A Strong Economy Starts With Local Energy
Letter from MJEC Senior Energy Director Steve Transeth in the Detroit News
In response to the “Michigan needs lower energy costs” letter which ran Sept. 6, it should be noted that over the past five years Michigan’s comprehensive energy law has led to fair, stable and reliable energy – in addition to new investment and job creation.
Our state’s energy law, passed by the Michigan Legislature in 2008, guarantees 54 hometown energy providers (including municipally owned and cooperatives) the certainty required to make substantial investments in the state’s generating plants and power systems needed to provide affordable, predictable service to families and businesses in 83 counties.
Michigan businesses throughout the Upper and Lower peninsulas depend on that kind of consistency, reliability and affordability when budgeting for investment and staffing.
Wholesale changes in policy can lead to uncertainty for companies looking to invest in Michigan. Often-times, businesses will delay spending on infrastructure improvements or hiring employees until a new trend in costs can be established.
The energy reforms of 2008 were a direct response to the volatile nature of electric markets, as Michigan moved toward deregulation in 2000.
It had become clear that the deregulated model did not allow for the predictable financing of new baseload generation capacity in Michigan.
Energy planning and investment were placed on hold for much of the first decade of this century.
Meanwhile, out-of-state energy marketers chose not answer the call when Michigan needed reliable energy investment.
When Michigan experimented with deregulation, only 3 to 4 percent of the market entered into a contract with an alternative energy supplier – perhaps fearing one day that market volatility would override the security of the current regulated market.
Michigan can’t sustain a viable long-term energy policy based on the vagaries of short-term wholesale markets. There is little evidence to suggest that a deregulated system would provide lower rates over the long term.
There is, however, plenty of evidence across the country that a deregulated electric system would not respond to long-term energy capacity needs in Michigan.
Growing Michigan’s economy depends on new investments in our state’s energy system.
Let’s learn from history and maintain a strong energy system here at home.
Steve Transeth, senior policy director, Michigan Jobs and Energy Coalition
(Read it in the Detroit News)