Senate Members Differ on Competition in Electric Markets

Legislation has been introduced that would allow the Public Service Commission (PSC) to incrementally increase the current 10 percent cap on electric choice as demand increases for alternative electric suppliers governed by that cap.

Senate Bill 235, introduced by Senator Mike Shirkey (R-Clarklake), stands in direct opposition to Senate Bill 247, which was introduced earlier by Senator Ken Horn (R-Frankenmuth). SB 247 largely phases out the ability of major utility customers to sign up with other electric suppliers.

In addition to the incremental increase, Senate Bill 235 allows the PSC to create an auction process on an annual basis to remove a complaint by utilities that they have to be the supplier or provider of last resort. Current law requires utilities to be the provider of last resort for those who are currently in the choice market.

The bill also directs the PSC to create a "true market-driven process" for any new, long-term expansion of generation. Once the Public Service Commission determines Michigan needs more capacity investment, PSC would create a Request for Proposal and allow anyone that qualifies to bid on that investment.

The bill allows aggregation of certain customers. In SB 235, a small city, for example, could aggregate its citizens and act as a unified buyer. The provision would prove especially helpful for residential and small commercial customers.

Senator Shirkey's bill has been referred to the Senate Energy and Technology Committee for further debate and discussion, along with Senator Horn's bill that does the complete opposite by eliminating electric choice unless those using it decide to stay with it.

Senator Mike Nofs (R-Battle Creek), Chair of the Energy and Technology Committee has committed to introducing a compromise proposal for reforming the state's energy law at the end of the month. There is speculation he will keep the 10 percent cap on electric choice competition but with new conditions.

Some of the current debate from members of the Committee includes setting new conditions on people currently in choice competition. The other issues that seem to be holding up any movement include: electric choice and when customers can return; renewable energy and whether there should be a mandate versus goals, and how goals can be effectively drafted; how much competition is good or bad; integrated resource plans and how to set that up; and the authority of the Public Service Commission.

Many groups, agencies and legislators have been working on this issue and the discussions are ongoing. The Committee hopes to unveil some compromise legislation by the end of the month.

posted by PAA Online , Friday, April 10, 2015 11:05 AM
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