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what is electric choice?

Under Michigan’s Electric Customer Choice Program, the supply of power is open to competitive suppliers, known as Alternative Electric Suppliers (AES). The electric transmission and distribution remain under a regulated utility structure. 

The Michigan state legislature passed Public Acts 141 and 142 of 2000, the Customer Choice and Electricity Reliability Act, signed into law on June 3, 2000. They are indexed as Michigan Compiled Laws (MCL), Chapter 460, Section 10a through 10bb (MCL 460.10; See the index for Act 3 of 1939). The law provides “that all retail customers in this state of electric power have a choice of electric suppliers.” It directs the Michigan Public Service Commission (MPSC) to “issue orders establishing the rates, terms and conditions of service that allow all retail customers of an electric utility or provider to choose an alternative electric supplier.”

Since the law took effect in June 2000, the MPSC has issued many orders to implement its various provisions. Retail Open Access (ROA) or Choice, became available to customers of Michigan investor owned utilities beginning January 1, 2002. Customers of Michigan’s member-owned cooperative electric distribution companies that have a minimum demand of 1MW also became eligible to participate.

On October 6, 2008, Public Act 286 of 2008 was signed into law amending PA 141 providing that not more than 10% of an electric utility’s average weather-adjusted retail sales for the preceding calendar year may take service from an alternative electric supplier at any time.” Click here for more information regarding the 10% cap on electric choice.

The rules are different for municipal electric utilities that are not regulated by the MPSC (see MCL 460.10y). Generally speaking, it is up to each municipal utility’s local governing board to make decisions about electric choice for their customers.

 

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