The Michigan House of Representatives and Senate have passed a controversial energy bill that could impact the budgets of schools and local governments.
The pressure to take on the bill first came from the state’s major utility companies, DTE and Consumers Energy. They wanted lawmakers to crack down on the electric choice market, in which businesses buy surplus electricity and sell it at sometimes a lower cost. They deliver the energy using the major utility companies’ infrastructure.
The state’s main utilities wanted reform to happen before they invested in new energy plants and infrastructure. DTE Energy said the vote is a significant step toward securing long-term reliability of the state’s electric system.
News of the legislation left choice customers, which include a majority of local school districts, with concerns.
“As a parent, I am concerned,” said Mark Burton, the Executive Director of the Tri-County Alliance for Public Education.
He says in Wayne, Oakland and Macomb, almost all schools buy from alternative electric suppliers because it saves them millions of dollars. Utica Community Schools alone saves about $1 million a year.
“If that savings is taken away it is going to impact teacher salaries and layoffs,” said Burton.
Republican Rep. Peter Lucido from Macomb County said Gov. Rick Snyder pulled an all-nighter with Republican representatives, pressuring them to come up with a compromise. Lucido says he told the governor the bill needed to protect schools and local governments.
“We have our jails, our county building, our community colleges.Those two Macomb Community College campuses save about half a million dollars a year on choice. Why would we give that up? What are we going to back fill it with taxpayer dollars? I don’t think so,” said Lucido.
He says they then came up with a compromise that addressed those concerns.
“We preserved choice,” said Rep. Michael Webber, a Republican from Rochester Hills. “We preserved some of the savings that our school districts have.”
Critics say it will lead to an increase in cost for choice customers, including schools and local governments, by allowing the Michigan Public Service Commission to increase fees for choice customers as soon as next fall.
“Instead of the legislature getting involved, they are going to allocate the responsibility of changing costs of your electricity to someone else,” said Sen. Patrick Colbeck, a Republican from Canton. “That is a cowardly way of doing it."
Sen. Colbeck says the bill was unnecessarily rushed through.
“They wrote legislation over a matter of hours. Who knows what kind of poison pills are in the bill?” said Colbeck.
"The legislation sustains the 10-percent electric choice market in Michigan while protecting energy reliability for all Michiganders. It also supports the transition of the state’s energy infrastructure to modern, cleaner generating technologies with provisions to maintain affordability,” said John J. Austerberry, DTE Energy Manager of Corporate Communications. "It addresses these issues in a fair and constructive way and provides a framework for the state to plan for its own energy future. We embrace our role in delivering that future for Michigan’s families and businesses.”
The Senate quickly passed the bill just over an hour after the House passed it. It will now head to Snyder's desk to be signed.
Michigan Gov. Rick Snyder released this statement:
"We now have a statewide energy policy that will save Michigan residents millions of dollars on their electric bills, alleviate concerns about having enough capacity to power the daily activities of 10 million people and find new ways to use our existing energy grid more efficiently. This policy also allows for more consumer choice in our growing market. The bills protect our environment by making it easier for Michigan to develop its own energy sources, instead of buying coal from various states. Our energy will be more affordable, more reliable and more green. This achievement continues sending the message that Michigan has a very bright future."