Electric Competition for Michigan NOW!

www.competition4mi.com

April 14, 2011

Dear Michigan Lawmaker,

As you return to Lansing with a focus on finding solutions to balance Michigan’s FY2012 budget and
tax structure, we wanted to provide you with an update on the status of the electricity market in
Michigan. While the topic of electric competition, and the lack of it in Michigan, may not be headline
grabbing at the moment, the issue is no less urgent for Michigan’s businesses and consumers.

More Electric Rate Increases: On March 31, 2011, DTE Energy filed two rate increases
with the Michigan Public Service Commission (MPSC) for $106 million and $62 million
respectively. These two rate increase requests are in addition to a $443 million general rate increase
request that is pending before the MPSC. If granted by the MPSC, this would amount to a total of
$611 million in rate hikes requested in the last six months alone. Of this, DTE has requested an
interim rate increase of $230 million to go into effect on April 28th.

Since the enactment of PA 286 in 2008, DTE and Consumers Energy combined have implemented or
have requested over a billion dollars of electric rate increases for Michigan customers. This
translates to an average increase of 21-22 percent for DTE and an over 25 percent
increase for Consumers Energy. In no other sector of Michigan’s economy have prices gone up
so stratospherically – and in just 30 months.

Michigan now viscerally feels the effects caused when critical sectors of our economy are insulated
from competitive pressure.

Electric Competition for Michigan NOW! is a coalition of customers, suppliers, and trade associations
whose mission is to promote the right for Michigan consumers to have real energy choices when
selecting their electricity provider. Legislation will be introduced to increase the current 10 percent
cap on electric competition in Michigan. The Coalition urges members of the Michigan
Legislature to vote in favor of increasing the 10 percent cap.

This memo provides you with a short sampling of evidence showing both how damaging the current
monopoly system in Michigan has been to businesses and consumers and the many merits of a
competitive electric market.

Enclosed please find:

 Insight Magazine – 3rd Annual Michigan Manufacturing Survey: MMA, March/April 2011
o According to the Michigan Manufacturers Association most recent edition of Insight
magazine (March/April 2011), in a survey gauging Michigan manufacturers’ optimism,
energy costs are mentioned by businesses as the third largest (73%) cost
impact on businesses’ operational performance for 2011. This is behind
healthcare (88%) and labor costs (77%) and ahead of tax, regulatory and capital
costs. The article makes clear that, in the opinion of manufacturing leaders across the
state, manufacturers are clearly nervous about continued erosion of business and lack of

Electric Competition for Michigan NOW!

info@competition4mi.com
517.515.1583
Electric Competition for Michigan NOW!
www.competition4mi.com

employment growth. Fully 77 percent of Michigan manufacturers see energy costs

impacting their companies’ performance in 2011 – and not in a good way. Only 53
percent of businesses polled reported any expansion plans.

 Crain’s Detroit Business – “Michigan needs regional electricity grid” - March 28, 2011
o “Michigan has some of the highest energy prices in the Midwest – it’s the state ranked highest or
second highest 95 percent of the time in the past 22 months.”

 Platts Electric Power Daily – “Michigan’s 2008 energy law may get some changes” – April 4, 2011
o “Critics of Michigan’s 2008 energy law say new Governor Rick Snyder may be warming to the
idea of changing some of its key provisions, including a hard 10% cap on electric choice.

 Detroit News – “More Electric Competition Needed” - March 29, 2011

o “The pent-up demand for competition and choice in the electricity market is staggering.”

 Philadelphia Inquirer – “Peco: 16% of customers have switched suppliers” – March 29, 2011
o “Since electric competition took off on Jan. 1 …. More than 260,000 customers have switched
suppliers, according to the utility.”

 Jackson Citizen Patriot- “Consumers Energy finishes last in J.D. Power ….” Feb. 16, 2011
o “Consumers Energy finished last among its peers … The Jackson-based utility was compared to
11 other large Midwest utilities surveyed…”

 JD Powers and Assocs. – 2011 Electric Utilities Customer Satisfaction Survey – Feb. 16, 2011
o Press Release
o 2011 Chart – Customer Satisfaction Study (monopoly in MI)
o 2008 Chart - Customer Satisfaction Study (peak of competition in MI

Competition works: Competition works in the electricity market just as any other marketplace.
History proves it and it’s proven on a daily basis nationally and globally. Competition drives
innovation, efficiency, and improved customer service. We know that you understand that the
savings from competition can be used to avoid layoffs, hire more workers, or increase worker benefits.

As a proud industrial state, no one is exempt from competition; even our public elementary schools
compete. No one, that is, except Consumers Energy and DTE.

We urge you to consider the facts and vote to increase the cap on electric competition in Michigan.

Best Regards,

Electric Competition for Michigan NOW!

www.competition4mi.com

Electric Competition for Michigan NOW!

info@competition4mi.com
517.515.1583