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DTE Energy submits revised energy plan

DTE Energy Co. in Detroit has filed a revised energy plan that has accepted all recommendations issued Feb. 20 by the Michigan Public Service Commission to increase renewable energy production, create more solar power resources, and boost energy waste reduction goals.

“One of the key elements of our plan is our commitment to increase our annual energy savings goals to 1.75 percent in 2020 and 2 percent in 2021,” DTE said in a statement. “Expanding these energy efficiency goals will help save our customers money and protect the environment. Our plan continues to make significant investments in our renewable energy programs while continuing to dramatically reduce our greenhouse gas emissions.”

DTE’s waste-reduction goals are now similar to the IRP approved for Jackson-based Consumers Energy Co. last year. The statutory minimum is 1 percent and DTE proposed 1.65 percent in 2020 and 1.75 percent in 2021.

On Feb. 20, the MPSC rejected DTE’s plan as submitted and recommended significant changes that addressed a lack of competitive bidding for such renewable energy projects as wind and solar and insufficient reasons to keep open one of its largest coal-fired power plants.

The MPSC ordered DTE to submit a revised “integrated resource plan” by March 21. It also said DTE must submit a request for proposals for new electric generation resources before its IRP can be approved.

Under an IRP, regulated utilities like DTE are required to develop long-term plans, up to 15 years, on how they will meet electricity demand in their service areas. The plans also must include evaluations of energy waste reduction, supply sufficiency, demand response and the impact of state and federal environmental regulations. Any new generation source is required to be the lowest-cost and best option.

Since 2009, DTE said, it has been the state’s largest investor in renewables, spending $3 billion in solar and wind energy infrastructure and investments to power more than 500,000 households. DTE also was one of the first U.S. energy companies to announce a net zero carbon emissions goal and plans to cut carbon emissions 50 percent by 2030 and 80 percent by 2040.

Margrethe Kearney, an attorney based in Michigan with the Chicago-based Environmental Law and Policy Center, told Crain’s on Friday that DTE included in its revised plan a request for proposals for additional renewable energy resources, which the commission had called for.

“One of the issues with that RFP is that the minimum resource size is 25 megawatt projects, which means (some Public Utility Regulatory Policies Act of 1978) projects are too small to compete,” Kearney said in an email to Crain’s.

Small energy projects created under the PURPA law in Michigan include small wind and solar, hydroelectric, biomass and cogeneration plants. The federal law requires utilities to enter into power purchase agreements based on “avoided costs” with them if they qualify under the law.

“They did pick a single course of action, which includes only renewables and no (second) gas plant. That is good, but I want to hear DTE really get behind that,” Kearney said.

DTE’s revised energy plan also recognizes that a higher energy efficiency target is well within its reach is encouraging for customers and for the environment, Kearney said.

“Energy savings reduce costs for customers and reduce pollution to our environment. We hope to see DTE not just talk about using more renewable energy – but actually do it,” Kearney said. “Having just built an enormous and unnecessary natural gas plant, DTE needs to make a commitment to its customers that it won’t sink more capital into risky, irrelevant resources going forward.”

The MPSC said in its Feb. 20 order that DTE needs to reconsider keeping in operation its coal-fired Belle River power plant until 2030. The commission said keeping open the power plant was inadequately justified in the company’s IRP because an analysis of avoiding new environmental upgrade costs was not considered.

While DTE said it has revised its IRP based on the commission’s recommendations, DTE’s revised plan appears to continue to estimate closure of Belle River in 2029 to 2030.

In early 2018, DTE announced the long-term energy plan and pledged to add 1,000 megawatts of solar and wind energy power by 2022, doubling its current capacity and investments in renewable energy. If built, DTE’s new projects would represent a $1.7 billion investment that would power more than 450,000 homes and increase DTE’s renewable energy portfolio standard to 15 percent of generation, up from about 10 percent.

Crain’s previously reported that DTE plans to add 4,000 megawatts of renewable power over the next 20 years as it retires several aging coal-fired plants.

DTE has said that building the gas plant is the least costly option for customers, will help it reduce carbon emissions by 30 percent by 2030 and will replace some lost jobs due to coal plant closures in St. Clair County.