Giving Michigan consumers power to choose power

Michigan policy makers must give consumers the power to freely choose their power provider if this situation is to be remedied. Customer choice can be guaranteed by undertaking two types of reforms:

1. Legal reform: All laws which currently prohibit the free interaction of buyers and sellers must end. In particular, exclusive franchise territories, which give certain utilities monopolies over different service areas, must be forever eliminated as an uncompetitive restraint of trade. Any company, from any region (including outside the state) must be given the right to sell power to any customer that requests service.

2. Technical / structural reform: Technological and structural impediments to customer choice must also be eliminated. Specifically, alternative power providers must be allowed to use the transmission and distribution facilities, which all customers contributed to constructing, to provide final customers with power. Such an "open access" approach will require that policy makers ensure that the prices utilities charge for access to those poles and lines are fair and non-discriminatory. Once this is accomplished, all other price and rate controls can be eliminated.

These legal and technical/structural reforms are almost all that are required to unleash the forces of competition. At the request of Governor Engler, the Michigan Public Service Commission (MPSC) has recently released a blueprint to reform the Michigan electricity marketplace that proposes to get this process moving quite rapidly. While the MPSC’s blueprint represents a sound foundation for the creation of a more competitive electricity sector, some important changes will be required before the plan can be sure to guarantee Michigan citizens the full benefits of choice.