It will cost Michigan more later if we don’t take the right action now. The cost of adopting comprehensive energy legislation makes economic sense.
Let’s take a look at the current status of Michigan’s electric system:
- Coal and natural gas prices are increasing.
- Michigan’s power plants — the second oldest power generation fleet in the country — are aging with each passing day.
- Michigan’s energy consumption is growing.
- Environmental requirements are becoming more restrictive.
- Michigan will have to buy increasing amounts of power from out-of-state companies on the wholesale market— a risky venture that has caused huge rate increases for electricity consumers in states like Maryland, Illinois and Texas.
If we stick with the status quo and opt to do nothing:
- There’s a chance some new power plants will be built, but they won’t be built in Michigan.
- Michigan will lose jobs and economic development from investments in the construction of new power plants, renewable energy and energy efficiency initiatives.
- Customers will pay billions more for electricity than they otherwise would have to. In the year 2030, for example, we project customers will likely have to pay up to $6 billion for purchased electricity in order to supply enough power to Michigan — $4 billion more than what they would see under the current proposed legislation.
If we adopt the proposed legislation, we will bring positive change to Michigan:
- Building new power plants and updating our aging system ensure we have power when we need it;
- Developing renewable resources — like wind and biomass facilities — will help spur economic development while helping to limit greenhouse gas emissions;
- Creating en estimated 10,000 to 15,800 new, ongoing or supporting jobs for Michigan workers.
- Providing the Michigan Public Service Commission with more power and resources to regulate the public utilities and implement smaller, necessary rate increases overtime to minimize the adverse customer impacts and
- Making it possible for Michigan to avoid being beholden to power producers in other states and the constraints of an interstate transmission system.
- Implementing energy efficiency programs to help residential customers save on average $8 million per year from 2009 to 2030.
In the end, the answer to the question — Do nothing or take action? — is an easy one.
We opt for action.
We opt for new plants.
We opt for renewable resources and energy efficiency programs.
We opt for lower, stable, affordable, electricity rates.
We opt for jobs and economic development.
For more information:
Michigan House of Represenatives, Energy and Technology Committee
Michigan Senate, Energy Policy and Public Utilities Committee
"Rethinking Electricity Restructuring," Peter Van Doren and Jerry Taylor, The Cato Institute, November 2004.
"Electricity 'Restructuring': What Went Wrong," Thomas M. Lenard, Progress and Freedom Foundation, December 2004.
"Electricity Restructuring in Michigan - The Effects of Public Act 141 and Potential Future Challenges," Public Sector Consultants, November 2006.
Michigan's electric utilities should return to a regulated market structure:
"Market Structures and the 21st century Energy Plan," Jeff Williams and Ken Sikkema, Public Sector Consultants, September 2007.
"A Study of Economic Impacts from the Implementation of a Renewable Portfolio Standard and an Energy Efficiency Program in Michigan," by NextEnergy, prepared for the Michigan Department of Environmental Quality, April 2007.
Alternative energy key to Michigan's resurgence:
"Creating Opportunity in a Changing World: Diversifying our Economy, Educating our People," Governor Granholm (D-MI), State of the State Address, January 2008.
The benefits of restructuring remain uncertain for the average consumer:
"Electricity Prices and Costs Under Regulation and Restructuring," Seth Blumsack, Lester B. Lave, and Jay Apt, Carnegie Mellon Electricity Industry Center, Publication no. CEIC-08-03.