DTE and Consumers Energy Teach a Sad Lesson on Corporate Cronyism

It could happen next week.

The state legislature is back in Lansing this month and the top priority for a veritable army of special interests and lobbyists is the passage of a sweeping and costly energy reform package designed to kill electric choice and dramatically raise rates on Michigan families.

Lawmakers should reject it once and for all.

You’ve probably seen the glitzy TV ads.  DTE and Consumers Energy, the state’s two giant monopoly utilities, have drafted a massively expensive energy overhaul—Senate Bills 437 and 438, and they expect you to pay for it.  Through the nose. 

DTE and Consumers have broken the bank turning the massive profits they’ve made at your expense into giant wads of campaign cash, huge paychecks for a horde of lobbyists, and an unprecedented public relations and television ad campaign.

But recent developments reveal just how terrible the legislative package really is, and more, what a disservice a handful of high-priced energy executives have done for ratepayers—and their shareholders.

Let’s not mince words.

DTE and Consumers Energy have been at the forefront of an unprecedented assault on Michigan ratepayers.  Their scare tactics, corporate greed, and poor issue management are making it more difficult by the day for Michiganders to pay their electric bills.

When single moms are being forced to choose between back-to-school clothes for their kids or paying to keep the lights on, while their kids’ public schools sound a constant alarm over the prospect of laying off hundreds of teachers just to cover the higher energy costs threatened by the utilities’ legislation, DTE and Consumers’ planning has clearly gone off the tracks.

Back in 2008, the big utilities used the legislature to lock-up 90 percent of the state’s electric sales.  Now they’re back in 2016 with SB 437 trying to eliminate the free market for the last 10 percent of customers (including hundreds of public schools) who shop around and save big on their electric bills. 

Before lawmakers vote to outlaw DTE and Consumers competition, let’s crunch the numbers on how they’ve treated the ratepayers legally stuck with them since 2008.

According to the latest data from the United States Energy Information Agency (USEIA), since 2008: 

  • Consumers has raised residential rates by 42.8 percent.
  • DTE has raised residential rates by 44.5 percent.
  • Overall, Michigan’s electric rates are up 19.8 percent, more than double the U.S. average.
  • At the same time, our neighbors in Illinois – a state where customers are free to shop around for their electricity—have seen a .5 percent decrease in electric rates.

But wait, there’s more.

Since last November, long after the state legislature began discussions on SB 437, DTE and Consumers Energy have instituted or announced $878 million a year in new rate hikes. 

No wonder Republicans and Democrats, public schools and manufacturers, the AARP and chambers of commerce have rallied together to oppose the monopoly utilities’ scheme to take even more. 

Meanwhile, the utilities are burning through their obscene profits at an astonishing and unprecedented rate. 

According to a report from the Michigan Campaign Finance Network, utility executives have pumped nearly $10 million made off the backs of struggling Michigan schools and families into a shadowy nonprofit organization running a fancy PR campaign.

“Wolf,” they’ve cried.  Without a bill essentially outlawing their competition, they’re going to run out of electricity by the end of the year.  Or the end of the next year.  Or whatever other date they pick out of thin air.

But every doomsday deadline they’ve set has passed and now even the Michigan Public Service Commission has published a report admitting that Michigan is not expected to see a shortfall in surplus (that’s extra) electricity “in the foreseeable future.”

Years into their campaign, the utilities don’t have much to show for their wasted millions.  But that’s the thing about a monopoly.  They’ve got an endless supply of ratepayer cash to spend on their pet political projects.  All they have to do is raise your rates.  By $878 million a year, for instance.

The real scandal is that they aren’t playing with house money.  They’re trying to gouge you by essentially spending your own. 

It’s time Lansing stands up for ratepayers.  They should put the final nail in the coffin of this special interest monstrosity, and vote no on Senate Bill 437.

Greg McNeilly is chairman of the Michigan Freedom Fund. 

 

**An alternative version of this originally appeared in The Detroit News.**

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