DTE Energy’s Integrated Resource Plan (Filed March 29, 2019, Approved April 15, 2020)
DTE Energy is the largest electric utility in Michigan, serving about 2.2 million customers in southeastern Michigan.
The integrated resource plan (IRP) is intended to be a document that assesses various options to cost-effectively serve the electricity needs of customers over the next 20 years.
DTE Energy, U-20471
On April 15, 2020, the Michigan Public Service Commission (MPSC) issued an order approving DTE’s integrated resource plan after the utility made revisions in response to the MPSC’s critiques from February.
Important differences in the approved IRP compared to the original version filed by DTE:
- Annual energy saving goals increased from 1.65% in 2020 and 1.75% in 2021 to 1.75% in 2020 and 2% in 2021.
- DTE includes the results of a request for bids for renewable energy projects in order to determine the cheapest path for procuring more power over the next few years. But DTE does not propose a specific process for procuring renewable energy through competitive bids going forward.
- Closely related to the IRP is DTE’s renewable energy plan. The MPSC had said the renewable plan needed to be revised along with the IRP because “many of the approvals that DTE Electric thought would be forthcoming via an IRP order will not occur and will need to be considered in other proceedings.” The renewable energy plan incorporates the results of the RFP to propose a specific new wind farm by 2021 and new solar power purchase agreements, as opposed to the “generic” renewables in the earlier version of the plan. The RFP does show overall lower costs than for the generic renewables. For example, the cost of power from the Meridian wind farm in the revised renewable energy plan is estimated to be $46 to $49 per MWh, compared to $51 per MWh for the generic wind resource.
- The utility will have to do a new analysis of the costs of retiring the Belle River coal-fired power plant. DTE wanted to retire the plant by 2029-2030 but according to opposition groups, a new analysis that included the cost of avoiding environmental controls will show that an earlier retirement is more economic.
More differences are listed in the MPSC’s announcement of the order.
On Feb. 20, 2020, the MPSC made an initial decision on the IRP, declining to approve it and instead asking DTE to revise it in several different ways:
- Look into competitive bidding for new power resources, allowing third-party wind and solar projects to have a chance to be considered along with utility-owned projects
- Increase annual energy saving goals from 1.65% in 2020 and 1.75% in 2021 to 1.75% in 2020 and 2% in 2021.
Read more about the IRP on CUB’s blog.
The IRP As Originally Proposed by DTE:
Highlights of this plan include:
- Adding 11 MW of solar plus energy storage pilot projects from 2020 to 2024
- Adding 693 MW of wind power from 2020 to 2024
- Using the MIGreenPower voluntary subscription program to add between 465 and 715 MW of wind and solar from 2020 to 2024. MIGreenPower is a program in which customers can sign up to pay an extra charge on their bills that goes toward paying for additional DTE wind and solar projects, so the exact amount of additional power is dependent on how many people subscribe.
- Many advocacy groups have criticized the methodology used by DTE, arguing it uses unrealistic assumptions that have led to DTE proposing less renewable energy than it would under different assumptions.
- Retiring coal plant units: the Trenton Channel plant in 2022, St. Clair unit 7 in 2022, St. Clair unit 1 in 2019 and repowering River Rouge unit 3 to run on recycled industrial gas and natural gas instead of coal by 2022. Belle River units 1 and 2 will not retire until 2029 and 2030, respectively, and the Monroe coal plant will run until 2040, but those dates may be reevaluated in future IRPs.
- Demand response: DTE’s demand response programs give customers that use large amounts of electricity to cut their demand at certain times to reduce pressure on the grid. The IRP proposes increasing the amount of targeted demand response from a little over 700 megawatts in 2019 to 859 MW by 2024, and then holding at that level through 2040.
- Energy Waste Reduction: The state of Michigan requires electricity providers like DTE to incrementally increase energy savings each year by the equivalent of 1% of the utility’s total retail electricity sales the previous year. The utility implements these energy waste reduction (EWR) targets through measures like rebates for customers to upgrade the efficiency of their homes or appliances.
In 2018, DTE increased its target to 1.5% from 1%. In the IRP, DTE proposes further increasing the target to 1.625% by 2020 and 1.75% by 2021. It is worth noting, however, that Consumers Energy, the second-largest utility in the state after DTE, proposed a 2% energy waste reduction level in its recently-approved integrated resource plan.