News Release: Statewide Advocacy Groups Urge Opposition to Proposed Energy Utility Rate Increase

(LANSING)—Several advocacy organizations today collectively urged all 148 members of the Michigan Legislature to protect the state’s poor and vulnerable citizens from the effects of rate “deskewing” as part of the Legislature’s debate on House Bill 5524, measures which seek to restructure the state’s energy utilities market. The organizations include Michigan Catholic Conference, Michigan League for Human Services, Area Agencies on Aging Association of Michigan, Michigan Association of Non Public Schools, Michigan Interfaith Power and Light, Middle Cities Education Association, and the AARP. Deskewing is a process where utility rates are increased for residential rate payers and lowered for business customers.

In order to protect low-income citizens, the advocacy organizations are urging the Legislature to exempt from deskewing all ratepayers who quality for the “eligible low-income customer rate” offered by the Michigan Public Service Commission. The non-partisan Senate Fiscal Agency has estimated rate increases of 25 to 28 percent for residents if the current deskewing plan were to go into effect.

According to the memorandum, which was also distributed to Governor Granholm and members of the Public Service Commission, “HB 5524 and the renewable energy package will immediately raise electric rates for every Michigan family, putting further strain on the poor, the elderly, and those on fixed incomes. When everywhere we turn the cost of living is increasing—from fuel for vehicles to food for our tables—many Michigan families will simply be unable to afford these energy cost increases. This will place at-risk children in Michigan families in even greater peril.”

Full text of the group’s memo is below:

To:

Michigan House of Representatives; Michigan Senate; Governor Jennifer M. Granholm; Michigan Public Service Commission

From:

Mary Ablan, Executive Director, Area Agencies on Aging Association of Michigan; Brian Broderick, Executive Director, Michigan Association of Non Public Schools; Fr. Charles Morris, Michigan Interfaith Power & Light; Sharon Parks, President and CEO, Michigan League for Human Services; Paul Stankewitz, Associate for Public Policy, Michigan Catholic Conference; Felicia Wasson, Associate State Director for Governmental Affairs, AARP; David Zuhlke, Governmental & Legislative Liaison, Middle Cities Education Association

Re: House Bill 5524
Date: 11 August 2008

As you know, House Bill 5524, which will restructure Michigan’s Energy Utility market, is now in a legislative conference committee. We have opposed this legislation from the beginning, for a variety of reasons. Now that it has, with some differences, been passed by both the House and Senate, we again draw your attention to our greatest concern: the negative impact this legislation will have upon the poor and economically vulnerable citizens of our state.

HB 5524 and the renewable energy package will immediately raise electric rates for every Michigan family, putting further strain on the poor, the elderly and those on fixed incomes. The Senate Fiscal Agency estimates Michigan families can expect to pay 25 to 28 percent—or nearly $200 annually for most families—more for electricity if these bills become law. When everywhere we turn the cost of living is increasing—from fuel for vehicles to food for our tables—many Michigan families will simply be unable to afford these energy cost increases. This will place at risk children in Michigan families in even greater peril.

We understand the “cost of service” concept embedded in HB 5524, where the industrial and commercial subsidy of residential rates will be eliminated. While on the surface, this “deskewing” of rates would appear to make Michigan’s business climate more conducive to job creation and retention, its impact will be lessened as businesses lose customers who because of higher utility expenses can no longer purchase their goods and services.

We believe there is a simple solution to this situation. Exempt all ratepayers who qualify for the “eligible low-income customer rate,” currently utilized by the Michigan Public Service Commission, from the effects of rate deskewing. We respectfully urge the House of Representatives and Senate to make this critical change in the legislation currently before you. We believe this to be a matter of economic justice.

Please contact Paul Stankewitz at the Michigan Catholic Conference (372-9310) or Sharon Parks at the Michigan League for Human Services (487-5436) if you have any questions or would like to further discuss this matter.

Thank you.

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

-- 30 --