MMA Saves Michigan’s Electric Choice Option as Energy Policy Passes
MMA achieved victory in the eleventh hour on its primary goal to inject market dynamics in the choice market to ensure the preservation of the 10% choice system.
Working closely with Governor Snyder, MMA and a coalition of pro-electric choice advocates drove a fundamental rewrite of the “choice” provisions during the final day of the 2015-2016 Legislative Session to preserve existing market dynamics for choice customers. The legislation now goes to Governor Rick Snyder for his signature.
In addition to securing MMA’s top priority of maintaining the state’s customer choice option, Senate Bill 437 (Senator Mike Nofs, R-Battle Creek) and Senate Bill 438 (Senator John Proos, R-St. Joseph), make significant changes to state energy regulation, including the construction of new power plants and an increased percentage of electricity to be generated from renewable sources.
“This is a huge victory for customers of Michigan’s energy market,” said Mike Johnston, MMA vice president of government affairs. “Ensuring manufacturers can compete globally and provide low cost energy with reliable capacity is an essential part of a competitive state manufacturing sector. By maintaining the rights of employers to have a choice option, this energy policy will allow manufacturers to produce products at a price competitive with the rest of the world.”
Thanks to MMA's tireless work, the legislation provided significant victories for manufacturers, including the ability to:
- Provide an opportunity for the Public Service Commission (PSC) to consider a three-year forward energy auction as a true market mechanism to purchase energy
- Strike the Senate bill’s overly prescriptive “plan b” requiring manufacturers to pay utilities a capacity charge before being allowed to seek other choice opportunities
- Restore market dynamics and provide limited authority to the PSC to implement a state plan that would preserve both reliability and market dynamics
- Provide strict limitations on how the PSC can calculate capacity charge to ensure only true capacity costs are included; significantly reducing costs
- Eliminate the 10-year fee companies currently pay utilities when electing to go to a choice provider — choosing to pursue choice options will now be free
- Provide predictability by requiring customers to stay for six years through preserving access t0 choice with no exit fee
- Require utilities to submit integrated resource plans to the state showing projections of their load obligations and plans to meet them
- Eliminate all charges utilities could impose on all customers for decoupling for either energy efficiency expenditures or the “any reason” provisions in the Senate bill
- Allow Renewable Portfolio Standards expansion from 10 to 15 percent by 2021 — while this violates MMA's standing opposition to mandates, by the end of 2017 win energy will likely have met this level without the mandate
The approved versions of SB 437 passed 79-28 in the House and 33-4 in the Senate while SB 438 passed 76-31 in the House and 33-4 in the Senate.
Contact Mike Johnston, at 517-487-8554 or firstname.lastname@example.org, on MMA’s successful effort to provide manufacturers with affordable and reliable energy policy.