LANSING, Mich., Nov. 22 /PRNewswire/ -- Two former Michigan Public Service Commission (PSC) chairmen -- Dan Demlow and Steven Fetter -- have joined leaders of Citizens for Long-term Energy Affordability and Reliability (CLEAR) to urge legislators to address structural problems with the current electric choice system.

"As it stands now, the system will never be able to provide cost savings to residential and smaller business customers through competition," said Fetter, who chaired the PSC from 1991-1993 and is now president of Regulation Unfettered.

The former PSC chairmen highlighted several shortcomings with the existing system, including unequal operating standards for public utilities and out-of- state electric companies, little electric choice for businesses and residents due to a semi-regulated industry, and the lack of legally-mandated backup reserve power for all electric suppliers.

Demlow, PSC chairman from 1975-1981 and now a partner at Honigman Miller Schwartz and Cohn, cited the history of Michigan's rate system as the root of problems with the electric choice program.

"The problems with today's current rate structure -- small businesses paying higher rates to subsidize the rates for residential customers -- is the result of a policy we set in the 1970s. It is 30-year-old policy that has outlived its usefulness. As a result, we have government-created competition instead of economic created competition. We need to fix those rate policies now to get customers back to their true cost of service and allow all energy suppliers to equally compete for all customers."

While they commended the PSC for attempting to address some of these concerns through utility rate cases, Demlow and Fetter stressed that the authority to fully address the problems must come from the Legislature, saying the Fair Power Legislation (SB 1331- 1336) is an important step in the right direction.

"There can be legitimate disagreements on what the solutions are, but we have a failed regulatory system," said Demlow.

CLEAR co-chairs Marshall Campbell and Michael Sarafa, along with CLEAR member Kathy Walgren, supported these comments.

"My members lost a third of their profits last year because they had to replace the food that spoiled when the power was out for three days during last year's blackout," said Sarafa, president of Associated Food Dealers of Michigan. "A reliable system is just as important as affordable costs, and we need legislation to require all energy suppliers provide the same amount of reserve power to back up, and ensure the reliability of, Michigan's electric system."

"There isn't enough financial assistance right now to help low- income families and senior citizens on strict budgets pay for their increased electric bills, let alone additional help as rates rise," said Walgren, executive director of The Heat And Warmth Fund. "Legislation can establish a statewide, comprehensive fund to provide more help to our neighbors -- an important first step in providing vital relief."

"The fact remains that residents and most small businesses have not benefited from electric choice and now face an electric system with declining reliability and higher electric rates," said Campbell, president and chairman of Citizens First Bancorp. "Ultimately, this is not about protecting utilities or limiting competition, this is about the economic health of Michigan."

Michigan residents echoed this sentiment in a recent public opinion survey conducted this fall by Market Strategies:

* More than three-fourths -- 84 percent -- state that they have not personally benefited from the competition between out-of-state electric companies and the state's local utilities.

* Nearly two-thirds -- 61 percent -- agree that Michigan's current electric deregulation law does not protect the average Michigan family from skyrocketing electric rates.

* Nearly two-thirds -- 61 percent -- agree that current electric deregulation laws are unfair to the average resident and need to be fixed.

CLEAR launched a statewide campaign in February 2004, seeking support for amendments to PA 141 that will keep electric rates affordable and the electric system reliable for Michigan's 3.7 million residential customers and more than 300,000 business customers. Nearly 23,000 individual Michigan citizens and more than 300 businesses and organizations are CLEAR members. Visit http:// www.clearMichigan.org for more information about CLEAR. SOURCE Citizens for Long-term Energy Affordability and Reliability