Lansing Considers Electric Deregulation in First of Two March Hearings

On Tuesday, March 18, the Michigan House Energy and Technology Committee met to discuss HB 5184, a bill that would fully deregulate Michigan’s electric utility industry. Yesterday’s hearing was the first of two, with the next hearing set for March 25.

During the hearing, the committee heard from witnesses on both sides of the electric deregulation debate. The Alliance for Michigan Power remains hopeful that lawmakers are beginning to understand how deregulating electricity could be harmful for Michigan jobs, communities, families, and our economic resurgence.

Tuesday’s hearing included some key takeaways:

Greg Gordon, a financial analyst and head of ISI’s Power & Utilities Research Group, noted that since California’s energy crisis in 2000, no state has made any meaningful move toward deregulation. In fact, Arizona and Nevada have both since returned to a regulated electric market.
Gordon also said the “ability to control price volatility is eliminated under a deregulated scheme.” He also mentioned plant shutdowns in Illinois could lead to higher electric rates for consumers, not to mention lost jobs and greater energy unreliability.
Another witness, Bob Manning, spoke about his experience with electric deregulation in Texas. The former energy director for large Texas grocery chain H-E-B, Manning originally supported deregulation, but after seeing its effects, now wishes Texas had never deregulated. Manning stressed that electric deregulation hasn’t worked for Texas customers or businesses—and that regulated rates grew much less than deregulated ones in the 2000s.
Patti Poppe from Consumers Energy cited Montana’s move to deregulate their electric market, which has been referred to as the worst piece of public policy that has ever passed in the state’s history by Montana Governor Steve Bullock. Poppe also cited New Jersey’s and Maryland’s electric deregulation experiments, in which prices went up 55 percent and 110 percent, respectively.
When Representative Bill LaVoy brought up concerns of plant closings in Illinois after that state deregulated their electricity, pro-electric deregulation supporters could not guarantee Michigan plants would not close under a deregulated electric scheme.

While supporters of electric deregulation made a substantial case for HB 5184, lawmakers and others present at the hearing were generally skeptical as to how it would play out in reality. With the next hearing set for March 25, it’s more important than ever to speak out against this risky plan. Tell your legislator to oppose HB 5184 and protect Michigan’s future.

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