FOR IMMEDIATE RELEASE
Date: Tuesday, October 31, 2023
Contact: Edward Smith, edward.smith@sierraclub.org
Years of Advocacy on Energy Efficiency Saves DTE Customers Big Bucks
Final Decision Goes to the Michigan Public Service Commission
Lansing, MI -- Today, a settlement was reached between DTE, the Sierra Club, Ecology Center, Earthjustice, NRDC (Natural Resources Defense Council), National Housing Trust, and other parties regarding the monopoly utility’s electric and gas energy efficiency plans (referred to in Michigan as “energy waste reduction” plans) for 2024 and 2025. The settlement came after the Michigan Public Service Commission (MPSC) issued its annual report earlier this month detailing that Michiganders saved almost $3 for every $1 spent on energy efficiency. The settlement was filed today at the MPSC, but is pending approval by the commissioners for it to become final.
Through the process mandated by state law, Michigan utilities must file plans to allocate resources that improve energy efficiency and reduce wasted electricity in their service territory. DTE is required to deliver customers at least 2% energy savings annually, following the outcome of its most recent Integrated Resource Plan, specifically in low-income communities.
"Advocates have persistently pushed the needle forward on policies that enable Michigan residents to take full advantage of the power of energy efficiency, and this settlement is another testament to that effort,” said Andrew Sarpolis, Michigan Field Manager with the Sierra Club. “Utility affordability is a deeply critical issue that affects far too many people in Michigan. Any negotiation that can bring results to neighborhoods suffering from high levels of energy burden is a step worth celebrating. But, it’s just a step in a longer journey of making sure DTE Energy, and other Michigan utilities, do right by their customers and our environment through good laws and regulations.”
The group of environmental and housing intervenors have participated in the MPSC bi-annual proceedings on DTE’s energy waste reduction (EWR) plans for many years. The intervenors have pushed the utility to steadily increase its spending for energy efficiency measures for lower income households, to allocate funding to provide the home repairs and other health and safety measures needed for the energy efficiency work to go forward, and to otherwise make its programs more equitable and effective. These proceedings require legal counsel and technical experts, often making them out of reach for the average customer and many smaller community groups to directly engage.
“We have already seen tremendous success with investments in health and safety interventions. These additional measures have allowed homes that have had energy efficiency deferrals in the past to make the necessary repairs that ensure that the homes most in need of energy waste reduction are now eligible,” said Alexis Blizman, Ecology Center’s Policy Director. “Additionally, by addressing health and safety measures, issues such as air quality, comfort, and removal of environmental hazards have the additional effect of creating a healthier place for people to live. While I am thrilled to see the expansion of this pilot, legislative changes are still needed to ensure that these measures can be a permanent part of utility programs.”
As Michigan’s largest utility, DTE serves millions of customers, and how it funds and prioritizes energy efficiency spending has huge impacts on the communities affected. Among other things, the settlement agreement requires DTE to:
- Extend and improve a neighborhood targeting initiative secured in the advocates’ previous 2022 settlement of DTE’s energy waste reduction plan, which will target particularly high-need areas to increase energy efficiency services for income-qualified households. The settlement doubles the budget for this initiative to $2 million, requires DTE to take steps to help partner organizations or governmental bodies leverage new sources of funding, and requires better outreach and education through trusted messengers in the neighborhood.
- Work toward a performance incentive that rewards the utility financially for installing high-impact measures that substantially reduce energy bills and reduce greenhouse gas emissions, such as electric heat pumps, heat pump water heaters, and air sealing/insulation (i.e., weatherization), as opposed to gas furnaces, gas water heaters, or minor measures such as light bulbs.
- Encourage the state to create an implementation plan for the home weatherization and electrification rebate programs under the Inflation Reduction Act that includes a one-stop-shop to help customers stack different funding sources (federal, state, utility programs) for home upgrades.
- Implement a range of tracking and reporting metrics that will help advocates better understand the equity and efficacy of DTE’s investments across its EWR program, including by census tract.
- Improve Income-Qualified Multifamily EWR program design, including commitments to deeper collaboration with Michigan State Housing Development Authority (MSHDA) and MI Saves, improved rebate payment options, and continued detailed reporting to ensure robust implementation.
- Work to ensure coordination and cross-information between Michigan 211 and the Income-Qualified energy waste reduction programs.
Following the success of the ‘Health & Safety’ pilot program that advocates persuaded DTE to implement several settlements ago, DTE will also double funding for health and safety measures required before a home can receive weatherization measures, like fixing faulty wiring or structural issues.
Through this settlement, DTE’s two-year plan must serve more income-qualified communities in need of efficiency measures, target those efforts toward neighborhoods with the highest energy burdens, and embrace more holistic, whole-home safety measures.
“DTE customers deserve to live in safe, healthy, and energy efficient homes,” said Chinyere Osuala, Senior Attorney in the Clean Energy Program at Earthjustice. “This settlement requires DTE to work closer with underserved communities to address energy efficiency and energy affordability needs.”
Michigan has one of the highest energy burdens in the country and most of that impact is in Detroit’s majority Black communities. The programs secured in the agreement will lower energy bills while making homes safer and more resilient while holding DTE accountable to equitably distributing resources in a way that prioritizes these neighborhoods that have been historically disenfranchised.
“With this agreement, DTE is addressing significant financial barriers faced by many multifamily affordable housing providers when implementing energy efficiency retrofit projects,” said Leslie Zarker, Director of Sustainability Policy at the National Housing Trust. “DTE will offer staged rebate payment options that can reduce cash flow pressure on housing providers, and will work with MSHDA to encourage earlier incorporation of energy efficiency measures in Low-Income Housing Tax Credit applicants’ rehabilitation projects.”
Energy burden is the percentage of a household’s income that goes to paying energy bills, and is used as a metric to measure how burdensome energy costs are on income-qualified households. Energy burden has been shown to disproportionately impact communities of color and data shows a correlation between neighborhoods with high energy burden and neighborhoods with a legacy of redlining. The median energy burden of Black households in Detroit is 54 percent higher than that of non-Hispanic white households.
“Energy efficiency is a critical and essential foundation to equitable climate solutions in Michigan,” said Laura Goldberg, Midwest Director of Energy Equity and Affordability at NRDC. “This agreement requires robust, deeper energy efficiency programs for the next two years, especially for under-resourced Michigan communities. Michigan still needs critical changes to its state-wide energy waste reduction legislation to ensure the long-term affordability and climate benefits of energy efficiency reach all Michiganders.
Sierra Club, Earthjustice, Ecology Center, NRDC, and National Housing Trust intervened to push DTE to make good on its stated commitment to strive towards racial equity and justice. By proactively investing resources in high energy-burden neighborhoods, DTE will help families save energy and live in healthier homes.
Sierra Club was represented by its own Environmental Law Program and Earthjustice in the docket, and all advocates noted above were also represented by the law firm of Troposphere Legal.
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