Cable television. Telephone service. Now, electricity.

The federal and state governments have a lousy record when it comes to deregulating public utilities. Costs have increased, and service has certainly not improved. Now, major problems associated with electrical deregulation are coming home to roost in Michigan, with DTE Energy leading a statewide effort to change the way Michigan law governs electrical production and distribution.

A group called the CLEAR Coalition – CLEAR stands for Citizens for Long-Term Energy Affordability and Reliability – was formed, it said, because Michigan’s electric deregulation law, Public Act 141 of 2000, “has failed to deliver and is leading Michigan down the path toward a California-like crisis, with the potential for blackouts, huge rate increases and bankrupt utilities.”

Building trades unions are onboard with supporting the CLEAR Coalition. Nancy Moody a DTE Energy representative, spoke to delegates at the Michigan Building and Construction Trades Council’s Legislative Conference on March 2.

“I think the building trades have become involved with CLEAR for the same reason we did,” she said. “The current electric system in Michigan is threatened. It is threatening our jobs and the reliability of the electrical system. But we have an uphill battle in trying to amend PA 141.”

CLEAR pointed out that the goals of Public Act 141 (A Republican-backed initiative) included:

• Introducing electrical choice for all residents and businesses in Michigan by allowing people to choose their own electricity supplier.
• Lower costs and more jobs.
• Bringing affordable and reliable electric power from financially stable Michigan utilities.

Instead, Moody pointed out:

• Unless something changes, when the law’s rate freeze expires in 2006, Detroit Edison’s residential rates could go up 30 percent.
• Michigan utilities have about 3.7 million residential customers. After four years under PA 141, only about 60 of them (yes, 60), were being served by an “alternative energy supplier,” according to the Michigan Public Service Commission. The vast majority of Michigan small businesses also have no choice.

CLEAR concludes that unless Michigan legislators fix PA 141, residential customers who were supposed to have choice and affordable rates will end up with just the opposite: no choice and significantly higher rates.

Moody said the current law allows alternative energy providers to “strip” business customers – and about 15,000 have been cherry picked from DTE Energy. As a result, DTE’s earnings for 2003 have dropped 31 percent. If a business or residence is too small or too far out of the way to be profitably serviced by an electrical provider, they can be ignored by everyone except the established utilities.

Michigan’s established utilities, Moody said, are unable to compete because they are caught unfairly between a regulated and a deregulated environment. Established utilities are still regulated, but the competing electrical providers are not. When it comes to maintaining infrastructure and servicing power plants – areas of tremendous interest to the building trades – unregulated companies have less revenue to upgrade power production facilities, and less incentive to stick around because the system allows them to seek greener pastures for customers, without maintaining service to customers they have.

“It’s a political process of transferring wealth from one corporate stakeholder to another, you and I are not going to get any benefit out of it,” said Tom Boensch, secretary-treasurer of the Michigan Building and Construction Trades Council, to delegates at the March 2 legislative convention. “Deregulation is bad for Michigan’s utilities, and deregulation is bad for Michigan’s construction industry.”