After almost a year of negotiations, the Michigan Chamber has won enough changes to support Senate Bill 437. The new substitute bill, combined with some clarifying amendments, greatly improves upon the version of SB 437 that was voted out of committee. Although this bill is not perfect, it is a fair and balanced compromise that addresses three key issues: sustaining customer choice; competitive bidding; and improving reliability.
The proposed legislation now before the Senate would change how the customer choice program will function, but it would not eliminate any customer’s right to choose a qualified electric provider if they are currently within the 10% cap. The proposed substitute keeps in place the grandfather clause that ensures customers who have been on choice prior to the 2008 law remain able to stay on electric choice and expand their electric use, despite the 10% cap. Furthermore, it would permit any customer that is served by an alternative energy provider for their total electric load to be able to expand usage under certain conditions, despite the 10% cap.
Senate Bill 437 now provides the opportunity for non-utility energy producers to offer alternative proposals to the utility company generation projects to ensure that a project cannot be approved by the Public Service Commission unless it meets the most reasonable and prudent standard. The end result of this new competitive bidding process will be a stronger commission review and the introduction of more market forces to ensure more competitive cost for rate payers.
The new and improved version of Senate Bill 437, as will be amended, will significantly increase electric reliability without placing overly burdensome regulations on electric choice customers. Strengthening reliability is critical for job providers because it is impossible to run a business without reliable electricity service.
The 2008 state energy law is not perfect, but many provisions of the current law have worked well. It is now time to revise and update the 2008 law. We believe the proposed substitute for Senate Bill 437, along with amendments, will help move Michigan forward.
If you have any questions, please contact Jim Holcomb or Jason Geer at (517) 371-2100.