Best economic sparkplug is lifting energy choice caps

August 30, 2010
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Once again, the governor’s penchant to play favorites comes back to haunt Michigan residents, in the form of planned energy rate increases by the state’s monopoly holders, Consumers Energy and DTE Energy. This comes even after skyrocketing rates that amount to more than 20 to 30 percent hikes for businesses. And it comes at a time when even the Michigan Public Service Commission has announced its anticipation of an increase in demand in every sector for 2010-11.

The additional slam on recession recovery can certainly be traced back to Michigan’s compromised package of energy legislation in 2008, which capped choice options to just 10 percent of all Consumers or DTE customers. The “choice” opportunity capped out within the first year. (The package did little to effectively promote or provide for alternative energy, with renewable energy goals set far below those of other states.)

Grand Rapids Business Journal lauds the bipartisan effort of State Sen. Wayne Kuipers, R-Holland, and State Rep. Roy Schmidt, D-Grand Rapids, for their work in preparing companion bills to both legislative houses that will lift those caps on allowing choice to 25 percent. Business Journal readers may wonder why any cap is necessary but at least it’s a start.

The crybaby act already is evident by the state monopolies, which readers may recall bellyached about “stranded costs” for a decade as legislators worked diligently to hammer out change (and for which the utilities won payment).

The Business Journal reports this week of Schmidt’s unveiling of a business coalition, Electric Competition for Michigan Now, to assist his legislative effort. Schmidt refers to the 2008 cap as a proven disaster, and notes that from 2000 to 2008, there was no limit on electric power delivery over the grid in Michigan by independent power companies. Schmidt emphasizes that lifting the cap also will offer Michigan new technologies and cleaner, renewable energy innovations to help customers control costs. That also was the opinion of the Business Journal at the time the package of empty promises was signed by Gov. Jennifer Granholm.

Schmidt notes national research showing that 80 percent of new wind-farm development occurs in states offering competitive markets … and that wholesale energy prices dropped in those states by 50 to 60 percent.

West Michigan business owners are well advised to join in.

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