The Building Tradesman Newspaper

Friday, April 11, 2014

'HB 5184 is a bad bill' Statewide utility deregulation plan seems stalled, for now

By Marty Mulcahy, Editor

LANSING – After a day of public comment held on March 25, House Bill 5184, which would deregulate Michigan’s utility industry, remains bottled up in the House Energy and Technology Committee.

And that’s just where it should stay, said Michigan Building and Construction Trades Council Legislative Director Patrick “Shorty” Gleason, who waited 10 hours during that public hearing before given the mike to offer his view of how the proposed regulations would affect the building trades.

“From a construction standpoint, passage of this bill would be extremely harmful,” Gleason said. “I think it’s telling that in states where this kind of utility deregulation has taken place, not one new generating plant has been built, and at existing power plants, the capital investments aren’t being made to improve them. And no one challenged those statements.”

HB 5184 would upend a 2008 state law, which imposed a requirement that 90 percent of state energy be purchased through Michigan-based utilities, while allowing 10 percent to be purchased from other providers. That same law imposed a requirement that state utilities must use renewable energy sources like wind to produce 10 percent of their energy portfolio by 2015 – a part of the law which isn’t affected by this legislation.

State Rep. Mike Shirkey (R-Clarklake), who is sponsoring HB 5184, said the utility deregulation plan is about “energy freedom.” Shirkey told MIRS News Service that he’s seeing a lot of similarities between fighting against unions on RTW and fighting against the utilities on this issue.

Gleason said 4,000 building trades union members are currently at work performing renovation or modification work at Michigan’s fleet of power plants. With that kind of employment at stake, the Michigan Building and Construction Trades Council has partnered with baseline utilities Consumers Energy and DTE Energy and others to educate the public about what a state with completely deregulated power utilities would look like.

House Bill 5184 would remove that 10 percent cap, and allow independent energy providers unfettered access to sell electricity in Michigan. Officials from both Consumers Energy and DTE Energy have maintained that throwing the state’s utility market open to alternative energy providers would allow those out-of-area utilities to unfairly cherry pick between high value and low value customers. That energy would be produced out of state, imported to Michigan, and lead to the sale, reduced use or outright abandonment of our state’s power plants – and the jobs that go with them.

DTE Energy Executive Vice President Ron May told the Michigan Building and Construction Trades Council’s Legislative Conference last month that DTE plans to spend no less than $1.5 billion per year on its power plants and infrastructure over the next five years.

“We don’t want to sell our plants,” said May. He called the deregulation plan “shortsighted. It won’t lead to more prosperity. We’re asking you to support us in fighting the idea that deregulation is a good idea for our state.”

Consumers energy Senior Vice President Dan Malone spoke to the trades at the same conference. He was even more blunt than May. “HB 5184 is a bad bill,” Malone said. “If it becomes law, DTE and Consumers will be forced to sell our power plants in two years. Then the state will be forced to buy power back at market rates. This is absolutely the worst place for us to be. We need to keep Michigan’s existing energy policy in place.”

Gleason said it’s a good sign that this bill hasn’t moved out of committee for more than a year, and he doesn’t expect it to move this year, either. Todd Tennis, an IBEW lobbyist for Capitol Services, agreed. “There just doesn’t seem like there’s the will in the Legislature to move the bill on electric choice this year, but that could change,” he said. “But the issue is not going to go away. As long as there is money to be made by out-of-state power generators who have money signs in their eyes, there’s going to be pressure on lawmakers.”

Tennis said the state IBEW believes that a continued “regulated monopoly” is the best path forward for the state’s utilities, for both consumers and electrical providers.