and mailed. After receiving the CSA, a SBAM representative will contact the business to go forward with the transaction.

For further information on the Electric Choice Program, visit the Web site for the Michigan Public Service Commission at http://cis.state.mi.us/mpsc/electric/restruct. To join SBAM or find more information on the program visit www.sbam.org           

Recent Articles by Katy Rent

Editor's Picks

Comments powered by Disqus