Archived Story

William Crandell: Playing energy Monopoly in Michigan

Published 4:45pm Tuesday, March 26, 2013

By William Crandell, The Democratic Voice

The people of Michigan pay the highest electricity rates in the Midwest.
It’s time for our state to start looking at significant reform to change our energy policies.
Currently the average power consumer is being victimized by a 2008 state law that allows for just two power companies to monopolize our energy market and basically charge whatever they want.
This is causing Michigan businesses and families to struggle to pay their electric bills every month and these increased energy costs have also become a major hindrance to Michigan’s economic recovery.
In 2008, the Michigan State Legislature eliminated the Customer Choice and Competition program, which had allowed for a multitude of energy companies to compete for the business of consumers.
The new law they passed to replace that program allowed for a 10 percent cap on the amount of power that could be sold competitively here in Michigan leaving the other 90 percent to be provided by just two corporations, Consumers Energy and DTE.
The 10 percent granted to the open market was quickly gobbled up by corporations and the average consumer has been given no opportunity to benefit from an energy competitive market.
Since then the demand for energy has also gone down because of our state’s weakened economy — and yet energy prices continue to rise.
By eliminating the competition and ignoring the laws of supply and demand these two big power companies now have a virtual monopoly and can raise prices at will with little government oversight.
This monopoly regulation as these laws are sometimes referred to has caused Michigan’s basic energy rate to go up by 29 percent since 2007, but in neighboring states like Ohio where there is healthy competition between energy companies they have only seen a 14 percent increase and Illinois has only seen a 1 percent increase during the same time frame.
These states have also witnessed a similar economic downturn as Michigan with factories and businesses closing and yet their populations have been able to benefit from the reduced electrical demand.
Also wholesale energy prices have fallen in the Midwest by about 50 percent because of an increase in new sources of power such as natural gas.
Power and its availability are better than ever before and yet we continue to pay more because of corporate greed.
In order for Michigan to be competitive in new economic markets and attract new businesses we must first become energy competitive and we must reform our energy policies.
Companies are not about to move to a state where they have to pay exorbitant prices for power no matter how many Right to Work laws are passed.
If the Republicans of our state are serious about rebuilding Michigan they will work to reform our power system and stand up to the corruption and greed of these power companies.

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