Settlement Agreement between DTE and Advocates Delivers Energy Efficiency Funds to the Most Vulnerable Families

Lansing, MI. -- Today, the Michigan Public Service Commission (MPSC) approved a settlement agreement between DTE, the Sierra Club, Ecology Center, Earthjustice, NRDC (Natural Resources Defense Council), National Housing Trust, and other parties regarding DTE’s electric and gas energy efficiency plans (referred to in Michigan as “energy waste reduction”). 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 their most recent Integrated Resource Plan. 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:

• Increase the company’s budget for income-qualified energy waste reduction efforts. DTE has committed to increasing its budget for income-qualified gas waste reduction programs by $3 million in 2022 and $5 million in 2023, and for income-qualified electric waste reduction programs by $750,000 in 2022 and $1.75 million in 2023. This amounts to a total increase of $10.5 million compared to what DTE originally filed for 2022-23, and more than $35 million over DTE’s income-qualified program budget for 2020-21. This means that DTE will be able to serve more income-qualified families in need of efficiency upgrades and measures, in a more holistic way. The funds are coming from reducing DTE’s budget for certain lower priority programs for market-rate customers. Thus, it will not raise rates or other fees for customers compared to DTE’s original filing. 

• Target particularly high-need areas to increase energy efficiency services for income-qualified households, with $1 million of the income-qualified budget dedicated to this initiative. The areas will be determined through a set of research studies to analyze the areas that are experiencing the highest energy burden and have other indicators of vulnerability or burden including race/ethnicity, how best to prioritize among them, and how to do effective outreach to those households. DTE will implement the geographic targeting initiative beginning in 2023 following the results of this research, and the development of an implementation plan. DTE has committed to including Sierra Club and other stakeholders at key stages of the development of both the research metrics and the implementation plan for the initiative.

• 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.

• Implement a range of tracking and reporting metrics that will help advocates better understand the equity of DTE’s investments across its energy waste reduction (EWR) program, by census tract. 

• Pair its new bill-assistance pilot with an energy efficiency component that includes a home energy assessment. DTE will track energy waste reduction measures installed in these homes, along with other data. DTE will also train the home assessors for this program to identify mold, asbestos, lead and wiring issues so that home health issues are identified at the same time as energy savings opportunities.

• Continuation and expansion of DTE’s Health and Safety Pilot, to include additional funds for both single and multi-family housing, expanded reporting, and recommendations for the use of healthier building materials, specifically targeting insulation and air sealing products.

Through this settlement, DTE will be able to 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.

Mike Berkowitz, Sierra Club’s Beyond Coal Campaign Senior Representative in Michigan said, “Michigan has one of the highest energy burdens in the country and most of that impact is in Detroit’s majority Black income-qualified communities. We are proud to announce this important settlement agreement, ensuring DTE equitably distributes resources in a way that prioritizes these neighborhoods that have been historically disenfranchised, lowering energy bills while making homes safer and more resilient.”

Advocates point out that Michigan has one of the highest energy burden rates in the nation, especially in the Detroit area. 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. 

“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, improving overall quality of life. The continuation and expansion of this program puts it on track to be incorporated as a permanent part of utility programs.”

Sierra Club, Earthjustice, Ecology Center, NRDC (Natural Resources Defense Council), 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.

“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 is a major step toward ensuring that all all of their customers, especially underserved communities and Black and Brown Communities, can have access to that opportunity.”

“Energy efficiency is key to maintaining and preserving Michigan’s affordable housing and this agreement with DTE includes critical, expanded energy efficiency investment in under-resourced communities and communities of color,” said Laura Goldberg, Director of Energy Efficiency for All at NRDC (Natural Resources Defense Council). “The agreement also requires deeper energy efficiency retrofits that focus on upgrades to air sealing, insulation, and heat pumps. This will be essential to keep bills affordable while keeping Michigan families safe and comfortable in their homes.”

“With this agreement, DTE is substantially increasing its investment in under-resourced homes with high energy burdens, including multifamily and rental homes,” said Annika Brindel, Midwest Director of Energy Efficiency Policy at the National Housing Trust. “DTE will also offer incentives for developers of Low-Income Housing Tax Credit properties to obtain high-quality ASHRAE Level II energy audits of their buildings, guiding smarter energy decision-making that will benefit their under-resourced residents for years to come.”

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 Olson, Bzdok and Howard.