Michigan commercial electricity: the 10% cap

The cap is a quantity of load, not a count of customers

Michigan writes its limit as a share of sales. Section 10a(1)(a) of the Customer Choice and Electricity Reliability Act allows no more than 10 percent of a utility's average weather-adjusted retail sales for the preceding calendar year to take service from an alternative electric supplier at any time. That is a cap on energy, not on accounts, so one large plant can absorb most of a utility's remaining room. The market opened under the 2000 act of that name; the ceiling as it now reads came with 2008 PA 286 and was amended by 2016 PA 341. The base is the prior year's sales, so the cap moves when the utility's load does, not when a legislature acts. What gets allocated is energy: under 10a(1)(b) the Commission awards annual energy allotments by calendar year, per facility.

• Cap: 10 percent of average weather-adjusted retail sales for the preceding calendar year (MCL 460.10a(1)(a)).
• Allocation unit: annual energy allotments, calendar year by calendar year (MCL 460.10a(1)(b)).
• Overrun rule: a customer above its allotment is not forced back to the utility, but may keep buying from its supplier for that facility for the rest of the year.
• 2025 statewide: 2,172 MW of choice demand, 5,517 accounts, 20 licensed suppliers.

A full cap produces a queue, not a rejection

When a utility's allocation is fully subscribed, the Commission's instruction is that the customer is placed in that utility's queue. Section 10a(1)(h) requires each utility to file a rank-ordered queue with the Commission by 15 January every year, with the estimated electricity use of every customer waiting; the customer-specific content is exempt from disclosure, so what circulates is aggregated. Section 10a(1)(i) sets the clock: when room appears the prospective supplier is notified and has five business days to say whether the customer will take service, and silence forfeits the position. Section 10a(1)(g) is the customer's own lever — removal happens on the customer's written or electronic notice. A queue position is an asset that has to be maintained deliberately, and the deadline runs against the supplier, not the site.

• Rank-ordered queue filed with the Commission each 15 January, with estimated usage per waiting customer.
• Five business days for the supplier to accept when capacity opens; no answer loses the place.
• A customer leaves the queue only by its own notice.
• About 5,101 customers were waiting statewide in the 2025 report.

The rounding rule can hold a cap below ten percent for years

The clause most likely to surprise a buyer is 10a(1)(c). If the Commission finds that less than 10 percent of a utility's average weather-adjusted retail sales was served by suppliers in the preceding year, it must set the cap at that percentage rounded up to the nearest whole point and hold it for the current year and the five after. If the cap goes unadjusted for six consecutive years it returns to 10 percent in the year after the sixth. For a utility under 200,000 customers with no supplier-served load in four years, the adjustment runs for no more than two consecutive years. It is a ratchet with a long handle: a year below the ceiling becomes a lower ceiling, locked for up to six years. A buyer planning against the headline ten percent can reach a utility whose real allocation is a point or two lower and has been for years.

• A below-ceiling year becomes the new ceiling, rounded up to a whole percentage point.
• The adjustment binds the current year plus five more.
• Six consecutive unadjusted years returns the cap to 10 percent.
• Utilities under 200,000 customers: no more than two consecutive adjusted years.

Expansion rights attach to the meter, and to a 2008 date

Michigan draws the boundary of a customer at the meter. Section 10a(9)(a) defines a customer as the building or facilities served through a single existing electric billing meter, expressly not the company that owns them. So a multi-site operator queues each site separately, service at one address does not carry to the next, and a landlord's arrangement at one metered space says nothing about the suite beside it. The statute then protects growth narrowly. Under 10a(1)(d), a customer served continuously by a supplier since 1 April 2008 may buy for existing and expanded load at that facility, and for similar new facilities built or acquired after 6 October 2008 where it owns more than half. Under 10a(1)(e), a facility entirely supplier-served when the 2016 amendments took effect keeps the same right for contiguous sites. Both are grandfathered; a site on standard tariff at the time cannot enter either.

• One billing meter is one customer for the cap, the queue and the grandfather alike.
• Continuous supplier service since 1 April 2008 preserves expansion rights at that facility.
• New similar facilities after 6 October 2008 qualify only above 50 percent ownership.
• A site on standard tariff at the 2016 amendments cannot be converted.

