Consumers save $240 annually
What could your household do with an extra $240 per year?
A new study estimates that Illinois electricity consumers have saved $37 billion from 1999 to 2013 as a result of increased electricity and natural gas competition. That works out to a total savings of $3,600 per household, or $240 annually. Illinois now boasts the lowest electricity prices in the Midwest.
The report calls these consumer savings "a triumph of market-based public policy." It outlines the process by which the Land of Lincoln transitioned from providing electricity through a state-controlled monopolistic system to one centered on competitive, level and open markets. As centuries of research on trade markets would predict, Illinois consumers win when electricity firms compete for their business.
The report notes that Michigan is a state with "extremely limited customer choice." Not coincidentally, we also have some of the highest electricity rates in the country.
There's a debate right now inside Lansing about whether Michigan will follow a path similar to Illinois and open the provision of electricity to more utilities, or whether it will continue using a legal monopoly to guarantee 90 percent of the electricity market to just two firms.
If Illinois is any example, Michigan electricity consumers should favor opening this state up to the positive cost pressures of a more competitive electricity market.