On March 25, the Michigan House Energy Policy Committee held the latest in a series of hearings on securing Michigan’s energy future. The hearing—hosted by State Representative Aric Nesbitt, who has introduced legislation that achieve many of AMP’s goals—featured the Association of Businesses Advocating Tariff Equity (ABATE).
Unsurprisingly, an advocate for electric deregulation, the Association of Businesses Advocating Tariff Equity (ABATE), believes expanding the current market is the answer to problems like Michigan’s looming capacity crisis. As it turns out, the vast majority of legislators were just as skeptical as we are about this claim.
Throughout the hearing, Chairman Nesbitt jumped in with pertinent questions, many of which revealed the biggest gaps in the deregulation argument. Other Representatives were also just as tough in their questions.
Chairman Nesbitt asked pointedly about the imminent shutdown of coal-fired plants in Michigan due to existing EPA generation emissions standards. Nesbitt also used the current UP capacity crisis as an example of why we should be concerned about a deregulated electricity market. ABATE effectively dodged these questions, stating that the UP crisis created an opportunity for utilities to innovate and cut costs.
Representative Bill LaVoy sparred with ABATE over several points. For example, he asked if the organization would support people buying cars outside of Michigan, just as he advocates for buying electricity from out-of-state energy companies. He followed up by asking if they really think that electricity should be treated like any other commodity—a very good question.
Throughout, ABATE essentially argued that capacity wouldn’t be a problem under an increased or fully deregulated market in Michigan. At one point, Representative LaVoy stated in response to one of these arguments that most of the Energy Policy Committee would rather have power generated in state because of the huge economic impact. When ABATE countered, LaVoy said bluntly: “I respectfully disagree; I think that generation should be in Michigan for jobs and the tax base.” We couldn’t agree more.
Representative Jason Sheppard proved to be another strong advocate for Michigan energy consumers during the hearing. He asked a series of tough questions about the capacity issue, challenging ABATE’s claim that Michigan has the transmission capacity to bring in needed energy from out of state. Meanwhile, Representative Brett Roberts pointedly questioned ABATE about generation capacity and the reality of a deregulated market reasonably meeting Michigan’s increasing power needs.
Representative John Kivela objected to ABATE’s claim that utilities bear no increased costs to maintain the grid because of deregulated energy companies and speculators. Kivela stated: “Quite frankly, I don’t believe that answer.”
Overall, there seemed to be near unanimity and true bipartisanship in opposition to electric deregulation. This is good news for all Michiganders, not to mention our state’s economy.
The fact is, the retail energy marketers who support deregulation don’t provide the reliable, affordable, and clean electricity upon which Michigan’s economy depends. These out-of-state retail energy marketers do not invest in the increased capacity needs of Michigan’s homes and businesses. Without such investment, Michigan consumers face the potential of power shortages, which is completely unacceptable.
Instead of more harmful deregulation, we need a comprehensive, Michigan First energy policy in 2015. If we don’t make that a reality, the federal government will impose its own solution on Michigan. That’s why it’s so encouraging that Governor Snyder and key legislators seem to be coming around.
At the hearing, Chairman Nesbitt also said that the Energy Policy Committee would hold a “full day” of hearings in a few weeks to continue exploring Michigan energy issues. As always, AMP will continue to keep you up-to-date on these hearings as they move forward. Stay tuned!