Capacity is charged by territory, not by the supplier

Michigan separates capacity from energy into its own charge. Under MCL 460.6w(3) the Commission publishes a capacity charge for each territory with retail open access and reprices it by order rather than in step with the market. The notice posted with the choice material lists six territories and the order behind each: Consumers Energy under Case No. U-21585, DTE Electric under U-21534, Indiana Michigan Power under U-21461, Upper Peninsula Power under U-21555, Upper Michigan Energy Resources under U-21852 and Cloverland Electric Cooperative under U-20508. The amounts differ sharply — the highest territory is close to ten times the lowest — so two businesses on identical supply terms can carry very different non-commodity costs. The charge belongs to the delivery utility and the order, so renegotiating supply does not move it.

• A separate charge under MCL 460.6w(3), set per territory by Commission order.
• Six published orders: U-21585, U-21534, U-21461, U-21555, U-21852 and U-20508.
• The spread between lowest and highest territory is close to a factor of ten.
• A new supply agreement does not reprice it.

Six territories, and one of them is a cooperative

The Commission names the utilities whose business customers may shop: Consumers Energy, DTE Electric, Upper Peninsula Power, Upper Michigan Energy Resources and Cloverland Electric Cooperative, with Indiana Michigan Power publishing its own choice information. DTE serves the southeast around Detroit, Consumers most of the Lower Peninsula, Indiana Michigan Power the Benton Harbor and Niles corner, and the other two the Upper Peninsula. Cloverland is the exception worth knowing: a cooperative whose rates the Commission does not regulate, with a capacity charge under its own order. The Commission also points to retail-access terms from Presque Isle Electric and Gas Cooperative and Tri-County Electric Cooperative, so a co-op member is not automatically outside choice — the co-op's tariff decides. Municipal systems sit outside: state law leaves it to the municipal body whether to offer choice at all.

• The five named utilities plus Indiana Michigan Power.
• Cloverland is a cooperative with a capped programme and rates the Commission does not set.
• Presque Isle and Tri-County publish their own retail-access tariffs.
• Municipal utilities decide locally; assume bundled service until told otherwise.

The 2035 and 2040 standards are the provider's obligation

Michigan's 2023 clean energy package is usually cited loosely, and the act number matters if you read the text. The electric-supply standards are in Public Act 235 of 2023, with utility-scale siting in PA 233. PA 235 sets a clean energy standard of 80 percent for 2035 through 2039 and 100 percent from 2040, defined by emissions, so nuclear counts toward it while staying outside the renewable standard, which rises to 15 percent through 2029, 50 percent for 2030 to 2034 and 60 percent from 2035. The act also sets a 2,500 MW storage target, extends resource planning to 2045, requires clean energy plans by 2028 and supplier storage plans by 31 December 2029. None of it is a surcharge line: the costs arrive through approved rates, riders and contracts.

• Clean energy: 80 percent in 2035-2039, 100 percent from 2040.
• Renewables: 15 percent to 2029, 50 percent for 2030-2034, 60 percent from 2035.
• Statewide storage target of 2,500 MW; supplier plans due 31 December 2029.

Gas runs on a different statute and a different customer definition

Michigan's gas market is not a copy of the electric one, and the difference is not the cap. Gas Customer Choice is open to residential and business customers of Consumers Energy, DTE Gas, Michigan Gas Utilities and SEMCO Energy Gas, with more than 365,000 participants according to the Commission, under a framework created by 2002 PA 634. Two features separate it from electricity. The unit of choice is the end user rather than the billing meter, so a portfolio has to be assembled by ownership and management control rather than by service address. And volume changes the arrangement itself: below a threshold the supplier's commodity is collected on the utility bill, while above it the account moves to transportation, where the supplier delivers gas into the system, invoices separately, and carries a tolerance band and a twelve-month return notice that a sales-service customer never sees.

• Four gas territories, residential and business, under 2002 PA 634.
• A gas customer is an end user of gas, not the facilities behind a meter.
• Volume decides sales service versus transportation; the tariff sets the line.
• Transportation carries a tolerance band, a minimum term and a twelve-month return notice.

What to assemble before a Michigan request for proposals

Because the constraint is an allocation rather than a price, the order of work differs from a PJM state. The first question is not what a supplier would charge but whether the meter can take supplier service and, if not, where it stands in the queue. Establish the delivery utility from the account's own bill, confirm that territory runs a programme, and pull the current capacity charge order. Then collect twelve months of interval or billing data per meter rather than aggregated across sites. Ask the incumbent in writing whether the account has ever taken supplier service and whether it has been continuous since 1 April 2008 — that answer decides whether expansion is protected. Only then is there an offer worth comparing, with delivery and capacity held constant so supply is the only variable.

• Delivery utility and territory first, queue position second, offers third.
• Twelve months of data per meter, never aggregated across sites.
• Ask the utility in writing whether the account has held supplier service, and since when.

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