A Michigan House committee heard testimony today from schools and business groups concerned about an upcoming ruling from regulators that potentially threatens to violate the intent of state energy law, undermine electric choice and raise costs for utility customers.
A pending decision from the Michigan Public Service Commission – expected in scheduled meetings either Sept. 15 or Sept. 28 — was the focus of the House Energy Policy Committee, chaired by state Rep. Gary Glenn. The MPSC is adopting regulations to implement new state energy law approved last year.
“The Public Service Commission must not overstep its bounds. We cannot allow unelected, unaccountable political appointees to attempt to reverse a law duly approved by the people’s representatives in the Legislature,” Glenn said. “We are the only accountability and recourse the people of Michigan have in this process.”
Glenn said MPSC staff in an Aug. 1 document followed commissioners’ instructions to propose a policy that threatens to require electricity choice providers who compete with Michigan’s electricity monopolies – Consumers Energy and Detroit Edison – to prove they can supply their customers using only electricity generated in Michigan. The electricity could be more expensive than if it were generated elsewhere, driving up utility costs for schools, homeowners and businesses in electric choice programs.
Glenn said the pending MPSC policy would go against the advice of the MPSC’s own attorneys and violate the new state law, the final version of which intentionally did not include the in-state generation requirement. Glenn requested that MPSC staff attorneys testify before the House Energy Policy Committee to explain why they warned against adopting the in-state generation requirement, but MPSC commissioners so far have blocked the appearance.
Glenn said his committee will hold another hearing on the issue Sept. 19.
As stated in a letter to the MPSC from state Reps. Chris Afendoulis and Rob VerHeulen, the final language in Michigan’s new energy law “clearly allows” alternative energy suppliers to use any resource allowed by the Midwest’s federally regulated regional electricity grid manager “to meet capacity obligations without reference to local resources.” The legislators wrote they believe the MPSC’s pending requirement would be “contrary to the legislative intent and final compromise” of the new energy law.
Glenn describes the MPSC plan as a “back door attempt by unelected bureaucrats” to go against the intent of the Legislature and eliminate Michigan’s electricity choice program. He has said if the MPSC proceeds, lawsuits in state and federal courts are a certainty.
Glenn has broad support in his effort to stop the MPSC from adopting a local clearing requirement. Representatives from the Michigan Chemistry Council, the Grand Rapids Area Chamber of Commerce and the Michigan Freedom Fund – in addition to representatives from Clarkston and Howell schools – testified in support of Glenn’s position today.
Others who have sent letters to the MPSC sharing Glenn’s view include the Michigan Chamber of Commerce and the Association of Business Advocating Tariff Equity – a group of major manufacturers including Dow Chemical Company, Hemlock Semiconductor, General Motors, Marathon Petroleum, Pfizer Pharmaceuticals and U.S. Steel.
In a July letter to the MPSC, the Michigan Schools Energy Cooperative said its electricity choice program has saved participating Michigan schools over $140 million – or $35 per student per year. That is money returned directly to the classroom.
“What the MPSC is considering here could force competitors to DTE and Consumers out of business, and customers would have to go back to DTE and Consumers at a higher cost,” Glenn said. “We cannot allow that to happen, because it is the opposite of the intent of state law.”