Michigan law subsidizes lower rates for certain industrial customers

Michigan electricity consumers will subsidize lower rates for industrial manufacturers. Large electricity consumers in Michigan have complained that the state’s electricity rates are too high, particularly compared to neighboring states with robust competitive retail electricity markets. So rather than lift the 10 percent load limitation for competitive access, the state has enacted a law effectively requiring residential and small commercial customers to subsidize reduced electricity rates to certain industrial customers. But the measure was effectively written to accommodate just one manufacturer, Hemlock Semi-Conductors, one of the largest electricity consumers in the state. “The availability of this new long-term industrial load rate will allow companies with high energy costs to continue expanding in Michigan, providing opportunities for economic growth and more jobs for Michiganders,” Gov. Rick Snyder said. House Bill 5902, or Public Act 348 of 2018, gives the Public Service Commission authority to decide the lower rates, which are not based on cost-of-service, providing specified requirements are met.

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