Lobby Group Claims Lack of Energy Competition Hurts Michigan Businesses

A lobbying group in Michigan, Energy Choice Now (ECN), says the state’s two largest utilities DTE Energy and Consumers Energy are charging businesses higher than necessary rates because the utilities have too little competition.

According to Energy Choice Now, Michigan’s industrial electric rates in May were 23 percent higher and commercial rates were 14.5 percent higher than the regional average. Rates in all sectors are higher than they were one year ago, says the group.

According to numbers from the US Energy Information Administration, as of June 2013, the average price per kilowatt hour nationwide for commercial customers was 10.7 cents; and 7.13 cents for industrial customers.

Between June 2012 and June 2013, the average retail price of electricity for Michigan’s industrial customers went from 7.92 cents per kWh to 8.26 cents per kWh, increasing by 4.1 percent. During that same period, the average retail price of electricity for Michigan’s commercial customers went from 11.12 cents per kWh to 11.57 cents per kWh, increasing by 4.1 percent.

“Meanwhile, rates in Illinois, a state that continued with competition when Michigan re-monopolized its electric system in 2008, dropped by 4.7 percent,” says ECN.

Michigan had a free electric market from 2000-2008, but in 2008 the state set a 10 percent cap on electric competition. The two big utilities have since filed for more than $1 billion in rate increases, according to the Michigan Public Service Commission.

ECN’s business members say that energy is one of their top three cost drivers.

The utilities say regulation and limits on competition help them maintain their infrastructure and make the electric grid more reliable for all consumers.