DTE Exec: Deregulated Markets "In Trouble"; Slams Ability of Market to Cope With "Stresses"

Deregulated energy markets are "in trouble" and cannot provide for Michigan's energy future, DTE Energy CEO Gerry Anderson said during an earnings call on Friday.

Discussing efforts to expand electric choice in Michigan, Anderson said, "I don't think the administration or the Public Service Commission see expanded choice as a stable base to build the future of Michigan's energy infrastructure around."

"The Governor is pretty clear. He sees it as a free option, kind of like having the access to your fixed rate mortgage and your variable rate mortgage both, whenever you want it. It's just not reality," Anderson said.

"And when you try to build an important industry around a structure that's unstable, you get bad results. I will tell you, watching deregulated markets try to deal with the stresses that emerged this year and the stresses that are coming as markets get tighter, they better watch it," Anderson said

"Those markets are in trouble and I think an increasing number of observers believe that. I don't think Michigan has an appetite for stepping into that,"

Though Anderson did not cite particulars, eastern organized markets have recently received approval for waiver of the $1,000/MWh price cap (either on an LMP basis or via individual make-whole payments), while ISO New England's forward capacity auction failed to attract sufficient resources to meet the mandated reserve margin.

It's also hard to counter DTE's comments about stability and energy infrastructure investment when you've got merchant generators running around saying Texas is facing blackouts unless the government steps in to help get capacity built

"[T]here's a bill that's been introduced in the House on deregulation, we see those pop up every now and then. I don't think there is serious interest in that and I don't think it'll clear committee," Anderson said.