Michigan Electricity Rates
Electricity deregulation in Michigan began in 1998 with an electricity restructuring law that would gradually implement deregulation in the state. Starting in 1998, the Michigan Public Services Commission (MPSC) slowly allowed large businesses in certain areas to choose their own retail electricity provider. By 2002, electric supply choice was open to a limited number of residential and small business customers.
Prior to deregulation, electric customers were forced to purchase both the supply portion and the distribution and transmission portion of their electric service from their local utility. The electric choice brought about through deregulation allows customers to shop around for the supply portion (the actual electricity), much like they would for a cell phone or cable provider. These companies that customers are able to choose among are called retail electricity providers, often referred to as alternative electric suppliers (AES) in the state of Michigan.
Electricity Providers in Michigan
When customers choose a retail electricity provider for their electricity supply, the distribution and transmission portion of their services is still carried out and charged to the customer by the utility. How the electricity is delivered to your home or business does not change, no matter what company you purchase your supply from, since it is the responsibility of the local utility to provide reliable distribution and transmission services to all customers.
Public Utilities in Michigan
All of Michigan’s deregulated utilities are regulated by the MPSC and include:
- Consumers Energy
- Detroit Edison
- Indiana Michigan Power
- Upper Peninsula Power Company
Electric Choice Participation
Unlike most other deregulated states, Michigan’s utilities have caps on how many residents and small businesses are allowed to participate in electric choice. Currently, the maximum amount of customers eligible to switch under each utility is the equivalent of electric usage of 10% of the electric utility’s average weather-adjusted retail sales from the previous calendar year.
If the utility has reached its 10% cap, customers wanting to switch are placed on a queue, or waiting list. To find out if your utility has reached its cap this year, click on your utility below:
- Consumers Energy Cap
- Detroit Edison Cap
- Indiana Michigan Power Cap
- Upper Peninsula Power Company Cap
It is common for states to slowly integrate deregulation. It is not known when the state will lift these caps, but we expect that the caps will be lifted sometime in the future and deregulation will mirror that of other fully deregulated states and regions.
How to Switch
Under each utility, there are several retail electricity providers to choose from. To help you navigate the comparison process, ElectricityRates.com provides you with a FREE Compare & Switch tool that minimizes the research that is required to choose the best provider and plan for your specific needs.
On the right side of this page, enter your zip code and and click “Search.” After you’ve selected your utility, you’ll be presented with a list of credible suppliers available in your area. Here, you can compare rates, contract lengths, and other important information such as how the electricity is sourced (e.g., renewable versus coal or natural gas).
You will need to have a recent electric bill on hand to compare plans. Find your “Price-to-Compare” on your bill and compare this number with the rates that the providers have to offer. The Price-to-Compare (P2C) is what you are currently paying for your electric supply and is expressed in cents per kilowatt hour (kWh). This rate may appear something like:
12.51 cents/kWh –OR- $0.1252/kWh
You will initially want to find a plan that has a lower rate than what you are currently paying. Of course, rate pricing isn’t everything. Seeing a lower rate doesn’t always mean that you’ll save. Learn more about comparing rates and important factors here.
Once you’ve selected a provider and plan for your specific needs, switching is easy. You may be able to switch online through our FREE Compare & Switch tool. Be sure to have your account information on hand. You will not be required to contact your local utility, as the provider will do all of the switching for you. If your utility has reached its 10% cap, you may be placed on a waiting list.