7/31/2019 Michigan Energy Symposium - ABATE Opening
1/16
1
October 15, 2012
7/31/2019 Michigan Energy Symposium - ABATE Opening
2/16
Agenda
2
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
7/31/2019 Michigan Energy Symposium - ABATE Opening
3/16
Agenda
3
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
7/31/2019 Michigan Energy Symposium - ABATE Opening
4/16
2012 Michigan Energy Symposium
4
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
7/31/2019 Michigan Energy Symposium - ABATE Opening
5/16
2012 Michigan Energy Symposium
5
Customer Choice Coalition
Since 2005, advocating for increased competition among electric providers
in Michigan.
www.customerchoicecoalition.com
7/31/2019 Michigan Energy Symposium - ABATE Opening
6/16
2012 Michigan Energy Symposium
6
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
7/31/2019 Michigan Energy Symposium - ABATE Opening
7/16
2012 Michigan Energy Symposium
7
Is the 2008 Energy Legislation Benefiting Customers?
http://www.eia.gov/analysis/studies/electricity/7/31/2019 Michigan Energy Symposium - ABATE Opening
8/16
2012 Michigan Energy Symposium
Source: EIA
8
- 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.
7/31/2019 Michigan Energy Symposium - ABATE Opening
9/16
2012 Michigan Energy Symposium
Source: EIA
9
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!
7/31/2019 Michigan Energy Symposium - ABATE Opening
10/16
2012 Michigan Energy Symposium
10
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
7/31/2019 Michigan Energy Symposium - ABATE Opening
11/16
2012 Michigan Energy Symposium
11
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?
7/31/2019 Michigan Energy Symposium - ABATE Opening
12/16
2012 Michigan Energy Symposium
12
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!
7/31/2019 Michigan Energy Symposium - ABATE Opening
13/16
2012 Michigan Energy Symposium
13
7/31/2019 Michigan Energy Symposium - ABATE Opening
14/16
2012 Michigan Energy Symposium
14
7/31/2019 Michigan Energy Symposium - ABATE Opening
15/16
2012 Michigan Energy Symposium
15
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.jpg7/31/2019 Michigan Energy Symposium - ABATE Opening
16/16
2012 Michigan Energy Symposium
16
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