A significant number of customers who have entered into an electric retail open access (ROA) enrollment process sponsored by Consumers Energy Co. are holding back on taking the next step for open access service, according to a recent investigation done by staff at the Michigan Public Service Commission (PSC). Although PSC staff did not find a direct correlation between the low participation rates and problems with Consumers’ enrollment process, it voiced concerns over whether the company will be able to handle a much larger anticipated volume of customers once full electric open access kicks in at the start of next year in Michigan.

PSC staff conducted its investigation from January through April 2001. The purpose of the investigation was to review the procedures, policies and methods utilized by Consumers to determine if, in staff’s opinion, Consumers was effectively and efficiently processing enrollments. Also, staff attempted to discern whether the company was favoring specific alternative electric suppliers, customers or customer groups.

Among other things, PSC staff found that a large majority of customers who have entered Consumers’ enrollment process so far are not proceeding with open access service. About 90% of the customers, representing two-thirds of the power consumed by the group, remain stalled in the process. Reasons for the low participation rates do not appear to be as a result of problems with the enrollment process itself. Instead, they result from serious impediments currently present in the markets for transmission and generation services and in uncertainty about upcoming changes in Consumers’ ROA tariff.

According to the report, almost no customers smaller than 1,000 kW (1 MW) are active in Consumers’ program because firm network transmission service has not been available to serve them during the summer. ROA service did not grow beyond the level of 30 customers from January through March 2001 because adequate transmission and generation capacity was not available at affordable prices. Also, generally speaking, Consumers’ full-service rates for industrial and commercial customers are low enough that there have been limited opportunities for alternative electric suppliers to beat Consumers’ prices and earn an adequate profit.

PSC staff said that it appears that electric customer choice in Michigan, especially in Consumers’ territory, is developing very slowly while alternative power suppliers and customers await the results of pending state and federal regulatory decisions and changes in transmission and generation markets. As the time draws nearer to the Jan. 1, 2002 onset of full open access in Michigan, customers may be growing less and less interested in delving into ROA service during the prior phase-in period.

The report went on to note that Consumers has recently modified its management information systems that track progress in the enrollment process. This modification has made it easier to identify when delays result from activities that are Consumers’ responsibility, as opposed to delays resulting from alternative electric suppliers or customer decisions. But even with the changes that have been implemented in recent months, there still appear to be some gaps that prevent complete tracking. PSC staff is concerned about whether Consumers’ enrollment procedures and systems will be capable of handling much larger numbers of customers in the future, when full open access becomes available to all of the company’s customers at the start of next year.

A full copy of the report can be downloaded from the PSC’s web site at https://cis.state.mi.us/mpsc/.

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