AG wants 5¢ off energy bills

Every month, customers of Consumers Energy pay a tad more on their utility bill to subsidize renewable energy in Michigan, and it's an even bet most don't even know it.

Since January, when a state-imposed cap on electric rates expired, Consumers has collected a nickel per month for the Michigan Public Service Commission from every electric meter spinning in the utility's distribution grid.

It's only a measly nickel, and for what some believe is a noble cause. But Michigan Attorney General Mike Cox wants to yank the plug.

It's not that Cox doesn't like "green energy" from wind-powered generators and the like. It's more a principle-of-the-thing kind of thing, according to Nate Bailey, a spokesman for Cox's office.

"We went in with a couple of arguments," Bailey said. "First of all, a rate increase like this should have had legislative approval. The other argument is ! individual consumers should have a choice whether to fund these projects or not."

Cox has sued the Michigan Public Service Commission to rescind the rate increase. The Michigan Court of Appeals has ruled in favor of the attorney general. The case has risen to the Michigan Supreme Court on appeal from the Public Service Commission.

It's unclear when the court might take up the matter, commission spokeswoman Judy Palnau said.

Consumers already has a voluntary Green Energy program, where customers can opt to pay a few dollars more a month to help subsidize energy produced from wind turbines or landfill gas-fueled electric generation.

Consumers Energy spokes-man Dan Bishop said enrollment in that program recently topped 3,000 out of a total electric customer base numbering more than 1.8 million.

Bishop said the extra 5 cents adds up to about $1 million a year. Consumers Energy uses the money to buy power from renewable energy producers, Bishop said.

For its part, Consumers Energy is sitting on the sidelines as Cox and the commission slug it out, Bishop said.

"Obviously the commission believes it does have the authority under Michigan law to implement the rate," Palnau said.

Palnau said the Customer Choice and Electric Reliability Act, passed by the Legislature in 2000, provides for establishing renewable energy programs in Michigan.

"The commission believes that gives them the authority to get a program rolling, and obviously it would need to be funded," Palnau said.

The Mackinac Center for Public Policy, a free-market think tank based in Midland also has weighed in, filing an amicus brief.

Patrick Wright, a senior legal analyst at the Mackinac Center, argues the 5 cent fight is an example of state agencies overstepping limits to act as an elected legislative body. Wright said participation in Consumers Energy's voluntary program is "minuscule" so commissioners decided to impose the added "tax" on all customers in the belief they are acting for the benefit of society.

"They are making policy decisions ! but they are not our elected representatives," Wright said.

In addition, by subsidizing renewable energy projects commissioners are undermining the intent of the act, which was to introduce more competition to the electric generation market.

Although a nickel a month may not seem worthy of a court battle, the real issue is power, Bailey said.

"If it's a nickel this time, it could be a quarter next time or $10 next time," Bailey said. "This is not how they should be going about hiking utility rates."