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Michigan Legislative Update

Week of August 6, 2015

by Judy Augenstein

This week Moody's Investor Services announced Michigan's credit rating for 2015.  for the first time since 2004, Michigan's credit rating has improved to the level of Aa1.  States that receive an Aa rating typically are high quality and subject to low levels of risk.  Aa3 ratings have higher risk levels than states with Aa1 ratings.  Republicans credit the rating change due to the economic growth, sound budget practices and the reduction of overall state debt.  Republicans also contend that as Michigan continues its comeback path, factor such as an improved credit rating will help play a large role in determining the future of the state.

Both the House and the Senate have introduced individual plans to regulate energy in Michigan.  Both plans will affect citizens differently and are expected to be voted on during the fall session.

HB's 4298 through 4302 are sponsored by Rep. Aric Nesbitt, R-Lawton, Chair, House Energy Police Committee.  This bill package would restore Michigan to a fully regulated electric market by eliminating customer choice provisions and prohibiting alternative electric suppliers from entering into new contracts with retail customers.  Other changes in this package would include revising the way that refunds are given to customers that overpay for their utilities, reducing the time period that the Public Service Commission can reach a final decision on a rate change; and requiring electric utilities to provide an integrated resource plan to be approved every five years by the PSC.

SB's 437 and 438 are sponsored by Senator Mike Nofs, R-Battle Creek, Chair, Senate Energy & Technology Committee and Senator John Pros, R-St. Joseph.  The two bills would keep the choice that 10% of energy to be available to consumers from sources other than Consumers or DTE.  This bill would require that providers must prove they have enough supply to meet demand, as well as show they have room to grow.  These bills also include the phase-out of energy reduction waste credits by January 1, 2019, as well as reducing the decision time for the PSC and requiring an integrated resource plan to be approved by the PSC every five years.

House Bills 4298 through 4302 were introduced in March and are currently in the House Committee on Energy Policy.  Senate Bills 437 and 438 were introduced in July and are in the Senate Committee on Energy and Technology.  Both of these packages are expected to be voted on during the fall session.

Michigan's roads and infrastructure are in desperate need of repair and a long term funding solution is still being discussed by the House, Senate and the Executive Office.  Both the House and the Senate have passed separate versions of road repair and maintenance funding.  The Senate's plan relies heavily on using increased gas taxes and General Fund dollars to fund road repair, while lowering the Michigan income tax rate to help offset the burden on tax payers.  The House plan takes a different route and redistributes existing tax dollars to fund roads instead of increasing taxes. 

In July, the House convened to analyze the Senate road package and to determine the best course of action going forward.  While some progress was made in these meetings, there is still work that needs to be done to finalize a solution for fixing the roads in the state.  Coming up with a road funding solution that takes the best of the House and Senate plans is a top priority of the Legislature. 

This week I attended a fundraiser event for Rep. Tom Barrett, R-Grand Ledge, member House Commerce Committee.  Speaker of the House Kevin Cotter, R-Mt. Pleasant was the special guest and I had the opportunity to "break bread" with him and discuss the competition the Amish create for wood products companies, such as Maeder Brothers in his district.  I shared that Rep. Barrett is working on our behalf to get the Commerce Committee to tour Johnson Lumber in Charlotte.  The Speaker agreed to join the committee tour if time permits.

Both the House and Senate will be back in session on August 18. 

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