The Importance of a Fully Regulated Electricity Market

When it comes to electricity, a fully regulated market is a reliable, affordable market. This is especially true in a state like Michigan, where we face a capacity shortfall if we don’t take immediate and significant action on a number of fronts.

Even people dedicated to free-market principles, like Michigan Representative Aric Nesbitt, have come to realize that electricity is unique and simply too important to people’s daily lives to be subject to the instability of a deregulated marketplace.

The Benefits of Full Regulation

On the most basic level, a regulated electricity market comprises local energy providers that are responsible for the entire electricity process—from generation to transmission and distribution—and are accountable to state government agencies that establish uniform rules and ensure the needs of their consumers are being met.

For electricity, a regulated market has a number of significant advantages:

Capacity: This is a big one. In a deregulated market, power producers and speculators—and some consumers—use a system they don’t have to pay to maintain. By contrast, in a fully regulated market, everyone who uses the system helps bear the cost of maintaining it, and, as a result, local energy providers can confidently invest in improving existing infrastructure and adding new capacity. Michigan is now facing decreasing capacity as nine older coal-fired units are set to retire in 2016. Retirements will continue over the next 10-15 years due to old age and federal regulations. To replace the capacity we are losing in the next few years and maintain electric reliability, Michigan needs to encourage large investments in our energy infrastructure. Restoring full regulation of the electric market is one key step in that direction.

Innovation & Sustainability: Having a fully regulated electricity market also supports investments in innovation and sustainability—both key factors in securing a bright energy future for Michigan individuals, families, and businesses. For example, Michigan’s regulated utilities will have met their 10 percent renewable energy generation goal by the end of this year. A stable regulatory environment helps ensure a path to clean energy generation as the state complies with federal regulations.

Reliability & Affordability: There’s no question about it—a fully regulated market is a more reliable market. Because local electricity producers are responsible for the whole process, they can plan for the future in ways that are simply impossible in a deregulated market. This planning ensures that both electric rates and the supply of electricity remain stable over the long term, helping to protect Michigan families and businesses.

Economy & Jobs: In a regulated electric system, most or all of Michigan’s electricity is produced within our borders by people who live and work here in our communities. Michigan energy—the kind produced by Michiganders for Michiganders—supports local jobs, encourages investment in our communities, and strengthens our state’s overall economy.

Given the benefits of a fully regulated electric market, we believe our state legislators must act to eliminate our current system of partial deregulation so we can all count on affordable, reliable, and sustainable electricity in the years to come—and so Michigan can remain in control of its own energy future.

Have you taken action to support restoring Michigan to a fully regulated electric market? Please take a few minutes to send your email today.

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