Michigan could avoid up to $8 billion in utility-financed infrastructure investments by expanding its Electric Customer Choice Program, according to a new report published by the Mackinac Center for Public Policy in October 2026. The state's two largest utilities, DTE and Consumers Energy, plan to add nearly 30 gigawatts of new generation, storage, wind, solar, and natural gas over the next two decades at an estimated cost of $39 billion. That investment could triple electricity rates for everyone, the report warns, but expanding an existing program that allows customers to buy power from private suppliers could shift billions of those costs away from ratepayers.
Michigan's electric choice program currently serves 5,518 customers representing 2,172 megawatts of demand, about 10% of the market, the report states. Another 5,101 customers sit on waiting lists. Raising the cap to 20% participation would lower utilities' infrastructure needs by $3.5 to $4 billion, while a 30% cap would cut $7 to $8 billion, according to the center's analysis based on historical utility generation costs. In 2024, participating customers saved more than $185 million in generation costs compared to what they would have paid monopoly utilities, with commercial customers saving 30% and industrial customers 12% on average. Michigan residential rates averaged 19.30 cents per kilowatt hour in 2024, compared to 16.54 cents in three nearby states with open electric choice programs—costing the average Michigan household an extra $205 annually.
The Mackinac Center finds that choice customers continue paying utilities for transmission, distribution, and other regulated services. "The only difference is how participating customers procure the generation portion of their electric service," the report explains. "Instead of relying on utility-owned generation that ratepayers pay for, choice customers get their supply from alternative providers who privately finance their own generation." The report also notes that since Michigan capped the program at 10% in 2008, electric rates have risen 59% compared to only about one-third for three nearby states that maintained full competitive markets. Michigan ranked fourth worst nationally for blackouts and total outage duration from 2008 to 2017, and both DTE and Consumers Energy fell into the worst performance quartile for reliability in a study published by the state's Public Service Commission.
The report argues that utilities may struggle to build new generation fast enough to meet forecasted demand growth of 2% to 3% annually. Consumers Energy plans to build 1,300 megawatts of new wind and solar per year, two-and-a-half times the recent five-year statewide construction rate, while DTE aims for 1,600 megawatts annually, about three times that rate. New natural gas plants take five to seven years to build, meaning plants approved today wouldn't be available until 2031 to 2033. Strong local opposition often denies or delays renewable projects, and the state commission has approved only one project since 2024. When utilities finance generation under Michigan's current model, customers ultimately bear much of the long-term investment risk through cost recovery approved by regulators, the report notes. Under customer-directed procurement through the choice program, a larger share of that risk shifts to private investors and participating customers instead.
The Mackinac Center recommends that Michigan lawmakers increase the statutory participation cap from 10% to 30%, require utilities to account for expected alternative supplier use when forecasting future generation needs, and allow renewable resources used by alternative suppliers to count toward the state's net-zero mandates. The report urges action before the current investment cycle is substantially committed, warning that once major generation projects are financed and placed into service, opportunities to finance them differently become increasingly limited. Every megawatt financed by participating choice customers is one less megawatt utilities need to finance and recover through increased electric rates paid by households, small businesses, schools, and other customers who remain on bundled utility service.