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Retail choice takes a hit in Mich., trend debated

Mark watson | S&P Global Platts | 14 july 2017

Matt Mooren and David Cherney, PA Consulting Group energy and utility experts, are quoted in an article in S&P Global Platts “Megawatt Daily” newsletter. The article discusses Michigan Public Service Commission’s decision to eliminate the option for customers of two investor-owned utilities and nine electric co-operatives to utilize alternative electric providers through 2018, and the push-back on retail choice in some states.  

David says retail choice's primary objectives have traditionally "been to improve the affordability of electricity and bring greater range of products and services to the retail customer. However, retail choice has a mixed track record of success at meeting these primary objectives. There are a host of interrelated factors to why this is the case, which include but are not limited to: the degree of wholesale competition within a particular market, customer makeup, and competing policy objectives."

David notes that other forms of choice, such as distributed generation, have prompted policymakers to "take a hard look at what types of market structure provide the greatest value to the customer in providing affordable, reliable and clean energy."

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David concludes: “So, rather than the tides turning against retail choice, the trend we see is regulators taking a holistic look at what policy structures work best for customers within a particular state — which may or may not include retail choice.”

Matt adds that he sees the possibility of an opposite trend: "While there are examples of pushback in [New York], the subset of the market in [Michigan], etc., there are also examples of expanded customer choice in places like [California] with community choice aggregation, [Nevada] and last year’s vote to potential move the state in the direction of retail choice, and examples of large commercial and industrial users paying millions of dollars to decouple their load from the regulated generation resource base of their local utility (e.g., Microsoft and PSE, several casinos and [NV Energy], etc.)." 

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