Oakland County needs electricity choices, not a monopoly

Categories: Runestad Op-Ed

Sometimes it takes a headline from a completely unrelated subject to bring confirmation and articulation to one’s own issue. That happened recently.

American Airlines announced it will begin matching the fares of other, no-frills airlines.

“More competition, like we’re seeing here, generally means good things for consumers,” said Melissa Hinkle, editor of cheapflights.com, “including more options, lower prices and a range of service.”

It seems obvious: Competition creates pressure to reduce prices and improve services and options.

However, in Michigan, there seems to be a disconnect when it comes to paying for our electricity. We seem to forget the merits of the American free enterprise system and believe that just two large utility providers can supply our electricity. That is false.

And Michigan consumers have been fleeced because of that false belief.

Michigan’s 2008 law, which eliminated the rights of all but 10 percent of Michiganders to choose their electricity suppliers, has pushed our electricity rates up to the highest in the Midwest and high above the national average. Because of our high electricity rates, Michigan has also lost out on an estimated 21,000 newly created jobs each year since 2009.

That is why I am co-sponsoring legislation which would allow all public schools, colleges, hospitals and other taxpayer-funded services to save hundreds of millions in tax dollars annually by joining the energy choice market without it counting against the arbitrary 10 percent energy choice cap.

Additionally, I’ve proposed legislation that allows all hospitals in Michigan — profit and nonprofit, including all inpatient health care facilities — to participate in the state’s electric choice market.

Hospitals and other health-care facilities should have the liberty to choose an energy provider that saves them money, which they can then pass on as savings to citizens or use to purchase needed medical equipment.

I represent Oakland County, which comprises 18 percent of the Michigan workforce. Had Michigan’s electricity rates been on par with other states, Oakland County would have seen an additional 3,780 jobs per year.

Among those in Oakland County fortunate enough to be a part of the 10 percent on electric choice:

  • Oakland County school districts, with annual savings of $8.5 million, or $42 per student each year. Huron Valley School District alone saves $400,000 annually.
  • Oakland County government, which saves $500,000 each year — $3.5 million since 2009 — over what it would have paid if it was forced to stay with Detroit Edison.
  • Some Oakland County businesses, which save 24 percent annually on their electricity bills.

Beaumont Hospital, which was not lucky enough to get on electric choice, reports it would save $3 million annually if given the option to choose its electricity supplier instead of Detroit Edison.

The strong desire to have a choice to leave Michigan’s expensive utilities and sign with competitive electricity suppliers is so popular that well over 11,000 Michigan customers are currently on waiting lists to do so.

Among those 11,000 are Michigan school districts trying to do whatever they can to save money to put back into their classrooms. Today, the 200-plus school districts benefiting from electric choice save $24 million annually — the equivalent of 380 teachers’ salaries. And Michigan job creators, large and small, save $70 million each year. Since 2001, electric choice has saved Michigan consumers $1.1 billion.

Electric competition has worked before in Michigan and it can work again. With the prospects of even more rate increases on the horizon, the Michigan Legislature must take action to provide rate relief, retain jobs, and create a pro-consumer atmosphere to attract new jobs.

Let the governor and your other state leaders know that you want choice, and not more of the same.