News Release: Catholic Conference Urges Senate Energy Committee to Protect Poor and Vulnerable in Energy Debate

(LANSING)—Michigan Catholic Conference today issued to members of the Senate Energy Policy & Public Utilities Committee a letter regarding the package of energy bills recently adopted by the House of Representatives. In the letter, MCC Associate for Public Policy Paul Stankewitz urged protection of the state’s poor and vulnerable population and suggested the following components be included in any comprehensive energy reform:

• No “cap” or other artificial limit on competition,
• No “file and use” procedure that removes or weakens Michigan Public Service Commission oversight authority,
• Development of renewable energy sources and new power plants through a competitive bidding process, and
• A requirement that the MPSC devise a rate deskewing plan which protects low income residential ratepayers.

Full text of the MCC letter to Senate Energy Policy & Public Utilities Committee members is below:

27 May 2008

Dear Senator:

Seemingly lost in the debate over the Energy package recently adopted by the Michigan House of Representatives, is the impact that moving from some degree of competition to an essentially unregulated monopoly will have upon small consumers and residential ratepayers.

If competition is good for some customers, it is good for all. Given the proposed 10% cap on choice, few, if any alternative energy suppliers would establish or maintain operations in Michigan for access to such a small segment of the overall market. The structure of the cap will also prevent multi-year contracts. This will cost our state infrastructure investment and employment.

The Michigan Catholic Conference further contends that the poor, the elderly, and those on fixed incomes will suffer as a result of the proposed “file and use” process. Regardless of possible MPSC action which may reverse automatic rate increases and return overcharges with interest, utility bills still need to be paid. This weakening of longstanding public oversight is most troubling.

There will be a further burden placed upon our most vulnerable citizens if construction cost overruns are allowed to be passed along to ratepayers. The MCC supports the concept of renewable energy portfolio standards, but charging ratepayers for renewable energy before utilities provide said power is simply not fair.

Curtailment of customer choice would make meaningless any benefit derived from a competitive market. Schools that participate in the Alternative Energy Program administered by the Michigan Association of Non-Public Schools have realized financial savings estimated at $1.3 million since the enactment of P.A. 141. These are funds that have remained in the classroom.

Michigan has historically “skewed” utility rates to the advantage of residential customers. This has presumably not been done out of a desire to be “unfair,” but to protect the poor and vulnerable, who happen to be customers of industrial and commercial ratepayers. The legislation passed by the House of Representatives will create a significant budget crisis for the families of Michigan.

The Michigan Catholic Conference suggests that the following components be included in any comprehensive energy reform:

• No “cap” or other artificial limit on competition
• No “file and use” procedure that removes or weakens Michigan Public Service Commission oversight authority
• Development of renewable energy sources and new power plants through a competitive bidding process
• A requirement that the MPSC devise a rate deskewing plan which protects low income residential ratepayers

Michigan needs an energy system that provides our society with dependable sources of power, protects the environment, promotes economic growth and job creation, and continues historic protection to our low-income citizens.

Thank you for your consideration.

Sincerely,

Paul Stankewitz
Associate for Public Policy

Michigan Catholic Conference is the official public policy voice of the Catholic Church in this state.

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