Central Michigan University

• Expert sheds light on Michigan's electricity choice issues

Topics in this story: Business, finance, jobs and the economy, College of Business Administration, Finance and Law

SOURCE:
Ted Bolema, finance and law
Central Michigan University
Phone: 517-230-0861
E-mail: bolem1tr@cmich.edu

Michigan residents may not have much of a choice in the future when deciding where to get their energy. If proposed energy legislation is passed it would limit the amount of competition for Consumers Energy and DTE, giving them the majority of the state's consumer base. According to CMU finance and law faculty member Ted Bolema, who also serves as an energy policy specialist with the Mackinac Center for Public Policy, there is room for improvement in Michigan's electricity competition laws. "Introducing electricity choice in Michigan was a positive development, but it can be improved by leveling the playing field for all suppliers," Bolema said.

A few of Bolema's initial thoughts on the subject:

• "The asserted claims that Michigan needs to curtail competition in order for new capacity to be built are overstated. Since Michigan introduced electricity competition, we have seen the construction of 4,000 megawatts of new power generation capacity and three independent power producers are moving forward with plants today. While DTE and Consumers Energy claim they need to suppress competition before they will build a new plant, the competitors they are trying to drive from the market are moving forward with building plans."
• "The claims of future electricity shortages if new capacity is not built soon are overstated. The basis for the claims is the Public Service Commission's Michigan 21st Century Electric Energy Plan, which was issued more than a year ago. Other studies at the same time concluded that current generating capacity is adequate, and the slow economic growth of the last year indicates even less need for additional generating capacity."
• "The proposed legislation appears to be aimed at rewarding the big utilities for building new electric plants; Michigan lawmakers should not forget their track record of building plants as monopolists. When customers can choose their electricity supplier, electricity companies have greater incentives to make cost-effective decisions so that they will not be placed at a competitive disadvantage."
• "Reform legislation should eliminate regulations that are applied unevenly except for the limited situations where there are compelling reasons for the regulation to continue."

Bolema, an expert on business mergers and antitrust law, is a practicing attorney licensed in the state of Michigan and is the author of more than a dozen articles on antitrust law and the law of e-commerce. He was a trial attorney with the Antitrust Division of the U.S. Department of Justice and a special assistant attorney general for the Eastern District of Virginia.

Ted Bolema

CMU Media Relations contact:
Heather Smith
989-774-1702
heather.smith@cmich.edu