Electric restructuring is the process of breaking up, or unbundling, of electric service into three separate components:

Under a restructured system, electricity generation will be (1) priced separately from transmission and distribution, (2) customers will be able to shop around for and choose which generation source (electric supplier) to purchase electricity from, and (3) you may be able to buy electricity from one of several sources. A customer may be able to buy power from:

-the local electric utility
-companies located in other parts of Michigan
-companies located in other states
-other electric power marketers or brokers

Your local electric utility company will continue to deliver the electricity to your home or business.

The higher cost of electricity in some parts of Michigan –  averaging about 15 percent higher than in surrounding states – was seen as a barrier to economic development. Also, the state was running short of power. Because of the uncertainty caused by inaction on restructuring legislation in Michigan and nationally, no new power plants were being built here. More people, more electric appliances and more industry just needed more electricity. There were political and business pressures to get this done.

The law uses carrot-and-stick tactics to get electric companies to help build a competitive market. By giving the utilities the right to continue to recover their stranded costs – those investments that would become uneconomic in a competitive environment – framers of the law were able to get their agreement on limits to their market power – their monopoly of the market they serve – and thus increase the chances that competition will develop. By making it possible for other companies to enter the market and make money, the chances increase for additional generating facilities in the state. And, in fact, that is already happening.

Michigan investor-owned electric utilities regulated by the Michigan Public Service Commission (MPSC) are expected to formulate proposals for implementing electric choice programs, which will take effect for all their customers no later that January 1, 2002.  These proposals are being considered by the MPSC for approval soon.  Customers served by rural electric cooperatives will have electric choice available at a later date. 

There will be costs for making changes to the billing systems and for helping customers understand how they might benefit from competition.

You get to choose the generation supplier of your electricity. Your current utility will continue to maintain the wires to your house or business and that part of the industry will remain regulated by the MPSC.

You can choose not to choose. Just stay with Edison Sault as long as you want. We will continue to provide you electricity at regulated rates.

It will take several years for a competitive electric market to develop. While the restructuring legislation is designed to encourage entrepreneurs to develop additional generation options, the actual construction of power plants and additional electric transmission capacity will take years.  It is expected that most marketers will enter a region, targeting large customers first and residential customers later.  

Can a customer switch suppliers anytime and how much will it cost?

Currently, there is not restriction on changing suppliers. A customer may switch to electric choice service for a time and then return to the regulated utility company. If they do switch back to the regulated utility company, the customer must remain with that regulated utility company for at least 12 months. The customer’s contract with the energy retailer may include terms and conditions covering the requirements for switching from one company to another. If so, the customer would have to abide by these requirements. The regulated utility company may also charge a fee, if approved by the MPSC, to switch a customer from one electric supplier to another.

The Upper Peninsula and the Lower Peninsula are considered to be different markets. The legislation requires that the MPSC complete a market power study in the U.P. within one year of passage of the bill. This will be the first time market power issues in the U.P. will be given serious consideration by the Commission.

There will be more information on the bill, because the services now included in one charge will be "unbundled." That means that there will be separate line items for transmission, distribution, generation, and other services. Breaking out the elements of your electric bill will make it easier for you to compare other choices for power supply.

Edison Sault still has responsibility for your meter.

You call the same utility that provides your power now. No matter who you switch to, your lines will be maintained by Edison Sault.

MPSC = Press Release Subscriptions
P.O. Box 30221
Lansing, MI 48909

Also, contact Michigan utility companies directly and ask them how to stay in touch. Many Michigan utility companies have their own Web sites. You can check the contact directories of the MPSC Web site, to see if particular Michigan electric utility companies have Web sites, at:

  http://www.cis.state.mi.us/mpsc/electric/index.htm

Michigan has not made any special provisions for renewable energy suppliers. Some states have proposed various policies to encourage the continued development of renewable energy sources, but none of those proposals have been enacted in Michigan.  Marketers will likely promote any renewable energy supplies that they may have in their generation portfolio.

Yes, the Edison Sault hydroelectric facility generates approximately 225,000,000 kilowatthours per year. In addition, Edison Sault purchases approximately 150,000,000 kilowatthours per year from the U.S. Army Corps of Engineers hydroelectric facility. This accounts for about 35% of the total electricity used by Edison Sault customers.