Michigan and Electricity Choice Jennifer Steiner-Burner Energy Specialist Script for Michigan Energy Symposium entitled Michigans

Electricity Market Time for Gardening. Date: October 15, 2012 9:30 1:00; Where: Mackinaw Room, Lansing, MI Audience: Legislators, House & Senate Policy Directors, Energy Analysts, Fiscal Directors, Governors Administration, MPSC Commissioners, Press, Public Good Afternoon, Im Jennifer Steiner-Burner, an Energy Specialist working for Marathon Petroleum Corporation (MPC), headquartered in Findlay, Ohio. Marathon Petroleum owns facilities in states throughout the Midwest and in the Gulf Coast; in regulated and de-regulated electricity states. My department manages electricity expenses for Marathon Petroleums 6 refineries, over 80 pipe lines stations, 83 terminals and approximately 1,460 Speedway convenience stores. Marathon Petroleum has many assets located in Michigan, including the last refinery in the state, Marathon Petroleums Detroit Refinery, 300 Speedway convenience stores, along with a number of terminals and pipe lines. Im here today to discuss the importance of electricity competition and how it will promote economic growth and jobs in Michigan. Historically, electricity prices have been high in Michigan, which is why Michigan chose to de-regulate the electricity industry back in 2000. This gave industry and businesses a chance to take on more price risk to better manage and potentially lower their electricity costs. This opportunity made Michigan an attractive state for industry to expand or new industry to locate. However, in 2008, PA 286 was passed and an arbitrary 10% cap was placed on electricity choice, due to the utilities requesting a guarantee of customers so that they could build new generation. Here we are now, in 4th quarter, 2012 4 years later. No new generation has been built in Michigan. The 10% cap is full. Marathon Petroleum is in the midst of finalizing its $2.2B refinery expansion project at our Detroit plant which brought 1,800 construction jobs and 60 new full time employees at a time when Michigan needed just this type of economic development. While the refinery was fortunate enough to get into the electricity choice program, under the 10% cap back in 2010, the new expanded load cannot access the electricity market rates due to the fact that the 10% cap is full. This new load will pay over 30% more for electricity to the regulated utility company, Detroit Edison, compared to our electricity choice supply. This equates to millions of dollars annually. While I dont believe there is one answer for all states - electricity de-regulation or electricity regulation, it is quite obvious that in Michigan the regulatory model is not working. Electricity rates under regulation are skyrocketing and not mimicking competitive rates as they should. So the only viable option is to continue to open the electricity market beyond the 10% cap for those companies that want and need to manage their electricity costs so they can remain competitive in their marketplace. The gas and shale boom that is occurring right next door to Michigan is an energy game changer. Michigan needs to be an active participant in this energy boom that could fuel the next industrial expansion in the Midwest. Dont hold Michigan industry and businesses back through captive, high cost regulation. Move Michigan forward with more electricity competition.