Advocates and Consumers Energy Reach Agreement on Critical Energy Efficiency Programs

Lansing, MI – Environmental and housing advocates, Michigan Public Service Commission (MPSC) staff, the Attorney General’s office, and Consumers Energy reached a new agreement that will expand energy efficiency – referred to as energy waste reduction (EWR) – programs and investments following approval by MPSC Commissioners today. The programs build on the previous energy efficiency agreement between advocates and Consumers Energy in 2022. The approved programs will be implemented over the next two years. 

The settlement increases investments in communities most impacted by energy burden within Consumers’ service territory. High energy burden results when households spend more than 6 percent of their income on energy bills. This is partly due to home inefficiencies from poor insulation, leaky roofs, and outdated appliances. Energy burdens are not shared equally by Michigan families. For example, in Kent County, low-income and non-white households experience the highest median energy burdens in the region. More than 10,000 households in Kent County have an energy burden above 30 percent according to the City of Grand Rapids Office of Sustainability.   

Specifically, the agreement includes: 

• An increase in income-qualified (low-income) energy efficiency program investments by a total of $15 million compared to what the company had proposed to spend; $9 million more for income-qualified single family homes and $6 million more for income-qualified multifamily buildings. The following graphic shows Consumers’ energy efficiency investments before environmental and housing advocates engaged the utility to increase its investments. The blue and green sections represent two different settlement agreements between the parties. 

• $2.25 million for the Flint Initiative, which is an energy efficiency program for low-income Flint residents. The Initiative will continue at least through 2025 thanks to the settlement, instead of ending in 2024 as Consumers proposed in its filed plan. The Initiative’s budget includes a minimum of $250,000 in funds to ready homes for efficiency upgrades, and is additional to the $1 million Consumers already committed to launch the Initiative last year after advocates’ spearheaded its creation. Consumers will target these funds to the neighborhoods that can benefit most from energy efficiency upgrades, solicit community input on the Initiative, and improve outreach and marketing within the target neighborhoods using more trusted messengers. 
• Second geotargeting initiative: The settlement also builds upon the Flint Initiative by requiring Consumers to launch a similar program in a second community by March 31, 2025. Consumers will incorporate stakeholder and community input in identifying a second location for targeted outreach and services to high energy burden households.
• Energy waste reduction goal of two percent savings for electric and one percent for gas, which is stronger than the plan originally proposed by Consumers.
• Education and outreach to engage customers, including encouraging the adoption of heat pumps in targeted locations and customer opportunities under the Inflation Reduction Act, as well as other educational opportunities to community groups, including how to access energy efficiency measure rebates and federal funding opportunities.
• Doubling Health & Safety pilot investment to approximately $2.5 million to address home repair and remediation issues that otherwise prevent customers from receiving energy efficiency upgrades.
• Income-Qualified Multifamily Program Design Improvements include increasing heat pump installations to at least 800 through 2025 and deeper collaboration with housing finance agencies and organizations to help affordable housing providers bundle energy improvements into rehabilitation projects.

Additional positive outcomes from the settlement include collecting and reporting customer data by census tract rather than zip code, which will help to better evaluate the program’s equity and overall effectiveness. The settlement also enables new energy efficiency performance incentives to encourage Consumers to invest more in programs for income-qualified households, install more heat pumps, and provide air sealing and insulation for income-qualified customers (which the company had proposed to eliminate from the performance incentive in its filed plan). The MPSC settlement can be found here. Consumers Energy energy efficiency programs can be found here.

Sierra Club, NRDC (Natural Resources Defense Council), National Housing Trust, and the Ecology Center participated as co-intervenors in the MPSC docket leading to the settlement. The organizations were represented by Troposphere Legal, and Sierra Club was also represented by Earthjustice and its own Environmental Law Program.

Statements from the environmental and housing advocates: 

"Advocates have persistently pushed the needle forward on policies that enable Michigan residents to take full advantage of the impact of energy efficiency, and this settlement is another testament to that effort,” said Tamara Horne, West Michigan Clean Energy Organizer with the Sierra Club. “Any negotiation that can bring results to neighborhoods suffering from high levels of energy burden is a step worth celebrating. But, it’s only a step in a longer journey of making sure Consumers Energy, and other Michigan utilities, do right by their customers and our environment through just laws and regulations.”

"The Health and Safety Pilot Program has seen tremendous success because it enables home repairs, like fixing faulty wiring, asbestos removal, and patching leaky roofs, in order to reduce deferrals for additional energy efficiency. These investments have a positive impact on a family's quality of life," said Alexis Blizman, Ecology Center's Policy Director. "Not only am I excited about the success of the pilot program and the increased investment, I'm thrilled that the program we advocated for years ago was so impactful that it was included in the new clean energy laws and that they will be permanent utility programs moving forward." 

“This agreement reflects the prioritization of energy efficiency as a critical tool for helping to solve Michigan’s climate and energy affordability crises, and specifically a commitment to deeper investments in programs for communities that are most in need,” said Laura Goldberg, Senior Director of Midwest Regional Impact at NRDC. “This 2-year agreement, and the prior plan settlements, help to set the stage for long-term statewide progress on energy efficiency, which is now reflected in Michigan’s new energy efficiency law in the Clean Energy Future Package.” 

“With this agreement, Consumers is addressing financial barriers faced by many affordable multifamily housing providers when implementing energy efficiency retrofit projects,” said Leslie Zarker, Director of Sustainability Policy at the National Housing Trust. “Consumers 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.”

“The Flint Initiative aims to reduce the burden on people whose utility bills consume a high amount of their monthly income and to ensure everyone is able to benefit from efficiency programs,” said Lauren Piette, Senior Associate Attorney with Earthjustice. “This settlement secures better outreach by trusted members in the community and additional funds so that more families who otherwise might not be able to afford deep efficiency improvements can access them.”