‘DTE Energy Settlement Is an Important Victory but the Michigan Legislature Must Go Further

On Wednesday, our long campaign to end the use of coal in Michigan has achieved a significant step. The Sierra Club  and a group of intervenors, announced a settlement agreement with DTE Energy on their energy plan, formally known as an ‘integrated resource plan.’ Sierra Club was represented in the Michigan Public Service Commission docket by Earthjustice and local firm Olson, Bzdok and Howard, and worked closely with the Natural Resources Defense Council and Michigan Environmental Council. 

As with any ongoing fight, the work does not end here. DTE Energy still plans to operate its fossil fuel plants well past the necessary retirement deadlines to ensure a stable planet, and its actions still threaten to burden its most vulnerable ratepayers. To achieve climate justice, we must continue to emphasize affordable energy, a just transition, and rapid climate action. Therefore, the legislature still must act to solidify the transition away from fossil fuels, while also protecting ratepayers.

Nonetheless, we are thrilled to announce that through this settlement agreement, we have secured a faster retirement date for the nation’s third largest climate polluter, the DTE Monroe Coal Plant, and new commitments to invest in renewable energy and energy efficiency in Michigan. This deserves celebration and recognition as well, even if it is only the first step in a larger movement toward sustainability.

The Settlement: A Summary

Each time DTE Energy brings forward a long-term energy resource plan, we have the chance to challenge it in a case before the Michigan Public Service Commission (MPSC). Sierra Club has never achieved everything it wanted in a single case, but each time we have worked as hard as possible to move the goalpost closer to clean energy, climate justice, and away from gas and coal. Over the past decade, we have been enormously successful in retiring Michigan’s coal fleet. In fact, this case deals with one of the last coal plants in Michigan planned to run past 2030. Here are a few of the things that happened in this settlement: 

  • The exciting news is that the retirement date for units 1 and 2 have been accelerated from the plan originally filed by DTE, with these units now set to retire by 2032 instead of 2035. About a year ago, DTE Energy’s plan was to retire all 4 units by 2040. Monroe units 3 and 4 will retire in 2028. So, this is a crucial step toward a greener future because Monroe is such a large climate emitter (third biggest in the nation). Even a few years can have a huge impact. 
  • It requires DTE to pay $38 million into community-led programs to assist low-income customers
  • $30 million allocated to energy assistance
  • $8 million to support organizations that will provide solar and battery installation, including funding for home repairs and energy efficiency needed to complete these upgrades
  • DTE Energy committed to more clean energy than they would have otherwise, bringing us closer to a more sustainable energy mix. DTE now has planned to increase energy efficiency savings to 2% annually through 2027. DTE has committed to direct an additional $70 million in energy efficiency funding toward programs for income-qualified customers in 2024 through 2027, while we have retained the right to advocate for higher funding levels in DTE’s recently filed and future energy efficiency dockets.
  • And, DTE will seek to obtain 3,800 MW of solar and wind, and 780 MW of storage, through 2030, with a chance they will pursue additional renewables if they meet identified cost thresholds in the future. which will all help ensure that Monroe is not replaced with a new gas plant. 
  • Furthermore, DTE will be required to defend the use of the DTE Monroe Plant again in a resource plan filed in 2026, rather than 2028 as would otherwise be required, providing us with an opportunity to continue our advocacy efforts.
  • DTE will end coal burning at Belle River Units 1 and 2 (1,270 MW combined) in 2025 and 2026, respectively, two to three years earlier than the previous end of 2028 retirement date. However, Belle River is not being retired (as would be ideal) but, instead, is being converted to a gas-peaking resource that is anticipated to operate approximately 10% of the time.
  • DTE will retire the River Rouge gas-fired peaking units in 2024, and will evaluate in its next IRP the impacts of three other peaker plants – Delray, Northeast, and Superior – on surrounding environmental justice communities.
  • Requires the utility to file public disclosure reports detailing any charitable and political contributions to individuals and entities adding up to $5,000 or more
  • Increases the cap on distributed solar to 6%, allowing more residential customers to install rooftop solar

The Settlement: Challenges

However, we must address some challenges. The agreed-to energy mix falls short of our goal of achieving a coal-free energy grid by 2030 through legislation. In addition, the settlement’s designation of a 9% ratepayer funded rate of return on future capital investments underscores the need to ensure DTE is making only the most cost-effective choices, and not investing in risky fossil gas infrastructure. While the 9% rate of return is lower than the current national average for utilities, and what DTE received in its last rate case, it does not do enough to address the high energy bills that cause hardship for many Michiganders. Part of our push for climate justice is ensuring that ratepayers, especially those in low-income or BIPOC communities, are not needlessly energy burdened by DTE Energy’s buildout of unnecessary or unneeded infrastructure. 

Despite leaving further work to do, our settlement is a win for the environment, and we will continue to push for additional change through legislation, public pressure, and grassroots action. Nothing in the settlement precludes our ability to continue pushing for Monroe retirement in 2030. We will also still have the chance to fight any proposed fossil fuel projects in the future and prevent DTE Energy from recovering ratepayer-funded profits on them by proving they are not necessary before the Public Service Commission. 

Why DTE Monroe Is So Significant, and why the fight continues 

Every additional year the DTE Monroe Plant operates, it emits vast quantities of carbon, fueling climate catastrophes like the Canadian wildfire smoke that impacted us a few weeks ago. This gave our region some of the worst air quality in the world, and climate change will cause it to happen with greater frequency and intensity if we do not take action. This is especially a burden on cities like Detroit, which have elevated (and growing) asthma rates. While the rate of asthma statewide has stayed relatively flat (11% to 11.1%), the Detroit rate has grown from 13.7% (2005) to 16.2% (2017-2019).

Retiring Monroe units 1 and 2 three years earlier will avoid emissions of about 24 million short tons CO2, 6,000 short tons SO2, and 7,000 short tons NOx based on how these units have historically operated. This contributes to respiratory diseases and public health issues like asthma. There is no safe level of fossil fuel use in our communities.

The plant also has impacts on the natural environment. It significantly warms the water around the plant, harming the natural wildlife. In fact, it is such a large user of water that its intake can sometimes cause its local river to run backward during high usage. 

While the 2032 retirement date represents significant progress, we also acknowledge that DTE Monroe retiring sooner than 2032 would benefit our state’s health and climate even more. Right now, there are bills in the legislature to retire coal by 2030. One of the bills in the recent package calls for a renewable energy standard of 60% by 2030 and an ambitious target of 100% carbon-free energy by 2035.  

Getting Involved: Where Do We Go From Here?

It is important to note that this victory is part of a fight to end fossil fuels. Legislation this summer is a chance to deal a final blow to the carbon-intensive energy devastating our planet and communities in Michigan.

While we celebrate the positive changes we have accomplished, we must remain vigilant and committed to protecting our world for future generations. Legislation and ongoing pressure are essential tools in our fight against coal. 

That is why the Michigan Chapter is kicking off a summer of in-district lobbying. Michigan’s House and Senate will recess for most of July and August, with members spending time in their districts. Now is the time to use your voice to influence your lawmakers and urge them to prioritize environmental issues when they head back to the Capitol. Join our in-district lobbying team and help us make game-changing investments in renewable energy and water infrastructure a real thing. Your voice represents real power in Lansing right now - we need you! Join us by registering here.