Michigan Jobs & Energy

FOR IMMEDIATE RELEASE
March 18, 2013

Energy model that emphasizes market stability, reduces risk would achieve Governor’s goal

Former legislative leader Sikkema also calls for diverse electric portfolio in order to achieve greater rate predictability throughout state

KALAMAZOO, Mich. – In reinforcing the Snyder administration’s previous request for an energy strategy that emphasizes “risk reduction,” a former longtime leader in the Michigan Legislature on Monday urged lawmakers, business groups and concerned citizens to embrace a future policy that is adaptable to changing market conditions.

Ken Sikkema, senior policy fellow at Public Sector Consultants in Lansing, emphasized the importance of a long-term, sustainable energy plan that balances rate stability with portfolio diversity.
 
“A lot of variables impact the supply, cost, and reliability of electricity, many of which are not in our control and that simply cannot be predicted with a great deal of accuracy,” said Sikkema, the former Senate Majority and House Minority leader. “A policy that relies on the ability to predict all the variables correctly is inherently risky, because it simply isn’t possible. 

“Consequently, we (at Public Sector Consultants) recommended that Michigan should choose the regulatory and market model that best stabilizes Michigan’s energy market and diversifies its electric production portfolio. The best risk reduction strategy is to return to a regulated utility model for new and existing generation in order to bring greater predictability to the revenue base of all utilities.”

Sikkema is scheduled to speak at the fourth of seven public forums on “Readying Michigan to Make Good Energy Decisions” Monday afternoon at Western Michigan University’s Fetzer Auditorium. 

The 4,500-member Michigan Jobs and Energy Coalition – which comprises groups and organizations such as the Michigan Chamber of Commerce, Michigan Manufacturers Association and the Michigan Regional Council of Millwrights and Carpenters – supports a thorough, fact-based review of Michigan’s current policy, recognizing the delicate but important balance between affordability, reliability, price stability and a diverse set of energy sources.

The MJEC also recognizes the importance of supporting Michigan’s 54 hometown energy providers, a group that comprises Detroit Edison (DTE), Consumers Energy, 41 municipal electric companies and 11 electric cooperatives. These highly regulated Michigan based energy providers generate, transmit and distribute power to millions of families and businesses statewide. 

Michigan’s comprehensive energy policy was signed into law in 2008 after two years of thorough and exhaustive review. The resulting laws have helped to power Michigan’s economic comeback, provided regulatory certainty to encourage infrastructure investment and boosted clean energy investments.

As a result, the state was positioned to diversify its energy portfolio, building power to meet future demand. In fact, DTE and Consumers Energy are investing more than $800 million to upgrade the Ludington Pumped Storage Plant.  Consumers Energy also recently announced its plan to invest $750 million in a new natural gas plant in Genesee County.

Michigan’s comprehensive energy policy, which currently allows up to 10 percent of the energy market to be served by out-of-state energy companies, was established to protect customers from shouldering more than their fair share of fixed energy costs. Fixed energy costs include investment the state’s hometown providers have already made to provide affordable, reliable power to all Michigan residents.  

Over the last five years, more than $4 billion of investments have been made in the state’s energy infrastructure, such as renewable energy projects and power plant upgrades. This has helped provide greater reliability and has guarded against market price volatility for Michigan customers. 

“The changes and fluctuations of the past decade alone demonstrate that a policy built on assuming the continuation of current trends is highly risky,” Sikkema said.

###

The Michigan Jobs & Energy Coalition (MJEC) supports energy laws that adapt to the changing needs of customers and the availability, reliability and affordability of energy sources, in addition to the construction of new baseload power plants and renewable energy facilities and energy policies that create jobs and improve Michigan’s economy.
 
The MJEC is comprised of Michigan’s major utilities, electric cooperatives and municipal electricity providers; major business organizations and industrial customers; labor organizations; economic development interests; and renewable energy and energy efficiency advocates, and many others. Visit www.MichiganJobsandEnergy.com for more information. 

Michigan Jobs & Energy Coalition