DTE CEO: Michigan Governor, Legislative Leaders Understand Need for Choice Cap

During an earnings call yesterday, Gerard Anderson, DTE Energy President and CEO, said that proponents of raising the electric choice cap are not getting any traction, and that Michigan's new governor, Rick Snyder, in particular understands that choice advocates are looking for a "free option."

"I think you could probably look at some things that have come out in state political regulatory rags here in the state over the past few days, that there's been some commentary on that [the lack of traction for a change in the choice cap]. We also know the leadership of the House and the Senate and the energy committees in both quite well. We know what their priorities are ... they've said themselves, and I think [if] you talk to them, they'd say this isn't one of their priorities for the energy agenda," Anderson said.

Anderson conceded that the amount of load which has submitted a request to switch to choice, but has been denied due to the current choice cap, is more than a few percent, but said that the volatile nature of commodity rates requires the choice cap.

"I think what the policymakers realize is that if you go back just a couple years ago, there was zero request [to switch], and choice was falling to zero; and now there's request for more than 10%. The whole point of a cap is that commodity markets are volatile, and if you set policy tied to volatile commodity markets, you don't have a policy. And I think our regulators and legislators understand that, so the reason I think it isn't high on their agenda is for that reason. I think one person in particular who understands it is our governor. It didn't take him long. He's an ex-businessman and in particular a high-tech businessman with a financial background. It took him about five minutes to come to the conclusion that, 'Oh, well, what people are looking for here is just a free option, right?' And the answer was yes, and he said well, that's not a policy. So I think that he understands the issue, as do the leaders in the House and the Senate," Anderson said.