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Roger Victory Roger Victory

Industrial electric customers could choose power supplier under new bill

BY Wednesday, October 20, 2021 04:34pm

A state lawmaker from West Michigan has introduced legislation that would give industrial electric customers an opportunity to select alternative power suppliers in what supporters say is an effort to reduce electric costs and attract investments.

Senate Bill 695 — introduced today by state Sen. Roger Victory, R-Hudsonville, and co-sponsored by fellow Republican Sens. Dan Lauwers and Jim Stamas — reignites the debate over “electric choice” in which utility customers can shop for power from alternative suppliers. 

Michigan currently has a 10 percent cap on who can participate in electric choice. The vast majority of Michigan electric ratepayers are customers of investor-owned utilities DTE Energy or Consumers Energy, except in places that are served by municipally owned or cooperative utilities.

Victory announced the legislation during a virtual press conference with the Association of Businesses Advocating Tariff Equity (ABATE), which represents large power users. 

Victory repeatedly cited Michigan’s relatively high electricity prices as a driving force behind Ford Motor Co.’s recent announcement to invest billions of dollars in electric vehicle manufacturing plants in Kentucky and Tennessee.

“This is an important tool in our toolbox that can help drive innovation and investment and ensure Michigan isn’t left behind,” Victory said. “We’ve seen the consequences of maintaining the status quo.”

The legislation would allow eligible industrial power customers to purchase electricity from an alternative supplier regardless of the state’s 10 percent cap on a utility’s retail sales. The contract with an alternative supplier would have to span at least three years, and at least 80 percent of the customer’s load would have to come from largely in-state generation. The choice customer would also have to give at least five years of notice before returning back to full utility service.

The bill would open up electric choice to new and existing industrial buildings with a peak electric load of at least 2,000 kilowatts, which are often large, energy-intensive companies.

ABATE Executive Director Rod Williamson said the legislation “will help grow the Michigan economy by requiring utilities to actually compete in the market instead of giving monopoly suppliers a high rate of return.”

Victory and Williamson said they are prepared for a legislative dispute with DTE and Consumers, which yield significant lobbying power in Lansing. Ahead of energy reforms that eventually passed in 2016, the two utilities helped quash an initial proposal that would have returned Michigan to a full electric-choice state as it was in the early 2000s.

Utilities also have argued that departing large energy customers could increase costs for all other ratepayers. Williamson countered that the five-year notice provision in the bill gives utilities plenty of time to prepare for load shifts.

As well, Victory expects some “robust discussion” on his bill, but he believes the Ford announcement will help serve as a catalyst to move it forward.

“The future could look bright for Michigan if we get this right,” he said.

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