Senators report 'breakthrough' on Michigan energy bills

LANSING - Sponsors of Senate bills to revamp Michigan's energy and electricity legislation said Tuesday they've reached a breakthrough in drafting the legislation that has brought the Michigan Chamber of Commerce on board.

Sens. Mike Nofs, R-Battle Creek, and John Proos, R- St. Joseph, said they now expect the Senate will pass their legislation soon after the election, on Nov. 10, and send their bills on to the state House.

Rich Studley, president and CEO of the Michigan Chamber of Commerce, said his group representing about 6,700 Michigan employers is now in support of Senate Bills 437 and 438 because the latest substitute bills represent "a dramatic improvement over what was reported out of committee" in May, and "we're confident that it will sustain choice, improve reliability and move the state forward."

What impact the legislation will have on Michigan's "electric choice" market — which is limited to 10% of the otherwise regulated market — has been a major point of contention as lawmakers have struggled with the bills for more than two years.

Michigan last passed significant energy legislation in 2008 and officials say a revamp is needed because of changed federal emission standards and the planned shutdown of several coal-fired power plants in Michigan. The state's two biggest utilities, DTE Energy and Consumers Energy, say they need to build new capacity but will only build to serve their own customers, not the 10% of the market served by alternative suppliers who buy and sell surplus electricity.

The legislation would require alternative suppliers to either produce their own electricity, have contracts with producers to guarantee a supply, or pay a charge to the major utilities to allow them to purchase capacity.

Nofs said the legislation will encourage utilities to move to time-of-day pricing, under which customers pay higher prices at peak demand times and lower prices when little electricity is being used. Taking advantage of that pricing will allow many residential customers to reduce their electric bills, Nofs said.

Both DTE and Consumers have been installing smart meters across the state that can be used for time-of-day billing.

Proos said he wants time-of-day billing to be optional for residential customers.

Spokesmen for both utilities say they support the latest versions of the legislation.

Dan Bishop, a spokesman for Consumers Energy, said “updating the state’s energy law is a vital issue facing Michigan," and the company appreciates the lawmakers' work.

"Michigan families and businesses deserve legislative action which ensures electric reliability, energy affordability, and promotes clean energy and energy waste reduction," Bishop said. "We urge the legislature to take timely action in their near future on this issue.”

John Austerberry, a spokesman for DTE, said the company supports the latest substitute bills because they address "the big issue of reliability in a fair way" to all the groups affected.


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