The Michigan Jobs Commission plan

On January 8, 1996, the Michigan Jobs Commission (MJC) issued a concise but controversial "Framework for Electric and Gas Utility Reform." 17  In the report, the MJC argued that power rates for Michigan’s industrial and commercial businesses must fall if the economic competitiveness of the state is to be sustained well into the future.

The MJC report contained six important near-term recommendations as well as three additional immediate and long-term recommendations. Near-term recommendations were as follows:

(1) Direct retail access to power generators for new industrial and commercial purchases;

(2) address "stranded costs" to ensure incumbent utilities are ready for competition;

(3) study the replacement of rate of return regulation with rate cap regulation;

(4) allow immediate "file and use" tariffs for non-wheeled power;

(5) eliminate unnecessary environmental programs and other regulatory measures; and,

(6) reorganize the Michigan PSC into three smaller divisions.

The MJC’s longer-term recommendations were as follows:

(7) Create an independent wholesale power pool for electricity sales;

(8) demand retail access for industrial and commercial buyers by January 1, 2001; and,

(9) allow for freedom for mergers and acquisition to take place.