Feature Articles

More large electricity customers in Michigan than allowed by law would select retail providers if given the opportunity, according to a yearly report by the state Public Utility Commission. See: Status of Electric Competition in Michigan report.

A bill pending in the Michigan senate would abolish the 10% cap on an electric utility’s average weather-adjusted retail sales set aside for alternative suppliers.

It may be unlikely that Senate bill SB588, introduced in September by Republicans Jonathan Lindsey and Ed McBroom, has a chance of passage in the Democrat-controlled body.

Retail open access for commercial and industrial customers began in 2002 in Michigan.

The 10% cap on sales by alternative suppliers is reset annually based on sales in the preceding year.

The electric choice programs for Consumers Energy, Upper Michigan Energy Resource, Upper Peninsula Power, Indiana & Michigan Power and DTE Electric were fully subscribed at the 10% cap in 2025, according to the annual report of the commission, mostly by industrial customers with some commercial users.

More than 5,100 eligible large power customers in the state wait in a queue to participate if space becomes available, almost equal to the current number in retail programs.

The commission’s report said approximately 5,517 customers were participating in the electric choice programs at the end of 2025, a gain of three from the prior year.

Their usage represents about 2,172 MW of demand, a decrease of about 15 MW from 2024.

The state had 20 licensed alternative suppliers at the end of 2025, with seven of those actively serving customers.

Constellation New Energy is the dominant retail provider in the state, serving the most customers and delivering the most load.

Utilities and alternative suppliers must demonstrate to the commission that they have enough resources to serve the anticipated needs of their customers four years forward or face a capacity charge payable to the utility that becomes the provider of last resort.

The power service territory of DTE Energy has the most retail customers served by alternative suppliers of any utility in Michigan.

Those customers totaled 4,390 at year-end 2025, down by about 1%. Load served by alternative suppliers was 1,310 MW, up 1%.

If the 10% cap did not exist, choice participation would be approximately 13% in DTE Electric’s service territory, based on the 2,030 customers waiting with a total annual load of 1.5 million MWh.

The electric load served by retail choice in the Consumers Energy service territory was 708 MW at the end of last year, a decline of less than 1%. The number of customers served declined by less than 1% to 957.

Retail choice participation would have been about 24% among the eligible customers in Consumers Energy’s service territory last year, little changed since 2023.

Another 957 potential customers for alternative suppliers wait in the queue, with a total annual load of 5.2 million MWh.

Year-on-year changes were also slight among retail customers in the territory of Upper Peninsula Power (UPPCo.) Electric choice load rose less than 1% to 14.058 MW in 2025, and the number of customers fell by 1 to 64.

Choice participation was approximately 12.5%. A commission spokesman said the amount of retail load could be above the 10% cap because of fluctuations in weather-adjusted retail sales figures used to determine a utility’s cap, and whether participating choice customers take additional electric load.

Without the cap, choice participation would be about 15.9% in UPPCo’s service territory, based on the 29 customers waiting with a total annual load of 23,112 MWh.

The electric choice load served in the Indiana & Michigan Power service territory decreased by 14% to 50.94 MW for year-end 2025. The number of customers served by alternative suppliers decreased by 21% to 48.

Choice participation was approximately 10.76%. Without the cap, that proportion would rise to about 14%, based on the 31 customers waiting with a total annual load of 92,108 MWh.

Cloverland Electric Cooperative has one choice customer with yearly load of 71,511 MWh, and no customers in the queue in its service territory.

Any utility serving fewer than 200,000 customers and that did not have any load served by an alternative supplier during the period of April 20, 2013 to April 20, 2017 is not subject to a retail choice program.

The commission said in its annual report that Michigan’s industrial retail power rates ranked 25th among jurisdictions at $0.0858/kWh in 2025. The state’s industrial rates are lower than the national average, and are second lowest among six Midwest states.

The commission has no recommendations for legislation on the energy choice framework.

State commission chairman Dan Scripps was quoted last month in Public Utilities Fortnightly magazine saying that “there are advantages and disadvantages” to the 10% retail choice program. His office declined to comment further.

Another bill in the state Senate, S.B. 477, proposes adjustments to the 10% cap, some of which curtail retail markets and others expand them.

The office of sponsor Darrin Camilleri (D) said he was not available to discuss the prospects for passage for the bill.

The bill says that if a retail customer exceeds its annual allotment for a facility, or if utility sales decline in a subsequent year, that customer shall not be forced to purchase electricity from a utility and may purchase electricity from an alternative electric supplier for that facility.

If the public utility commission determines that less than 10% of an electric utility’s average weather-adjusted retail sales for the preceding calendar year came from alternative suppliers, that level becomes a cap for power sourced from alternative suppliers for that calendar year and five subsequent calendar years.

The bill also allows customers to use alternative suppliers for power needs at expansions of facilities. New facilities constructed or acquired after October 6, 2008, that are similar in nature and 50% owned by the same customer would also be eligible for retail supplies.

Consumers Energy said it opposes any change to the state’s retail open access policy since it leads to higher costs for customers than the regulated model.

“Our customers are seeing inflationary increases in their daily lives from groceries to gas prices, and this Senate bill is expensive, duplicative and complicated to operate,” said Katie Carey, director of media relations for Consumers.

“Any adjustments to policy changes should be done to ensure the benefits outweigh the increased costs for customers, and Senate Bill 477 doesn’t fit that bill.”

DTE Energy had no comment.