Will Poll Hurt Legislation Aiming to Give Energy Utilities Monopoly?

Efforts to return the state’s two major electric utilities, Consumers Energy and Detroit Edison, to virtual monopoly status appear to have run headlong into an obstacle, and it remains to be seen how hard it will be to overcome.

Hearings on House Bill 4298, which would eliminate the final 10 percent of generation market competition that the big Michigan utilities have to contend with, had been ongoing. There was a sense the Energy Policy Committee might soon approve the legislation and send it to the full House. Then on April 13, the news media began reporting on a statewide poll showing that 74 percent of voters oppose ending electric competition.

It was no secret that the poll, conducted by Lansing-based EPIC-MRA, was paid for by Energy Choice Now, a coalition that wants to keep competition and opposes House Bill 4298. Supporting the bill is the Citizens for Michigan’s Energy Future coalition, in which Consumers and DTE play a major role, and which was quick to criticize to poll. It claimed that the questions used for the poll left out key issues critical to a comprehensive energy policy.

The following is the first question to which poll respondents were asked to respond:

“Legislation has been proposed to eliminate all electric competition by ending the requirement for up to 10 percent of electric power for each utility to be subject to competition, meaning that all customers would be forced to purchase their electric power from the electric energy company that serves their local area. If this proposal is approved, there would no longer be electric energy choice for customers and Michigan would once again allow existing electric energy companies to operate as regulated monopolies in their service area without competition.”

In response, 74 percent said they’d oppose the legislation, 11 percent said they would favor the legislation and 15 percent were undecided.

Lawmakers on both sides of the aisle might have trouble ignoring a poll showing that three out of four Michigan voters oppose a proposed measure, regardless of who paid for it. Especially when the news media have been giving ample attention to the issue.

Still, the question remains: Will the poll results make House Bill 4298 harder to pass?

“Actually no,” said Robert Kolt of Okemos-based Kolt Communications. “I may be wrong but I think on an issue like this other things have more of an impact, such as economics and other policy considerations. I don’t think it will come down to just public opinion. Also, this debate has just begun, if supporters of the bill can make a good argument to lawmakers that it would prevent cost increases and other potential problems in the long run, that could make a big difference in the end. But no, on an issue like this I just don’t see public opinion being a deciding factor.”

Political consultant Dennis Darnoi of RevSix Data Systems said the poll would have an impact but ultimately other factors would likely play a greater role.

“It won’t necessarily make it harder to pass but it does provide a reason or rationale for them to pause and look at it a lot more closely and carefully,” Darnoi said.

Rep. Ray Franz, R-Onekama, who supports the bill, said the poll might have some impact on legislators, but that the legislation will stand on its merits.

“It might make a difference, but to me this poll was like the polls that show support for renewables,” Franz said. “It’s basically a feel-good poll that represents people who don’t know all the complexities involved with the issue. The pool of people in the U.P. who just got dumped on because of what’s happening at the Presque Island power plant may be more likely to understand.”

“I know that it seems like I’m going against my basic free market principles by supporting this,” Franz continued. “But even Milton Freidman was supportive of some regulated monopolies, such as the military and sewer systems. We need to remember that electricity is not lettuce.”

Sen. Mike Shirkey, R-Clarklake, who opposes the bill, said the poll adds even more weight to the arguments of those who want to see it stopped.

“The Michigan Manufacturers don’t like the idea of getting rid of the 10 percent competition, the Michigan Chamber of Commerce doesn’t like the idea, the governor isn’t in favor of the idea and now this poll shows that most voters don’t like it,” Shirkey said. “It seems that there aren’t many people who support doing it. I think it’s going to be very difficult to get enough votes to pass the bill in the House or in the Senate.”

“In my opinion we should be moving in the opposite direction and expanding choice,” Shirkey added.

The second question in the EPIC-MRA poll was this —

“Under current state law, nearly all Michigan businesses, governments, school districts and families must purchase their electricity from the company that provides service to their local area, such as Consumers Energy, DTE Energy, municipal energy companies or cooperatives. However, under a change a few years ago these electric companies must allow up to 10 percent of the power they produce to be purchased from other competing electric providers. As a way of controlling electric energy prices, do you think there should be more competition between electric energy companies and less state regulation, much like there is in the natural gas and telecommunications industries, should there be less competition and more state regulation, or do you think competition should remain about the same as it is now?”

To this, 53 percent said there should be more competition, 7 percent said less competition and 32 percent said the same amount of competition. A final 8 percent refused to answer. p>Finally, respondents were asked, “If your state legislator voted in favor of the proposed legislation to eliminate all competition once again and allow existing electric utility companies to operate as regulated monopolies, would you be more likely to vote for your state legislator, less likely to vote for him or her, or, would this issue not influence you one way or the other?”

In response to that question, 45 percent said “less likely.” Another 45 percent said it wouldn't influence their vote either way and 3 percent said “more likely.”