Electricity restructuring may provide choices

By 2002, Central Michigan-area electricity customers may have choices about who supplies their electricity and its cost.
Mary Jo Kunkle, media and public relations specialist for the Michigan Public Service Commission, said restructuring the electric industry would provide more consumer choice in electric services, while more competition may reduce electric rates.
Michigan gas companies have already started customer choice programs. Consumers Energy, MichCon, and South Eastern Michigan Company (SEMCO) have already voluntarily started using the programs.
Kunkle said the electricity industry is now working on providing more choices for consumers.
"By Jan. 1, 2002, all Detroit and Edison and Consumer Energy electricity customers will have more choices," she said.
The Michigan Public Service Commission, the state agency responsible for regulating electric utilities, has issued several orders that will phase in competition in the electricity industry over the next few years.
Kunkle said the idea of restructuring the electricity industry started in 1996.
In 1996, Gov. John Engler "forwarded a recommendation for reform for electrical and gas utilities to the legislature, moving to a more competitive market.
"The governor indicated support for electrical restructuring for more choices of suppliers and to provide a competitive market in the state in Michigan," Kunkle said.
Through the interconnection of the country's transmission systems, electricity can be routed regionally. With this system in place, customers will be able to buy electricity in a regional, competitive marketplace if they choose, or they may elect to stay with their current electric company.
If a customer chooses to switch to a different company, the customer's current electric utility will still be responsible for maintaining the distribution lines leading to their home or business. The customer's current utility will most likely be the company to respond to any power outages, storm damage or service problems, Kunkle said.
Kunkle said some important aspects of the restructuring still have to be worked out, but said she thinks electric utilities generally support the changes.
"It's my understanding they've supported the opening of the market," she said.
Mount Pleasant's electricity comes from Consumers Energy, Inc., of Jackson. Kevin Keane, Consumers Energy public information director, said the company provides electric and or natural gas in all or part of all 68 counties in the Lower Peninsula.
Consumers Energy, which offers choice of suppliers to its gas customers, supports restructuring of the electricity industry, Keane said.
"Everyone will have choice after 2002," he said. "Customer choice is being integrated gradually. The phasing-in choice makes for a smooth transition.
"We embrace that competition, because customers are not required to switch suppliers. Our goal is to continue to be the provider of choice for our 1.6 million customers."
Keane said only electrical suppliers are affected by the changes, not distributors. Consumers Energy will still deliver the energy to their customers and collect a delivery fee.
"Gov. Engler has publicly supported customer choice and creating a competitive market, reaffirming Consumers Energy's decision to move forward to customer choice. We agree with Gov. Engler that the next step is to turn the MPSC orders into law," Keane said.
Meanwhile, customers of the Detroit gas company, MichCon, already have a choice if they want to switch their gas supplier.
MichCon Manager of Media Relations Cheryl Conway said the company's offer of customer choice is independent of the choice initiatives in the electricity industry.
MichCon's Gas Customer Choice voluntary program allows all customers to choose a new gas supplier. However, the program is currently limited to 150,000 total customers who can enroll on a first-come, first-served basis.
MichCon serves 1.2 million customers in 55 Michigan counties.
"The large industrial and commercial gas customers have had the choice to buy their gas on the open market, and contract with companies like MichCon to bring it to their door," Conway said. "Now the choice is being offered to residential customers."
Customers can enroll in the program through their chosen gas supplier from Nov. 1, 1999 to Feb. 29, 2000. A gas supplier may contact you directly, or you can call 1-877-831-3375 for supplier contact information.
"We believe customer choice programs are good experiments and good opportunities to learn, in advance of creating any long term legislation," Conway said.
But Senator Joanne Emmons, R-Big Rapids, said the legislature's attempts to restructure the electrical and gas industries earlier this year failed.
"We tried to tackle that and got into such a hassle," she said.
Emmons said the legislature could not decide how to deal with stranded costs. If a total restructuring took effect, Emmons said, energy-generating plants may move out of the state for cheaper rates, while suppliers would have to buy their power from someplace else.
"Why build a power plant in Michigan if you can go in Indiana and Ohio and have cheaper power?" she asked.
Emmons said suppliers cannot "eat the cost" of a total restructuring, so the legislature didn't move forward with a plan. Instead, voluntary programs which only allow 2.5 percent of its customers to have choice in suppliers are in place.
The limit of giving choice to only 2.5 percent of residential customers will not hurt Michigan's economy significantly, Emmons said.
Greater competition "would lower electric costs, because Michigan has higher electric costs than surrounding states, and certainly higher than the south," she said. "It's anticipated with more competition that you would buy your electricity out of state."
Emmons said she thinks any offers of customer choice in the electricity and gas industries will remain an issue of each individual company and the Michigan Public Service Commission, but not state law.