MARCH 14TH, 2017 – A THIRD HEARING ON THE METER CHOICE BILL AND A GREAT PRESENTATION ON ELECTRIC CHOICE BY THE MACKINAC CENTER FOR PUBLIC POLICY. Because there had been concerns expressed by committee members about possible shifting of costs from opt-out customers to smart meter customers, today’s hearing in the Michigan House Energy Committee began with a special presentation by Richard Meltzer, a retired PhD statistical researcher and consultant to the U.S. Department of Energy. Dr. Meltzer had also participated as an intervener in the MPSC case U-17053, the case in which the present opt-out fees for DTE were determined. Key testimony included Meltzer’s assertion that the opt-out fees determined in that case were punitive, designed not to recover costs but to discourage opt-outs, and that DTE has been very selective in attaching certain costs to classes of customers while not doing so in other cases, in order to suit its own purposes. He provided specifics in the form of exhibits from the U-17053 case to back up his assertion that the net cost shift between smart meter customers and opt-out customers had been overwhelmingly in the direction of burdening the opt-out customers.
A decision was made to defer voting on the merits of the meter choice bill to allow more time to address concerns of some committee members. Rep Glenn offered an amendment to modify the text of HB 4220, primarily to remove water meters from this bill thereby limiting this bill to energy utilities (electric and gas) that are regulated by the Michigan Public Services Commission. The definition of “traditional meter” was also improved to remove any ambiguity that “traditional meter” could mean anything other than an analog meter. The amendment of the bill’s text was approved unanimously, with understanding that a separate bill will be introduced for the smart water meters.
The Mackinac Center presentation, by Jason Hayes, was a plea for free market principles in the electricity markets. Examples were given that in states where electric provider choice was not capped at 10% (including Michigan between 2000 and 2008) electric rates were much lower than in states where there was no choice or choice capped. In the questions following this presentation Rep Kivella asked if Mr. Hayes believed it was appropriate for smart meter opt-out rates to be set at an arbitrary figure by this legislative committee of “largely non experts” or by the Public Service Commission. The response was that “just at a gut level I don’t like the idea of trusting a Public Service Commission except where you have to, and in this case, setting electricity rates you have to.” He indicated that he would prefer a market based setting of all rates but that the PSC is the system we have.
After the Mackinac Center presentation there were more public comments on the meter choice bill. Complete video of this hearing here.