Electric Choice Working in Texas and Michigan

Natural gas is at a 7 year low and consumers who have electric choice are cashing in. In Texas, consumers can shop for rates 25-40% lower than what they paid last summer.

The President of the Association of Electric Companies of Texas remarked:

The rates are “pretty competitive” in the deregulated market. Many of the rates are either comparable to, or lower than, rates charged by city-owned electric utilities, electric cooperatives or investor-owned utilities in traditional regulated markets.

In Michigan, the Chamber of Commerce in Grand Rapids points out the success of the state’s limited electricity market and the need to remove competitive quotas that place 90% of businesses in each of the utility regions under monopoly control.

As expected, Chamber members are being negatively impacted by changes to PA 141, the Electric Choice and Reliability Act, that was repealed to re-regulate the electric energy market in 2008. The 10 percent cap enacted in the 2009 legislation limits the amount of business alternative energy suppliers can claim from Consumers Energy’s region. The 10 percent cap was reached last week [in the span of 10 months]. This means that any customer wishing to switch to a supplier other than Consumers will be put on a waiting list until another customer drops service from an alternative energy supplier. Many West Michigan commercial and industrial customers will be excluded from purchasing energy from alternative suppliers now that the cap is reached. Since Consumers’ rates are higher than the prevailing long term rates in the choice, this hurts their ability to compete.

Meanwhile, Citizens’ Electric Co. (whose rate caps have expired) has requested a rate decrease from the PUC. The rate adjustment will mean that a monthly bill for a residential customer using 500 kWh of electricity will decrease by $6.90 or 11.81 percent.