- GOP gubernatorial candidate John James wants to limit utility rate increases and fire regulators under new plan
- James also wants to allow more electricity to be purchased on an open marketplace
- The plan follows a similar reform proposal offered by Democrat Jocelyn Benson
Republican gubernatorial candidate John James has unveiled a plan he said would limit rising electricity rates in Michigan and improve reliability by increasing competition and repealing renewable energy standards.
“Energy costs and utility rates in Michigan are out of control,” James said in a press release. “Since 2019 residential electricity rates alone have increased by over 28%. We talk all the time about competing with Mexico and China, but we can barely compete with other states in the Midwest.”
As governor, James’ plan calls for requiring electricity rate increases to remain at or below inflation, and he pledged to fire members of the utility regulatory board the Michigan Public Service Commission who have consistently approved rate hikes and replace them with his own picks.
James also called to “repair, harden, or bury” electrical lines that have repeatedly failed. That echoes increasing calls for utilities to bury vulnerable infrastructure to shield them from weather impacts, something utility providers have argued would not be cost-effective.
His plan came about five months after Secretary of State Jocelyn Benson, his Democratic rival in the gubernatorial election, released her own plan for further regulating utilities. Her plan called largely for reforms to the rate-setting process handled by the Michigan Public Service Commission.
Both candidates have called for tying utility profits to the companies’ performance and cost efficiency.
RELATED:
- Jocelyn Benson: Ban Michigan utility spending to influence politicians
- Jocelyn Benson, John James offer contrasting plans on tariffs, AI, jobs
- Court strikes Trump order that forced Michigan coal plant to stay open
Other aspects of Benson’s plan included a “grid audit” to identify weaknesses and infrastructure needs in the state’s power supply, as well as a statewide “home energy bills relief program” to assist Michigan residents with weatherizing homes, upgrading insulation, replacing outdated heating and cooling systems and expanding flexible payment plan options.
Some aspects of James’ utility plan have already been expressed, including his proposed reforms to the approval process for data centers and a repeal of the law that requires utilities to meet a 100% carbon-free energy standard by 2040.
The amount of money ratepayers receive after an extended outage would also increase under James’ plan, and he said he would have utilities “use smart-meter data to prioritize chronically failing neighborhoods.”
Last week the MPSC raised the credit ratepayers receive in an extended outage from $35 a day to $42 a day.
More competition?
James’ plan also would seek to increase competition faced by Michigan’s utilities by raising a 10% cap on alternate electricity suppliers to 30%.
His campaign argues the change would give “more residents the opportunity to choose their electricity provider while protecting consumers from hidden fees and abusive contracts.”
The state allows up to 10% of a utility’s electricity to be purchased by customers from a marketplace of alternative energy companies, who are licensed but not directly regulated by the MPSC.
The cap was set by the Legislature in 2008, and less than 6,000 utility customers use an alternative supplier today — most of whom are industrial sector businesses, according to the MPSC. The first-come, first-serve program has held at its regulatory limit for years, meaning additional customers are held on a waiting list.
Fourteen states and Washington, DC have deregulated electric utility markets, while another six give ratepayers a limited ability to choose their utility, according to Electric Choice, an energy marketplace.
In a statement, Consumers Energy spokesperson Katie Carey called electricity deregulation a “failed policy” that she argued raises prices.
“Consumers Energy opposes any increase in electric deregulation in Michigan. Our customers are seeing inflationary increases in their daily lives from groceries to gas prices and deregulation will only increase residential customer bills,” Carey said.
Political hurdles
Many of the proposals from James and Benson alike would require changes only the Legislature can push through. DTE and Consumers Energy are some of the most prolific donors in the state and reform efforts have been stymied in the past.
The two utilities — which provide energy to a majority of homes and businesses in Michigan’s Lower Peninsula — have spent millions of dollars in Michigan elections to boost candidates they favor, largely through nonprofits that don’t have to disclose their donors but can spend and give unlimited sums.
In 2023 and 2024, DTE or Consumers-affiliated PACs gave to 120 of 148 legislators’ campaigns or leadership funds, nearly $560,000 over two years. The contributions were bipartisan and almost evenly split between lawmakers and related leadership PACs from both major political parties.
They’ve become a political target in recent years as Michigan lags behind its neighbors in the frequency and duration of power outages.
Proposal 2 on the November ballot, promoted by a coalition called Michiganders for Money Out of Politics, would ban utilities and their executives from spending in Michigan elections, among other measures.
James, who has not endorsed the proposal, called for different measures in his plan, including to “strengthen disclosure of utility lobbying and political spending, expand competitive bidding, and bring greater transparency” to utilities dealing with state government. James’ campaign declined to provide additional details.
Republish our articles for free, online or in print, under our Republication Guidelines. Questions? Email republishing@bridgemi.com
