Michiganders want energy choice; Michigan can’t deliver it

Michigan’s Electric Choice program has more people waiting for it than using it

For a brief moment in the 21st century, Michiganders had freedom of choice in the electric market.

That blip of time lasted from 2002 until 2008, when Public Act 286 reinstituted the protected status of monopoly utilities in Michigan.

Two companies — DTE Energy and Consumers Energy — would split up most of the Lower Peninsula, while two others would take the Upper Peninsula. Among them they’d control 90% of Michigan’s electricity market.

“That change meant alternative energy suppliers were now limited to providing no more than 10% of the retail electricity sold in the state,” writes Jason Hayes, the Mackinac Center’s director of energy and environmental policy, in his Policy Guide to Energy Choice in Michigan, published in 2019.

The Mackinac Center publishes several such policy guides annually. Some of the most recent ones address tax cuts, education and corporate welfare.

Between 2002 to 2008, Michigan residents could use an alternative energy supplier.

But in the monopoly era, things changed for the worse. As Hayes found:

Great Lakes states with choice markets have electricity rates that are, on average, about 23% lower than Michigan’s largely regulated electricity market. The 10% cap on choice has the effect of limiting customer access to lower-priced electricity rates and provides little incentive for the monopoly utilities to make their rates competitively priced.

And what about that 10% of customers who were allowed the right to choose? The Michigan Public Service Commission’s report on electric choice in 2022 reveals there are more people on the waitlist than in the program.

“As of December 2022, there were approximately 5,760 customers participating in the electric choice programs (compared to 5,939 in 2021),” the commission wrote. “As of December 2022, approximately 6,213 customers remain in the queue, an increase from 5,962 in 2021.”

So from 2021 to 2022, the user base shrank while the waitlist grew. Energy choice was a reality for fewer than 5,800 homes in Michigan last year.

After back-to-back mass power outages in February and March, Michigan lawmakers promised reform. Energy legislation offered in 2023 does not begin to address energy reliability. And the bill package that comes the closest would compromise reliability by requiring a 100% transition to renewable energy by 2035.

Never mentioned, in House and Senate energy committee hearings after the storms, was energy choice. Opening the utilities to competition. Ending the monopolies.

As DTE and Consumers continue to spend money on wind and solar, rather than fortify a grid served by reliable energy sources, why shouldn’t Michiganders be able to choose energy companies more committed to delivering the service their customers pay for?

Michigan’s coming energy crisis will not owe to a lack of resources or understanding about how to keep our homes heated and the lights on. It will be man-made, and it will owe to the eagerness of politicians to leap before they look on the energy transition.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.