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House Dem's energy package to cost consumers hundreds next year alone

By Nick, Section News
Posted on Fri May 09, 2008 at 02:12:06 PM EST
Tags: (all tags)

Remember that alternative energy legislation the Democrats in the House moved last month? The package that's designed to grant Consumers Energy and DTE a new statewide monopoly, killing competition and driving smaller providers out of business?

Looks like a study was just completed by the non-partisan Senate Fiscal Agency. The Associated Press is reporting:

Gary Olson, the director of the Senate Fiscal Agency, told a senate committee that Consumers Energy customers would see an increase of more than $200 next year if the bills, which were approved by the state House last month, were signed into law.
That doesn't include the rising cost of coal, he said.

No problem. We're all pretty flush here in Michigan these days. Especially the 7.2% of would-be workers who can't find a job. An extra $200 spike to fund a Big Energy takeover... no sweat.

Although I can't help but wonder... if Consumers jumps $200, what's DTE going to do?

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House Dem's energy package to cost consumers hundreds next year alone | 5 comments (5 topical, 0 hidden)

Michigan's Energy Crisis (none / 0) (#1)
by triznik on Fri May 09, 2008 at 03:41:23 PM EST

Michigan residents can expect higher utility bills thanks to re-regulation approved by the Legislature. For more information, here is an excerpt from a message I sent to the Detroit News in response to a published commentary by David W. Joos, president and chief executive of CMS Energy: I appreciate Mr. Joos' stated commitment to Michigan. However, I am skeptical about his assertion, "What we need now is a model that encourages significant investment in new power generation in Michigan so we can remain competitive with plentiful, affordable power. Our company alone has a plan to invest $6 billion in Michigan in the next five years, but we can't fully implement that plan without a revised energy policy model." Mr. Joos hopes that Michigan will be "able to move back to a cost-effective, regulated model." CMS has announced plans to build a coal-burning power plant at it Karn/Weadock Generating Complex near Bay City. Meanwhile, CMS is lobbying the Michigan Legislature for regulatory relief that will adversely impact competition in Michigan and effectively enable CMS to shift the cost burden for its new plant construction to utility customers. It is noteworthy that CMS Energy's principal subsidiary, Consumers Energy, recently sold the Palisades nuclear plant to Entergy Corporation for the bargain price of $380 million (roughly one-tenth the cost of a new nuclear plant), which represents $242 million for the plant itself, $83 million in nuclear fuel based on 2006 market prices, and $55 million in related assets. Consumers Energy agreed to buy back the plant's electric output under a 15-year contract. I suspect that a principal motivation for this sale was relief from labor costs at the Palisades plant. In 2006, Entergy stated on its web site its intent to "make employment offers to all 500 of the plant's active employees at their same salaries for 18 months. Entergy has also committed to maintain the benefits programs for the employees for 36 months." The Nuclear Regulatory Commission recently approved a 20-year renewal of the license to operate the Palisades nuclear plant. Good for Entergy, which is headquartered in Louisiana and operates 11 nuclear power plants. CMS's plans to build a coal-fired power plant--maybe not so good for Michigan utility customers, despite Mr. Joos' rhetoric.

Some more context (none / 0) (#2)
by mcdirt on Fri May 09, 2008 at 04:02:37 PM EST

Some context from the Senate Fiscal Agency report:

-- Appalacian coal was priced this week at $99.50/ton, up from $45/ton in early 2007.
-- Natural gas prices have increased by 45 percent since early 2007
-- The construction of one new $1.5 billion coal-fired electrical generating plant will lead to an overall electric rate increase of approximately 5 pecent for Detroit Edison and 7 percent for Consumers Energy (my note: these increases IN ADDITION TO increased coal costs and IN ADDITION to any deskewing costs for residential ratepayers)

Also, while Nick broadly labels the it "alternative energy" legislation, most of the additional costs he cites are not from alt energy at all, but from the "deskewing" portion of the package, and a pending rate case. NONE of the increases cited by Nick include future increases in the cost of coal or the likely carbon taxes or constraints that each of the three likely Presidential hopefuls has supported.

The renewable energy portion of the package would establish a modest amont of power that IS NOT dependent on the rising cost of fossil fuels. It would be a modest hedge against an uncertain energy future.....sort of a savings bond to cling to while the rest of your portfolio is going to he**.

The energy efficiency portion of the package would help cushion the abovementioned rate increases by actually SAVING MONEY for homeowners and businesses by reducing consumption and demand.

Usual Republicon spin (none / 0) (#4)
by NoviDemocrat on Fri May 09, 2008 at 08:51:54 PM EST

Nick tries to tie the rate hikes to the renewable energy standards when they have little impact on the costs. The major elements of the increased costs come from the massive new coal power plants, which Republicons insist we need, and the demand from the utilities for re-regulation that will provide them the certainty of revenue to justify the construction of those plants. If Republicons were actually concerned about holding down utility rates, they would oppose those massive new coal power plants.

JGillman (none / 0) (#5)
by triznik on Fri May 09, 2008 at 09:54:42 PM EST

I guess we agree on this one (ANWR).

Mmmm by mcdirt, 05/10/2008 09:37:27 AM EST (none / 0)

House Dem's energy package to cost consumers hundreds next year alone | 5 comments (5 topical, 0 hidden)

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Raise the curtain.

House Dem's energy package to cost consumers hundreds next year alone

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