Michigan Releases Draft Report on Electric Choice Policy Options

The Michigan Energy Office issued a draft report regarding electric choice policy options

Link to Draft Report

The report summarizes stakeholder comments and presents potential policy options, but does not take a position on the merits of any such options.

Of note from the summarized stakeholder comments is that the joint utilities said that an increase in the electric choice cap would reduce the financial stability of utilities and therefore investors' willingness to make long-term investments in new generation

An increase in the cap would allow more customers to move freely between regulated rates and retail access, creating demand uncertainty equivalent to a few power plants of capacity which inhibits long-term planning and investment for reliability, the utilities said.

Under deregulation, the volatility of commodity cycles and lack of cost recovery assurance could lead to financial distress and limit the willingness of deregulated generators to invest in existing and new generation assets, the utilities said. Given that merchant capacity owners and investors are saying the exact same thing in Texas, it's hard to find fault with the utilities' logic on this point, if you believe the Texas capacity owner rhetoric.