Why Michigan needs one … To avoid spiraling electric rates To keep electric service reliable, safe and affordable To meet Michigan's future energy needs To enhance energy efficiency across the state To develop new renewable energy resources To help Michigan attract new businesses and jobs Key elements of a new electric energy policy … Reforming Michigan’s Electric Choice Program to define regulated and choice markets, providing sufficient certainty to invest in new power plants

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• Enabling Michigan’s regulated utilities to build the power plants that our state will need in the years ahead.
• Adopting policies to encourage renewable energy development and utility-managed energy efficiency programs
• Implementing a new, incentive-based regulatory framework

Michigan's future requires a new electric energy policy …

• To avoid spiraling electric rates
  
  States that deregulated their electric industries are experiencing soaring rates
  • Maryland: Baltimore Gas & Electric customers are grappling with a 48 percent increase
  • Illinois: Commonwealth Edison and Ameren customers are seeing average increases of up to 55 percent. Some Ameren customers have seen their monthly bills increase 200 percent or more
  • Virginia repealed its electric deregulation law effective July 1, 2007, to protect customers from rate shock
  
  
  
  
• To keep electric service reliable, safe and affordable
  
  Detroit Edison went from 1994 to 2004 without a rate increase. In fact it was able to decrease its rates 5% per cent for all customers because it was able to save hundreds of millions of dollars by refinancing its debt on Fermi 2.
  
  A new regulatory structure will help to manage future rate increases and avoid the rate shocks that electric users in other states have experienced.
  
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• To meet Michigan's future energy needs
  
  The 21st Century Energy Report, authored by the former chair of the MPSC, lays the foundation to achieve safe, reliable, affordable power for Michigan's future.
  • It projects that the state's demand for electricity will grow roughly 1.2 percent annually.
  • It cites the need for new baseload power plants to be built over the next decade to meet that demand.
  • It acknowledges that the Electric Choice Program is a barrier to new plant construction.
  • It recommends legislative action to address the problem.
  
  Michigan's current hybrid regulatory structure fails to provide investors the certainty they require to invest the billions of dollars new plants would require.
  • Between 2004 and 2006, Detroit Edison and Consumers Energy experienced a swing of over 3,000 megawatts of load from the regulated utilities to alternative suppliers and back again. That's equal to two baseload power plants.
  
  
  
  
• To enhance energy efficiency across the state
  
  
  • Energy efficiency information, programs and tools need to be deployed fairly and cost-effectively to electricity consumers across the state.
    
    
    

• To develop new renewable energy resources
  
  
  • Tapping Michigan's renewable energy resources is a priority for the State.
  • Renewable energy investments will help to further diversify Michigan's electric generation portfolio and its economy.
  • Achieving the renewable energy goals put forth in the 21st Century Energy Plan will require significant utility involvement. But that involvement is hindered by the Electric Choice Program.
  
  
  
  
• To help Michigan attract businesses and jobs
  
  
  • Business growth requires stable energy prices. Customers in deregulated states have seen their electricity prices spiral as wholesale power costs have increased.
  • A new regulatory model would enable special energy pricing programs.
  
  
  
  

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