8. What are other states doing regarding rate structures for large volume users?


Comments:

1. States and local governments offer a wide range of economic development incentives to attract new businesses and industries.
2. When deciding where to locate new or expanded operations, the price of energy is one of many factors considered by businesses, though other factors, such as labor costs, taxes, and access to markets, are practically always more important than electricity rates. Several states, including Michigan, have used economic development rates offered by regulated utilities to attract new load through existing or new customers.
3. States and utilities are using Economic Development tariffs to incent short-term increases in new load (through industry attraction or expansion), employment, and capital investment.
4. Economic recovery is also being incented through Brownfield Redevelopment, Urban Redevelopment, and Area Development tariffs.
5. Existing customers can be protected from economic development rates, although it can depend on the specific circumstances. To make economic development rates work without forcing existing customers to subsidize the discounted rates, the utility must bring in new revenue from new load and limit applicability of discounts to the utility's fixed costs that would otherwise be allocated to existing customers.
6. The benefits of the economic development rates can be maintained through a number of rate provisions.
7. Utilities should have the flexibility to determine whether and how to offer such rates with oversight by the MPSC.

- Joint response from Consumers Energy, DTE Energy, and MEGA

Energy Forum Comment

04/24/2013