July 26, 2023
By Amy Bandyk
Citizens Utility Board (CUB) of Michigan
"DTE’s integrated resource plan shows that the company will support clean energy only if it can also saddle ratepayers with unnecessary profit for shareholders from coal plant retirements at the same time. The IRP settlement agreement that the MPSC is approving today includes a provision that allows DTE to charge its ratepayers for a 9% return for DTE shareholders on billions of dollars that make up the undepreciated book value of the Monroe coal-fired power plant, which will be retired. For 15 years, DTE’s customers will be paying off the Monroe coal plant plus the 9% return that represents pure profit for shareholders. DTE residential customers already pay some of the highest rates in the country for substandard service with frequent outages. It is obscene to pile this shareholder return on top of their already high bills.
It didn’t have to be this way. The clean energy progress that beneficial provisions of the IRP will achieve could have gone forward without the giveaway to shareholders. DTE could have planned to charge ratepayers for the undepreciated value of the Monroe coal plant over time, but without the 9% shareholder return.
It is a shame because the benefits from other parts of the IRP are substantial. The IRP will lead to an increase in the amount of energy efficiency savings the utility must achieve and commits DTE to building more renewable energy to replace the Monroe coal units. Because renewables and efficiency are cheaper than coal-fired power, those provisions will lead to lower rates for customers compared to what DTE proposed before the settlement and compared to their previous IRP. The IRP also includes substantial expansions of programs for low-income customers, such as increasing the budget for energy waste reduction measures for income-qualified customers from over $30 million now to over $50 million by 2027. These measures help low-income households install more energy-efficient equipment, helping them reduce their electric bills. DTE will also donate $38 million to organizations that provide utility bill assistance and home energy efficiency improvements for income-eligible households.
Another positive aspect of the IRP that should not be overlooked is an increase in transparency for the DTE’s political activities. DTE must now disclose annually all political donations of $5,000 or more made by the company beginning in 2024. CUB has worked with the Attorney General raising attention to the issue of DTE ratepayers potentially being charged for utility political activities that may advocate for causes that are not in the best interests of ratepayers (see this blog post for background)."
The Citizens Utility Board of Michigan is a nonpartisan, nonprofit organization whose members are individual residential customers of Michigan’s energy utilities. CUB of MI advocates in support of more reliable power, cost-effective investment in energy efficiency and renewable energy and against unfair rate increase requests.