Michigan’s utility regulator has new policy recommendations to lower power bills.
The ideas break down into three categories. One involves creating more incentives for utilities to run more efficiently and provide better service. A second is to “rein in unnecessary costs.” The third is increasing chances for competition.
When it comes to rewarding utilities for providing better and cheaper service, the Michigan Public Service Commission argues tying a multi-year utility rate plan to performance and reliability would solve some issues.
Commission chair Dan Scripps said among those issues is frustration with utilities seemingly asking for another rate increase as soon as one gets approved.
“Let’s use that opportunity to also make the bills more affordable and that -- I think through using performance-based mechanisms and tying utility earnings more to core objectives around affordability and reliability and not just spending more to earn more -- I think that has the potential to really move the needle,” Scripps said Tuesday.
Another idea from the Public Service Commission is to get the most out of the existing power grid rather than spending more on building out a new one. The commission said current policies incentivize utilities to build more power lines and other infrastructure, even when there are cheaper and more efficient options.
When it comes to rewarding utilities for providing better and cheaper service, the Michigan Public Service Commission argues tying a multi-year utility rate to performance and reliability would solve some issues.
Scripps said it’s worth asking if a grid expansion proposal is “truly necessary” before approving it.
“Could we get more with a non-wires alternative. Maybe with some customer-sided generation options that make more of the grid that we have and address the congestion or other problems that are triggering the need for investment. But do it in a smarter way and, ultimately, in a more cost-effective way,” Scripps said.
The recommendations are a response to the governor’s request for it to examine ways of reducing power bills. To become policy, they’ll have to get through the state Legislature, where they already have some critics.
State Representative David Prestin (R-Cedar River) said the list seemed more “ornamental” to him without a meaningful rollback of the state’s clean energy laws, which Republicans see as a major obstacle to affordable power for both residents and industry.
“It seems like they’re doing everything they can to not talk about the 5,000-pound elephant in the room, which is Public Act 235 and the carbon neutrality mandate by 2040,” Prestin said in an interview.
He said some of the suggestions, like toughening requirements for data center power generation, could potentially help if tightened further. But he also criticized most of the ideas as doing too little.
For example, some policy recommendations would increase funding for low-income assistance and for making low-income homes run more energy efficiently. Prestin argued those investments would only provide benefits in a meaningful way years down the line.
“The consumer nowadays, they can’t afford a 30-year return on investment. They need relief now,” Prestin said.
