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Residential bills are climbing, but corporations could see rate cuts of up to 60 percent.
When Ford cited lower electric costs in choosing Tennessee and Kentucky for its coming electric vehicle battery plants, it prompted a Detroit news outlet to examine the why energy was cheaper there. Outlier Media's takeaway was that the Southeastern states' utilities are publicly owned or co-ops, whereas Michigan's are for-profit, resulting in bills inflated by higher taxes and borrowing rates, shareholder payments, and high-dollar projects designed to increase their returns.
Michigan policymakers hoping to lure similar factories don't have plans to address that problem, however. Instead, they propose slashing costs for large manufacturers by up to 60 percent while continuing to raise rates on everybody else.
Outlier has the story again:
A new program proposed to the Michigan Public Service Commission (MPSC) by Consumers Energy would reduce rates for new industrial customers using at least 10 MW of power, and is designed to “help Michigan attract and retain large manufacturing” operations, the company said in a statement. DTE Energy has proposed a similar plan.
The rate reductions appear to be part of a broader state effort that aims to attract new EV battery plants. Tax incentives approved last week by the Legislature could free more than $1 billion in taxpayer funds for auto companies, lawmakers said, and is largely a response to Ford’s recent decision to build new EV factories in Kentucky and Tennessee.
The cuts, which would drop rates currently between about 8-11 cents per kWh to between 4-5 cents per kWh, could represent tens of millions of dollars more in savings for auto manufacturers already taking advantage of those tax incentives.
Meanwhile, the monthly bill for an average electric user served by Consumer Energy jumped up by more than $9.50 in 2020, and it’s requesting a similar rate bump this year. DTE Energy, which faces strong criticism from consumer advocates over its affordability and reliability, is proposing an 11% residential rate increase after an approximately 9% jump in 2020.
The proposal ultimately requires consumers to cover the cost of yet another corporate break, says a Democrat lawmaker who opposes it. A spokesman for the MPSC, however, says that's not the case, as the regulating agency requires that such requests "not lead to higher costs for other customers."
The companies have previously said they already do negotiate industrial rates on a per-project basis "to retain and attract investment in Michigan.”
