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2007 House Bill 5524: End electric power provider competition

Public Act 286 of 2008

  1. Introduced by Rep. Frank Accavitti, Jr. (D) on December 4, 2007, to end the state’s electric power provider competition law that allows customers to choose an alternative provider, and restrict the ability of customers who leave an alternative provider to get the regulated rates established by the Public Service Commission. The bill would restore the previous monopoly positions held by DTE and Consumers Power companies.
    • Referred to the House Energy and Technology Committee on December 4, 2007.
      • Reported in the House on April 17, 2008, with the recommendation that the substitute (H-3) be adopted and that the bill then pass.
    • Substitute offered in the House on April 17, 2008, electric competition, but would prohibit competing power companies from garnering more than 10 percent of the electricity market, even if they offer lower prices. Reportedly competitors served up to 20 percent of the market after electric choice competition was authorized by a 2000 law, but the number fell to less than 5 percent after the Michigan Public Service Commission adopted rules imposing surcharges on competitors to the incumbent utilities. The substitute makes many other changes as a considerable lobbying and committee negotiations. The substitute passed by voice vote in the House on April 17, 2008.
    • Amendment offered by Rep. Frank Accavitti, Jr. (D) on April 17, 2008, to appropriate $1 million to hire 25 new government regulators to oversee the implementation of this partial dismantling of (limited) electricity market competition. The amendment passed by voice vote in the House on April 17, 2008.
    • Amendment offered by Rep. Mike Nofs (R) on April 17, 2008, to tie-bar the bill to House Bills 5525, 5548, 5549, and 5972 to 5977, meaning this bill cannot become law unless those one do also. The first several bills impose new energy production reduction mandates and alternative energy source mandates on electric and/or gas utilities, and the others provide business tax breaks to Hemlock Semiconductor company and perhaps other producers of polycrystalline silicon used in solar cells and semiconductor chips. The amendment passed by voice vote in the House on April 17, 2008.
  2. Passed 78 to 30 in the House on April 17, 2008, to mostly end the state’s electric competition law that allows customers to choose an alternative provider; allow the utilities (primarily DTE and Consumers Power) to impose surcharges on customers so they can recoup the “costs” incurred from Michigan’s experiment with competitive electricity markets; and gradually phase out current cross-subsidization of residential customers by commercial and industrial ones. The proposed law would prohibit competing power companies from garnering more than 10 percent of the electricity market, even if they offer lower prices.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on April 22, 2008.
    • Referred to the Senate Energy Policy & Public Utilities Committee on April 22, 2008.
      • Reported in the Senate on June 17, 2008, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
    • Substitute offered in the Senate on June 27, 2008, to replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described. This was amended to, among other things, cap at 2.5 percent per year the amount that residential electricity rates would be allowed to rise as a result of phasing out the current law that requires cross-subsidation of residential ratepayers by commercial and industrial electicity buyers. Utilities would be allowed to borrow to make up the difference between that cap and the actual cost of the remaining subsidy, and recoup the debt service payments with higher rates over 10 years. The substitute passed by voice vote in the Senate on June 27, 2008.
    • Amendment offered by Sen. Patricia Birkholz (R) on June 27, 2008, to allow other electricty generating companies to compete against the "imcumbent" utilities (Detroit Edison and Consumers Power) for up to 15 percent of the commercial market, rather than just 10 percent as proposed in the bill. The amendment failed by voice vote in the Senate on June 27, 2008.
  4. Failed 13 to 13 in the Senate on June 27, 2008, to mostly end the state’s electric competition law that allows customers to choose an alternative provider; allow the utilities (primarily DTE and Consumers Power) to impose surcharges on customers so they can recoup the “costs” incurred from Michigan’s experiment with competitive electricity markets; and gradually phase out current cross-subsidization of residential customers by commercial and industrial ones. The proposed law would prohibit competing power companies from garnering more than 10 percent of the electricity market, even if they offer lower prices.
    Who Voted "Yes" and Who Voted "No"

  5. Moved to reconsider in the Senate on June 27, 2008, the vote by which the bill was defeated. The motion passed by voice vote in the Senate on June 27, 2008.
  6. Received in the Senate on June 27, 2008.
  7. Passed 21 to 14 in the Senate on June 27, 2008, to mostly end the state’s electric competition law that allows customers to choose an alternative provider; allow the utilities (primarily DTE and Consumers Power) to impose surcharges on customers so they can recoup the “costs” incurred from Michigan’s experiment with competitive electricity markets; and gradually phase out current cross-subsidization of residential customers by commercial and industrial ones. The proposed law would prohibit competing power companies from garnering more than 10 percent of the electricity market, even if they offer lower prices. See also Senate Bill 213.
    Who Voted "Yes" and Who Voted "No"

  8. Received in the House on July 16, 2008.
  9. Failed 1 to 105 in the House on July 23, 2008, to concur with a Senate-passed version of the bill. The vote sends the bill to a House-Senate conference committee to work out the differences.
    Who Voted "Yes" and Who Voted "No"

  10. Received in the Senate on September 18, 2008.
  11. Passed 25 to 11 in the Senate on September 18, 2008, to adopt a compromise version of the bill reported by a House-Senate conference committee. This would mostly end the state’s electric competition law that allows customers to choose an alternative provider; allow the utilities to impose surcharges on customers so they can recoup the “costs” incurred from Michigan’s experiment with competitive electricity markets; and phase out over five years the current cross-subsidization of residential customers by commercial and industrial ones. The bill would guaranty DTE and Consumers Power at least 90 percent of the utility business in the areas they serve, even if other providers offer lower prices. The bill is tie-bared to Senate Bill 213, which imposes "renewable" energy mandates on utilities.
    Who Voted "Yes" and Who Voted "No"

  12. Received in the House on September 18, 2008.
  13. Passed 78 to 29 in the House on September 18, 2008, to adopt a compromise version of the bill reported by a House-Senate conference committee. This would mostly end the state’s electric competition law that allows customers to choose an alternative provider; allow the utilities to impose surcharges on customers so they can recoup the “costs” incurred from Michigan’s experiment with competitive electricity markets; and phase out over five years the current cross-subsidization of residential customers by commercial and industrial ones. The bill would guaranty DTE and Consumers Power at least 90 percent of the utility business in the areas they serve, even if other providers offer lower prices. The bill is tie-bared to Senate Bill 213, which imposes "renewable" energy mandates on utilities.
    Who Voted "Yes" and Who Voted "No"

  14. Signed by Gov. Jennifer Granholm on October 6, 2008.

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