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E-M:/ attorney general announces electric deregulation plan

Enviro-Mich message from davemec@sojourn.com (Dave Dempsey)

Attorney General Frank Kelley today unveiled an electric utility
deregulation proposal endorsed in concept by some of Michigan's largest
businesses, the Small Business Association of Michigan, municipal electric
services, the AARP, the Michigan Consumer Federation, and MEC.

Electric utility deregulation is an important issue because of the sheer
volume of sulfur dioxide, carbon monoxide and dioxide, nitrogen oxide,
particulates, mercury and other pollutants spewed into Michigan's air and
water by its coal-burning power plants.  Deregulation can create pressures
to increase or substantially decrease those emissions -- and in doing so,
contribute to attaining new Clean Air Act standards endorsed by President
Clinton last week.

MEC's support for the proposal is based in part on the equal opportunity
for access to electric service through the market that the draft
legislation provides to individuals and commercial customers.  The only
other major proposal, drafted by Michigan's biggest utilities and largely
endorsed by the Public Service Commission, favors a handful of new and
existing large industrial customers in obtaining access to competitive
service first.

Represented at the press conference by its President Lana Pollack, MEC also
endorsed the concept of the Kelley proposal because:

* It requires all electric service providers to disclose to potential
customers information on price, price variability, sources of electric
power, and environmental impacts in solicitations and periodically
thereafter.  This "right to know" provision has the potential to enable
customers to choose cleaner sources of electricity.  Under the proposal,
disclosure would occur using a standard format prescribed by the state.

* It contains a provision requiring electric service providers to offer
renewable energy options.

Neither of the above features is included in the PSC plan.  MEC will work
with members of the Coalition to seek funding in the proposal for
demand-side management, or energy efficiency services which have a major
potential to reduce air and water pollution and save customers money each
month on their bills.

In unveiling the proposal, Attorney General Kelley noted it does not
provide $7 billion in "stranded costs" sought by Detroit Edison and
Consumers Energy.  He said it encourages aggregation, which allows small
customers to be treated as a group so they can have leverage necessary to
obtain lower prices;  contains "universal service" rules requiring the
local utility to connect all customers and to serve low-income consumers;
and provides strict consumer protection.

"Under this plan, the utilities will be unable to exercise market
dominance," Kelley said.  "A fully competitive market will be created."

Dave Dempsey
Michigan Environmental Council
119 Pere Marquette, Suite 2A
Lansing, MI  48912
(517) 487-9539
(517) 487-9541 (fax)

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