Dive Brief:

• Michigan's lower peninsula faces an energy shortfall and will dip below reserve margins by about 3,000 MW in 2016, according to the Midwest ISO.
• The state's House Energy Policy Committee last week heard testimony from the state's largest energy companies Consumers Energy and DTE, which said the state's partial deregulation scheme has made planning difficult.
• While some consumer advocates want to fully deregulate Michigan's energy markets, others believe bringing back large customers to the state's utilities would help with planning and bring down costs.

Dive Insight:

Michigan lawmakers heard testimony last week on how to deal with a potential energy shortfall next year. While MLive.com reports the shortfall is in insufficient generation for reserve margins, and is not likely to result in actual power outages, almost everyone agrees the state's customer choice law is largely to blame for the state's power woes.

Since 2008, the number of Michiganders that can participate in the energy choice program has been capped at 10%, and some are calling on lawmakers to consider eliminating the program altogether. If that happens, combined with EPA regulations which will shutter nine coal plants in the state, the state will need to bring on additional resources.

But while utilities say bringing business customers back to their systems is the best solution, consumer advocate Energy Choice Now (ECN) is lobbying for more deregulation. According to the group, under Michigan’s system electric rates jumped 3.7% in 2012, more than double the regional average of 1.5%.

"Instead of abandoning choice, it is time to fully embrace it and to allow customers — job providers and families — to get the best possible price on their electricity," ECN Executive Director Wayne Kuipers told the panel.

Currently, DTE and Consumers have about 4,500 customers purchasing power from out of state. If many or all returned, there would not be sufficient generation available to serve them.