The protective veil of government influence that normally shelters Michigan’s monopoly utilities is being ripped away, over and over again, as a string of storms has damaged an increasingly fragile electric infrastructure during the past several months.
Progressive legislators have rightly criticized high electric rates and multimillion-dollar annual profits taken in by government-protected monopoly utilities. But their demands that utilities take “bolder action toward renewable energy” will only ensure further blackouts and drive electric rates even higher as the problems plaguing distribution services extend to generation and transmission.
This February approximately 922,000 Michigan residents lost electric service to their homes, according to the Michigan Public Service Commission. Also, the Commission reported that initially more than 130,000 homes were left without power after a fierce storm in June. In July, wind gusts and storms left “more than 182,000 DTE customers” without service, according to Fox 2 Detroit.
In many cases this year, utility customers have endured service outages lasting several days. It is increasingly clear that the state’s utilities have wrongly spent billions on a much-vaunted transition to green energy sources at the expense of maintaining and repairing existing infrastructure.
The storms have also revealed systemic problems with the state’s oversight of electric systems. The Michigan Public Service Commission, the state agency responsible for overseeing utilities, is also charged with, in its own words, “ensuring safe, reliable, and accessible energy … services at reasonable rates.”
The Michigan Legislature establishes the legal framework under which both the MPSC and the utilities operate.
But MPSC commissioners have routinely approved rate increases for Consumers Energy and DTE over the past decade. These increases have added billions to monthly utility bills. It’s no wonder that Michigan residents pay electric rates that are 28% above the national average and 37% higher than those paid in neighboring Ohio. And for those costs, we still endure some of the least reliable electric service in the nation.
Michiganians already have seen how competitive pressures force the state’s utilities to provide less expensive and more reliable services. Michigan’s utilities, however, are now sheltered from competition by state agencies and protective legislation, thanks to the people’s elected representatives. That protection, along with routine rate increases allow utilities the freedom to earn billions in profits each year.
Progressive legislators, like state Sen. Stephanie Chang, D-Detroit, are adding to the problems with demands that utilities take “bolder action toward renewable energy.” We often hear that the prices for wind and solar are dropping rapidly and that they are now competitive with other sources of energy like fossil fuels and nuclear. But the reality is that wherever states and utilities have focused on expanding renewable energy sources like wind and solar, average electric prices have increased and reliability has degraded.
Together, legislators, utilities, and the Michigan Public Service Commission have advocated for dangerous and expensive “net-zero” schemes to scrap fossil fuels. But these decarbonization plans rush ahead of both technology and science as they aim to shut down the fossil and nuclear energy systems that have reliably and affordably powered Michigan’s economy for decades.
Net-zero programs enrich utilities, and they also waste billions on a rushed transition to wind and solar systems. This happens even as grid watchdogs like the North American Electric Reliability Corporation warn that these schemes put the entire region at “high risk of energy emergencies."
“The disorderly retirement of older generation is happening too quickly,” says NERC CEO Jim Robb. The United States “gets into trouble,” he says, when concerns about global warming overtake equally important issues like price and reliability. In several recent studies and assessments, grid stability experts at NERC have warned that much of the Midwest is at “high risk” of energy supply shortfalls as “coal, nuclear, and natural gas generation exit the system faster than replacement resources are connecting.”
Similar warnings have been sounded by regional grid operators at the Midcontinent Independent System Operator and PJM. Projections by Midwestern grid operator MISO stresses the growing threat of energy shortfalls. PJM points out the numerous problems associated with plans to replace reliable “thermal generation”— fossil fuels and nuclear — with “intermittent and limited-duration resources” — wind and solar.
In the real world, it's not possible for wind and solar to produce enough energy to replace fossil and nuclear technologies. “No matter how much money or ‘magic’ is funneled toward renewables, green energy will always be at the whim of naturally imposed physical limits,” the Institute for Energy Research observes.
Michigan’s legislators and utilities must cease their rushed transition to green energy sources and refocus their activities on providing Michigan residents with low-cost, reliable electricity services.
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