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Michigan’s Energy Problem Is Costing You Even More Than You Know

Two questions that may seem separate are actually related: why is your electricity bill going up?  And, why does Michigan keep losing people and employers to other states?

The answer has a lot to do with energy policy, and the choices Lansing has made in recent years are making power less affordable without making it more reliable. At the West Michigan Policy Forum, we’ve been digging into the data, and what we found is both eye-opening and, frankly, frustrating.

Michigan Pays More Than Its Neighbors

Let’s start with the facts. Michigan residential electricity rates are above the national average, and the highest among our Great Lakes peers. On top of that, energy rate increases have outpaced general inflation, meaning the problem isn’t standing still.

Part of this comes down to how Michigan’s utility market works. Our utilities operate under a regulated, vertically integrated model where nearly all of their costs are fixed. That would be manageable if Michigan’s population were growing. But it isn’t. As people leave the state, those same fixed costs get spread across fewer customers, and everyone’s bill goes up. According to ALEC’s Rich States, Poor States, Michigan has lost nearly 184,000 residents to domestic out-migration over the past decade. That’s not just a sad statistic; it’s also a driver of higher energy costs for everyone who stays.

What Businesses Are Actually Looking For

Here’s something that might surprise you: when companies are deciding where to start, expand or move their operations, they don’t look first for tax incentives. Site selectors — the professionals who advise businesses on where to locate — consistently rank utility availability and reliability as one of their top criteria, well above state incentive packages like our failed SOAR program that gave away billions of taxpayer dollars to corporations to come to Michigan.

Think about what that means for Michigan. As demand for electricity grows, driven by electric vehicles, industrial automation, and the explosion of data centers, the states that can offer affordable, reliable power will win the jobs and investment that come with it. The states that can’t will watch those opportunities go elsewhere. We’ve already seen too much of that.

Michigan Has Real Energy Advantages — But We’re Putting Them at Risk

Here’s the part of this story that doesn’t get told enough: Michigan actually has tremendous energy assets.

Michigan ranks first in natural gas storage capacity with over 50 natural gas storage fields, allowing the state to meet demand year-round with more stable supply and pricing with more than 115,000 miles of underground natural gas pipeline and storage capacity that can hold up to two months of winter supply. Most states don’t have anything close to that. When a polar vortex hits and energy demand spikes, Michigan’s infrastructure is what keeps the lights on and the heat running. Natural gas is our number one source of electricity generation, and for good reason: it’s reliable.

So what’s the problem? Governor Whitmer’s 2023 energy legislation passed in Lansing is mandating a shift away from these affordable sources on a government-dictated timeline, regardless of whether the economics make sense for Michigan families.

What the 2023 Mandates Actually Mean for Your Bill

Prior to 2023, Michigan’s energy reforms strengthened reliability, created a smart framework for ensuring we always have enough generation capacity, and encouraged investment in infrastructure. That was sound, practical policymaking.

The 2023 legislation, however, went a different direction. It layered costly renewable portfolio mandates on top of that framework, requiring utilities to source a growing share of power from more expensive sources on a government-set timeline – instead of a sound planning process. If those mandates stay in place, Michigan residential electricity bills could nearly double by 2050 amounting to an extra $228 per month.

“Nearly double”

That’s not a talking point , that’s the math. And it lands hardest on the families and small businesses who are already stretching their budgets.

What We’re Calling For

The West Michigan Policy Forum believes Michigan’s energy future should be built on what works, which is why we’ve established it as a key policy priority. That means:

  • Repealing the 2023 energy mandates that are set to drive up costs without a commensurate improvement in reliability.
  • Protecting and investing in Michigan’s natural gas infrastructure our pipelines, our storage capacity, and our generation fleet.
  • Returning to the reliability-focused planning framework, which allows for investment and innovation without forcing expensive outcomes through government mandates.
  • Letting the facts and sound integrated resource planning determine Michigan’s energy mix, focusing on affordability and reliability, not politics.

Michigan has the infrastructure, the resources, and the know-how to be an energy leader in the Midwest. But that potential only gets realized if policymakers are willing to prioritize affordability and reliability over ideology.

The bottom line: energy policy is economic policy. It affects what families pay every month, whether businesses choose to invest here, and whether Michigan can compete for the jobs of the future. We’re committed to fighting for the energy future that Michigan families deserve.