Electricity Deregulation in Michigan

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Here is some basic information regarding the status of electricity deregulation in Michigan. To summarize, the program amounts to the following statement...

"Award and allocation of energy allotments is on a first-come first-served basis."

Which is taken from this website...
 

The following are some valuable links and below the links I have compiled a summary of the information on those links.  








Deregulation Milestones in Michigan:

Retail choice in Michigan is here and competition will bring savings to electricity users in Detroit Edison. The decision to switch is easy - but to which supplier?  Each customer receives a Ceiling Price for electricity supply based on its Price to Compare. (That is what you would pay the utility if you didn't switch.) This not-to-exceed price per kWh cannot increase through the life of the contract.

You will receive two bills - one from your host utility and one from competitive provider (CP). The CP will provide a monthly invoice to you for electricity supply and transmission charges, and the utility will bill you for distribution charges. The combined bills will add up to be less than what you pay today.

Utilities in Michigan have proposed a Competitive Transition Charge (CTC) to the Public Service Commission in an effort to collect "stranded costs." So far, this charge is zero, and there is no sign that it will increase, although it is difficult to predict with 100% certainty what the PSC will do from year to year. Still, the savings from switching suppliers is great enough that they will almost surely outweigh any future CTC charge.

Regardless of system conditions, CP customers have the same rights to service as those who remain with Detroit Edison.

Electric Choice General FAQs
 
What is Electric Choice?
Electric Choice is a statewide initiative giving customers the option to choose the company that generates their electricity. These companies are referred to as Alternative Electric Suppliers. Providing electricity includes three separate activities: generation, transmission and distribution. Only the generation portion of your electric service is open to choice. Regardless of who supplies your electricity, Detroit Edison will continue to provide the services required to deliver power to your home or business.

How did the electric restructuring process start and why?
In 1992, the U.S. Congress empowered the Federal Energy Regulatory Commission (FERC) to allow wholesale electric customers the opportunity to purchase electricity on the open market. This led to a desire for similar access for all customers. Each state is addressing this issue individually. In October 1997, the Michigan Public Service Commission (MPSC) ordered Michigan's electric utilities to develop plans to allow all customers to choose their own electric generation supplier. In June 1998, Detroit Edison filed its Electric Choice Plan with the MPSC. In September 1999, Detroit Edison began a phase-in of Electric Choice. On June 5, 2000, then Governor John Engler signed legislation enabling electric restructuring in Michigan. On January 1, 2002, Electric Choice became available to all Detroit Edison customers.

How will restructuring benefit the customer?
Electric Choice is intended to bring competition to the electric utility industry. The underlying theory is that competition can do a better job than government regulation in setting prices and promoting efficiency and innovation. All Detroit Edison customers received a 5-percent rate reduction as a result of electric restructuring legislation.

Can I choose an Alternative Electric Supplier?
Yes. All customers have the option to choose the company that generates their electricity. However, customers must meet certain eligibility requirements i.e., a current account, and no special contracts. Otherwise, any Detroit Edison customer is eligible to choose an Alternative Electric Supplier. Note: Electric Choice is not available for unmetered service.

How can I sign up with an Alternative Electric Supplier?
You will need to contact an Alternative Electric Supplier of your choice directly and make arrangements to enroll in Electric Choice. Upon your approval, your new supplier will submit an Electric Choice enrollment to your utility company.

If I change my mind, can I cancel after my new Alternative Electric Supplier submits my enrollment?
You can change you mind without penalty, up to the point you begin receiving service from an Alternative Electric Supplier.

What happens if I cancel after my Alternative Electric Supplier begins supplying my electricity?
There is a $5.00 switch fee to return to Detroit Edison Full Service. When you return, you may be subject to additional charges in accordance with the Retail Access Service Rider Section 5.3 Term, Commencement of Service and Return to Service.

I have already been approached by an Alternative Electric Supplier. How do I know whether they are eligible to offer this service in Michigan?
Under electric restructuring legislation, any company that wants to sell retail electricity in Michigan must be licensed by the Michigan Public Service Commission (MPSC) before they can begin to provide service. 
Will Detroit Edison release my account information to an Alternative Electric Supplier?
An Alternative Electric Supplier can request your usage history, but only if they submit a Customer Information Release Form to the Detroit Edison Electric Choice Supplier Support Center indicating the specific account number(s) and meter number(s). The release form must be signed by the person who is responsible for the account. To protect you against slamming, no electronic signatures will be accepted.

What is "slamming" and how will it be controlled?
Slamming is the unauthorized switching of your energy supply without your permission.  The Detroit Edison Electric Choice customer enrollment process incorporates a confirmation process to help reduce the likelihood of slamming. The electric restructuring legislation enacted in June 2000 made slamming illegal. The Michigan Public Service Commission has established penalties for companies that engage in this practice. For more information, go to the MPSC Web site. The Web site address is www.michigan.gov/mpsc and then locate MPSC Case Number U-12640.

What do the terms "bundled" and "unbundled" mean?
Electric service is traditionally provided on a bundled basis, meaning the generation, transmission and distribution services are provided by an electric utility company on a total-cost basis. Bundled service is also known as "full service." By unbundling, the total cost for the traditional utility services are separated into individually priced components and itemized on customers' bills.

Do I have to participate in Electric Choice or can I still buy my electricity from Detroit Edison?
You do not have to participate in Electric Choice or select an Alternative Electric Supplier. You can still buy electricity from Detroit Edison under rates regulated by the Michigan Public Service Commission. Electric Choice is designed to provide customers with options - and one of those options is to do nothing.

The market for electricity in Michigan is complicated, and for that very reason, the opportunity is huge for the person or persons who take the time to understand it and take advantage of it.  Don't be discouraged by the complexity. You are in the right place before it is the right time. Take advantage of this opportunity, don't let it discourage you.

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