Michigan Energy Symposium - ABATE Opening

7/31/2019 Michigan Energy Symposium - ABATE Opening

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October 15, 2012


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Agenda

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1) Is the 2008 Energy Legislation Benefiting Customers?- Paul Bedich, Vice-Chairman of ABATE

2) Michigans Electricity Market: We had competition and it worked!

- Diane Katz, Heritage Foundation

3) Michigans Electricity Rates: How the 2008 law raised our rates

- Bob Strong, Clark Hill PLC Attorneys at Law- Dr. Jonathan Lesser, Continental Economics

4) Electric Choice: How it works to encourage utilities to cut theircosts and customers rates!- Alex Zakem

- Rick Coy, Clark Hill PLC Attorneys at Law

Lunch


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Agenda

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5) Competition Works: Whats going on in other states- Dr. Phil OConnor, COMPETE- Bill Massey, COMPETE

6) Customers Want Electric Choice- Jennifer Steiner-Burner, Marathon Petroleum

- Gerhard Goss, J. Rettenmaier USA LP

- Paul Bedich, Chrysler

- Jim Hallan, Michigan Retailers Association

7) Michigans Electricity Market: A Path Forward- Paul Bedich, Vice-Chairman of ABATE


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2012 Michigan Energy Symposium

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ABATEs Purpose

To represent the industrial viewpoint on energy and utility issues before all

appropriate governmental bodies and other pertinent organizations which

affect energy pricing, reliability and terms and conditions of service in

Michigan.

www.abate-energy.org


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Customer Choice Coalition

Since 2005, advocating for increased competition among electric providers

in Michigan.

www.customerchoicecoalition.com


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Energy Choice Now

Energy Choice Now is a coalition of businesses, consumers, suppliers, trade

associations, and other interested stakeholders that are committed to

passing legislation that will raise the current cap on Michigan`s electricsuppliers, increase competition, and lower energy costs.

www.ecnmichigan.com


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Is the 2008 Energy Legislation Benefiting Customers?
http://www.eia.gov/analysis/studies/electricity/


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Source: EIA

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- For the energy supply, each state has the ability to establish a competitive market

where end users can choose from multiple suppliers, utilize a regulated utility or

some combination

-Regulated utilities have specific service territories and are governed by a state

public utility commission (PUC)

- For the transmission, there are Regional Transmission Organizations (RTOs) that

coordinate the delivery across broad regions and there are utilities. Transmission is

governed by the Federal Energy Regulatory Commission (FERC)

- For the distribution, there are local utilities, cooperatives and municipalities that

deliver to the end users.


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Source: EIA

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Regulated model forces customers to buy electricity from a specific utility

at rates approved by the public service commission.

Retail Choice allows customers to choose the supplier of their electricity!


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What has the 2008 Energy Legislation done?

- Utility electricity rates are being set based on ESTIMATED COSTS, WHICH MAY

NEVER BE SPENT, not ACTUAL COSTS

- Utilities are allowed to self-implement rate increases before a complete public

service commission ANALYSIS FOR REASONABLENESS

- Utilities are filing for and receiving continuous rate increases

All Plant

& Costs

Generation

Plant & Costs

TransmissionPlant & Costs

DistributionPlant & Costs

Other

Plant & Costs

Demand

Demand

Energy

Demand

Customer

Customer

Residential

Commercial

Industrial


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Electricity supply competition limited to 10% = no market competition to helpcontrol regulated utility cost

0.530.46

0.41

0.22 0.19 0.160.24

0.19

0.36

0.49

0.29

-0.32

-0.11

-0.58-0.67

-0.91

-0.76

-0.60

-0.80

-0.42

0.15

0.37

0.97

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Feb.

2012

Michigan rates compared to national rates, 1990 to present

Data from U.S. Energy Information Agency

Michigan rates were abovenational average untilcompetition started in2000

Once competitioneliminated, MI electric

rates increase abovenational rates again

Competition

What has the 2008 Energy Legislation done?


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All of which has now resulted in:

Michigans regulated electricity rates being the highest in the mid-west

And

increasing at a rate almost 5 times higher than the national average!


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At this point Michigan has: (a) changed the regulatory model

where now it has failed to ensure we have competitively pricedelectricity rates, and (b) LIMITED ANY ALTERNATIVES BY

CAPPING the market competition AT 10% of a utilitys customer

purchases of electricity.
http://www.eia.gov/energyexplained/images/charts/major_comp_average_elec_price-large.jpg


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We must have an energy policy that supports excellent

reliability, at a competitive price, while protecting the

environment. Above all, our policies must ensure adaptability

to a variety of futures. Governor Snyder

MOTION TO INTERVENE AND PROTEST OF THE GOVERNOR OF THE STATE OF MICHIGAN , FERC Docket No. CP12-491-000

Source: EIA

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Michigan Energy Symposium - ABATE Opening

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