AUSenergy News Update 04/21/2015
Apr 21, 2015

In today’s AUSenergy News Update:  Utilities versus consumers in MI deregulation wars, ComEd supply rates to decrease 6/1, and the coal wars rage on.

Michigan hearing pits utilities against consumer advocates in deregulation battle

Summary: The Michigan House Energy Policy Committee in session this week over a proposal to do away with the state’s partially deregulated energy market. Utilities say returning the state to full regulation would help avoid potential energy shortfalls, while consumers say competition is saving them millions of dollars.

AUS Comment: Michigan struggles due to its unique hybrid energy market, that offers only partial deregulation – capped at 10%. Utilities argue that a return to full regulation will help support supply, whereas consumer advocates want to fully deregulate the market believing competition will help drive down current high prices. AUS supports deregulation and a push into more renewable energy sources to supply energy demand for MI customers.

ComEd: Supply Rates to Decrease June 1

Summary: Commonwealth Edison says that new energy supply rates, established by the Illinois Power Agency (IPA), will result in a monthly bill reduction of $2 for customers on default service, starting June 1.

AUS Comment: Please be advised that, although at first glance, it may look like your monthly bill may go down, the PEA component fluctuates monthly and has been a positive .005 / kWh 11/12 months. Moreover, ComEd has been known to make subsequent revisions after the initial procurement results are released. So, bottom line – pay attention to your bill over the next few months.

The Fall of Coal

Summary: Dozens of coal-burning plants prepare to close amid a barrage from cheap natural gas, green opposition and President Barack Obama’s environmental regulations. Critics like Senate Majority Leader Mitch McConnell (R-Ky.) denounce Obama’s regulations as a “War on Coal,” pointing to the thousands of jobs that have vanished as the coal industry wanes. Coal supporters and some regulators also warn that the loss of so many power plants could lead to blackouts during times of peak demand.

AUS Comment: Opponents to closing down coal-burning plants like to blame Obama’s environmental goals. However, the closings are more of an economic response to the marketplace than anything else. With inexpensive natural gas readily available, and wind and solar power becoming more economically feasible, the market place is changing – and the old guard is loath to see it happen. Yes, it’s hard to see people lose jobs, but change brings that, and people must evolve to meet the times. One has only to look at companies like Polaroid or Tower Records to understand that things change, products change, and if we don’t change, we get left along the roadside. And right now, utilities, like it or not, will need to change to meet the new energy market.

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