Choosing a New Electric Company Isn't Much of a Choice
Our fall wind storm brought record low pressure and hurricane strength winds that left thousands of homes and businesses across the region in the dark, some for days!
Power crews worked around the clock, but some homes had electricity restored sooner than others. A viewer called us frustrated with her provider. She said her neighbor had a different company and had power back a lot sooner. Can she switch to that company instead?
The answer and reasons why are tonight's Fact Finder Report.
When it comes to choosing your power company, you make the choice when you decide where you want to live.
The Michigan Public Service Commission sets the boundaries for electric utilities.
So once you pick your home's location, the provider is also set.
Cherryland Electric Co-op General Manager Tony Anderson says, "First of all it's a rule, a state rule. Every utility is a monopoly based on the service territory they serve. It's necessary to keep rates low."
It comes down to two main factors: infrastructure costs, and product immobility. Cherryland alone has $76 million invested in poles, wires, transformers and trucks and power companies. That means these poles and wires belong to one utility. They can't take their product somewhere else. And if another company came it, they'd bring their own poles and wires. Also utilities spread their costs over time over their customer base. If that customer base fluctuated, utilities say so would the price of power.
You may remember talk of more customer choice several years ago. The idea was to let alternative energy companies basically rent space on existing lines to give customers another choice. But for the residential customer it never evolved.
Anderson says, "if someone could have made money allowing you to pick a different supplier it would have been done. Michigan had that available. That's no longer available."
While every utility maybe a monopoly in Michigan, Anderson says it's very regulated and unlike other monopolies, profit is not the driving factor for electric co-ops. He says, "if I make too much profit, that's just money I have to give back later."
That is exactly what happened last month. Cherryland returned $1.5 million to its customers or members.
Now keep in mind, Anderson says there is still electric choice for larger customers, like the Great Wolf Lodge, because they use such a high volume of electricity.
What do you think about this? There was an effort to give homeowners more choice, but it never took off. Do you think think these kinds of monopolies are good for residential customers? Leave your comments below.
