Overview
Retail competition in Michigan became a reality in June of 2000 with the passage of theCustomer Choice and Reliability Act.Customer switching began in 2001 and continues today.There have been ups and downs in Michigan as the Public Service Commission has worked through issues that have impacted choice such as stranded cost recovery.

History and Future of Retail Competition in Michigan
On June 3, 2000, Governor John Engler signed into law the Customer Choice and Reliability Act. The Act, which took effect June 5, instituted an immediate 5% rate reduction for Consumers Energy and Detroit Edison residential customers and a rate cap through 2005. Commercial and industrial rates were capped through 2003. The law provides for choice of electric supplier, required unbundling of rates for commercial and industrial customers, and required electric utilities to expand available transmission capacity by 50%. The Act also required any utility with control of more than 30% of a market’s generating capacity to divest, sell and/or transfer capacity. or transmission assets.

In 2002, Consumers Energy sold its transmission assets to Michigan Electric Transmission Company (METC) LLC. In 2003, Detroit Edison sold its transmission system to International Transmission Company (ITC). Both utilities did this to comply with the requirement of Public Act 141 that utilities either join an ISO or divest transmission to mitigate market power. Both METC and ITC have integrated their systems into the MISO footprint

A substantial number of customers in Michigan have exercised their option to choose an alternative supplier.Switching was highest in 2004 when alternative suppliers served over 25% of Detroit Edison’s load and 18% of Consumers Energy’s load. Market forces have reduced switching since then, but declining wholesale power prices coupled with anticipated fuel cost increases for both Detroit Edison and Consumers Energy bundled customers should breathe new life into this market.

Electric Restructuring Is a Success
Click here to review Michigan Electric Restructuring Is a Success, a white paper written by the Customer Choice Coalition.

Regulatory Update
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