DTE must go back to the drawing board and rewrite its 15-year operating plan in ways that could lead to the utility accelerating efforts to burn less coal, use more wind power and communicate more openly with community groups about pollution, according to a ruling Thursday by state regulators.
The Michigan Public Service Commission ordered DTE to extensively revise its long-range plan, which will decide how millions of Michiganders get their power. And it will shape how much they pay for it, for years to come, although the plan does not specifically address customer rates.
In the short term, regulators at the MPSC recommended that DTE do more to help customers cut energy waste by upgrading to energy-saving refrigerators and other appliances, improving home insulation, and installing new thermostats as well as other energy-saving equipment. When customers reduce their need for electricity, utilities have shown they can avoid building new generating plants that add to air pollution.
To make that happen, the MPSC’s order called for DTE to reach annual energy saving goals of 1.75% in 2020 and 2% in 2021, the same level it approved last year for Jackson-based Consumers Energy. DTE had proposed goals of 1.65% in 2020 and 1.75% in 2021.
Still undecided, though, and postponed until DTE assembles more data, are key decisions about how much of the company’s generating power can continue to come from coal and how much will come from renewable resources such as wind and solar power. DTE already had gained approval and begun construction on a $1-billion natural gas plant in St. Clair County, which the company said was needed as it shuts down more and more coal-fired plants.
In a 3-0 vote, the MPSC board gave DTE until March 21 to submit a revised IRP – or Integrated Resource Plan – covering the giant utility’s plans for providing electricity through 2035. The commission set a date of April 1 for DTE to update its renewable energy plan, a separate batch of engineering and financial projections but clearly related to the 15-year plan.
After the agency released its detailed 99-page order on DTE’s long-term plan, the utility released the following statement:
“DTE’s Integrated Resource Plan (IRP) reflects our long-term goals and plans to be a leader in providing cleaner energy to our customers. The Commission’s action today is an important step in this iterative process and we are evaluating the recommendations in preparation for filing our response.
“Since 2009, DTE has been the largest investor in renewables in Michigan, driving $3 billion in solar and wind energy infrastructure and investments. Over the next decade, we will triple our renewable energy assets, generating enough energy from wind and solar to power more than 1.3 million homes with clean energy.
“As one of the first U.S. energy companies to announce a net zero carbon emissions goal, we are proud of our commitment to cut our carbon emissions 50% by 2030 and 80% by 2040. Our plan of action also enables us to continue to provide our customers with significant energy efficiency savings.”
The state commissioners, in their written order, said DTE’s plan was too vague. They criticized DTE for offering “four pathways” – a set of four alternatives from which the utility had said it would choose in the period of 2025-35, depending on how technology and energy costs evolve.
An administrative law judge who reviewed DTE’s plan in detail last year had advised the MPSC commissioners before their vote that offering “four pathways” did not comply with state law. Also critical of that approach was Michigan Attorney General Dana Nessel, who had advised the MPSC that utilities must choose one path and defend that choice in their long-range plans.
DTE’s plan also failed to obtain competitive bids for new “electric generation resources,” including wind and solar projects that could be owned by third parties, including so-called “community solar” – the term used when communities or nonprofit groups band together to construct their own solar-powered lights and other infrastructure, such as the solar streetlights paid for by the nonprofit Soulardarity group in Highland Park.
The MPSC’s board members said they weren’t persuaded by DTE’s argument that it should be allowed to run its coal-fired Belle River power plant until at least 2029. The utility’s plan failed to analyze the cost of upgrading environmental controls at the plant 15 miles south of Port Huron, the commission’s order said. Regulators plan to review the utility’s revised cost analysis in future hearings, they said.
While Thursday’s decision was a temporary setback for Michigan’s largest utility, it pleased some leaders of environmental groups that filed objections to the plan; and it thrilled social activists who’ve taken on DTE, like those with a tiny nonprofit in Highland Park called Soulardarity. Its leaders had said the existing plan was too profit-centered and not enough helpful to low-income communities, especially those of color.
The state’s decision comes at a time of epic change for utilities nationwide. For well over a century, they’ve burned coal. Half a century ago, they added nuclear energy. Now, suddenly, there are widespread calls to undo much of that and to switch on renewable sources of energy that have little or no environmental impact. And there is a need for unprecedented investment to make all of that happen.
While coal increasingly goes the way of buggy whips, utilities must decide how to deal with rugged individualists seeking to generate their own power with rooftop windmills and solar cells, who demand to send some of their “juice” back into the grid and be paid for it. Power companies also see cheap natural gas flooding the energy marketplace, tempting their sharp-penciled engineers to push wind, solar and biofuels into a corner.
Jackson-based Consumers Energy was the first utility in Michigan required to submit an Integrated Resource Plan, a complex road map that outlines how a company will meet the electric needs of its customers for the next five, 10 and 15 years.
How things turn out for DTE as well as for the state’s other utilities in this painstaking process is vital to the future of Michigan and Michiganders, said Janice Beecher, a political science professor at Michigan State University.
“It’s so important to get this right because these services are essential to everyone, rich and poor, not just for economics but also for the environment, for public health and safety. Nobody has a crystal ball, so this plan needs a tremendous amount of analysis and planning,” said Beecher, who heads MSU’s Institute for Public Utilities at Michigan State University, a nationally known think tank and training site for utility regulators.