Consumers Energy CEO: Upper Peninsula Shocks Leading to Questioning of "Hybrid" Michigan Electric Market

The rate shocks seen by Upper Peninsula customers in Michigan from a RMR-type contract, which prompted a deal brokered by the state that will see Cliffs Natural Resources end competitive supply service (click here), "is causing a lot of people to question this hybrid market that we have here in Michigan," Consumers Energy CEO John Russell said during an earnings call.

Russell said that the rate shock which would have befallen Upper Peninsula customers absent the deal brokered by Gov. Snyder happened, "because of the one company going to a different provider."

CFO Thomas Webb also said that retail open access customers currently enjoy a $150 million "subsidy," but that retail choice load may return to bundled service because of policy changes or naturally as capacity prices normalize.