– Ann Arbor residents will vote in November on whether to create a sustainable energy utility (SEU) to increase access to rooftop solar, battery storage, and other technologies that reduce greenhouse gas emissions and improve reliability.
– The SEU would remove financial barriers to rooftop solar, making it more accessible for residents and creating more energy resilience without needing to take over DTE Energy’s grid.
– The proposal stops short of the full municipalization that the group Ann Arbor for Public Power advocates. If approved, the SEU would be up and running in about 18 months.
Ann Arbor residents will decide in November on whether the city should create an energy utility to increase access to rooftop solar, battery storage and potentially other technologies that reduce greenhouse gas emissions and improve reliability.
If it’s approved, residents and businesses could subscribe to this sustainable energy utility and receive a portion of their energy from rooftop solar and battery storage.
Supporters say the plan will remove financial barriers to rooftop solar, making it more accessible for residents and creating more energy resilience without needing to take over DTE Energy’s grid.
“By doing this through a utility, you take away the need to have that upfront capital or have good enough credit scores to get (rooftop solar) at a reasonable rate,” Missy Stults, director of Ann Arbor’s sustainability office, told Planet Detroit. “You allow people to participate in the utility just by paying their monthly bill.”
The city says the SEU will also help pay for homeowners’ energy efficiency upgrades and could eventually incorporate community solar, geothermal energy, micro-grids, or electricity sharing between houses. The proposal stops short of the full municipalization that the group Ann Arbor for Public Power advocates.
But some say an SEU could pave the way for the more ambitious project of taking over DTE’s grid in the city.
If Ann Arbor voters approve the ballot measure, Stults said the SEU would be up and running in about 18 months.
Stults previously said that the SEU is designed to be replicable, providing a model for how other communities could reduce their carbon emissions.
How Ann Arbor’s sustainable energy utility would work
With the SEU, subscribing customers will have separate bills and meters for service through DTE and the city-owned utility, although overall charges could be reduced. The city says the proposed SEU “provides access to clean energy at rates cheaper than what we currently pay for dirty electricity and offers energy storage solutions for less than the average cost of a whole-house generator.”
According to the city, the SEU could provide “most of the community’s current electrical needs” but will take time to scale up. However, a city report from 2023 shows that an SEU may only produce around 10% of the city’s energy by 2030.
Mike Shriberg, professor of practice and engagement at University of Michigan’s School for Environment and Sustainability, said there’s a “simpleness and brilliance” to the SEU proposal. He said it allows Ann Arbor to pursue its climate goal of achieving carbon neutrality by 2030, without needing to engage in what could be a long legal battle to take over DTE’s network.
Shriberg was also enthusiastic about the SEU’s focus on energy efficiency.
“Some of the lowest hanging fruit comes from energy efficiency and conservation,” he said. “In some ways, it’s even a bigger benefit than the renewable energy side.”
The city refers to energy waste reduction as “a cornerstone of decarbonization” that will lower energy costs, improve resident comfort and health and make the community less grid-dependent.
However, Shriberg said that reliability will only improve in proportion to the amount of battery storage added by the SEU, because rooftop solar panels will otherwise send excess energy back onto DTE’s grid, at least until micro-grids are enabled.
Michigan law currently doesn’t have a law enabling community solar, where residents subscribe to an offsite solar array to receive bill credits for the energy produced, so projects would need to be managed through local utilities. Having its own utility would allow Ann Arbor to accommodate community solar, which could be especially important in a city where roughly 55% of residents rent their homes.
Ann Arbor could also eventually use the SEU to invest in networked geothermal, which uses ground-source heat pumps, underground water-filled pipes and deep wells to draw on relatively stable ground temperatures to heat and cool buildings.
“Instead of individuals going with geothermal…we can get greater efficiencies by having a central loop and more fields that everyone comes into,” Stults said.
She said building this kind of infrastructure would be a major undertaking, but that the city was looking to build a pilot project in the Bryant neighborhood that could give them the technical and social understanding of how to carry such projects.
DTE has previously said it doesn’t have a position on the SEU proposal. “DTE is dedicated to supporting the City of Ann Arbor’s clean energy goals,” utility spokesperson Ryan Lowry said in a statement, noting that the SEU would “provide Ann Arbor’s residents and businesses with another option to reduce their own carbon emissions.”
DTE often touts its MIGreenPower program, in which customers voluntarily pay a premium for green power, as an option for customers wishing to reduce their carbon footprint.
Some say full municipalization is a better path to reliability
While a sustainable energy utility could put a serious dent in Ann Arbor’s climate-warming emissions, it may be less effective at improving reliability, often the top complaint about DTE’s service.
Municipalizing electric utilities offers significant advantages for improving reliability compared to SEUs, according to research from the University of Michigan Law School’s Problem Solving Initiative.
“If, when you run out of power, you blame your local mayor and city council, they have a very direct incentive to make sure that the grid is more reliable,” Shriberg said.
Ann Arbor for Public Power, the group backing full municipalization, hasn’t taken a position on the SEU. However, the group’s president, Greg Woodring, said the SEU could be a stepping stone to a full takeover of the DTE’s infrastructure, a process the city says could take a decade and cost millions to litigate.
“Every bit of generation that we build up within the city could be used to support a full municipal electric utility,” Woodring said, adding that the billing and administration infrastructure for the SEU could be rolled into a comprehensive public utility.
However, he said it could take time for the SEU to ramp up as it adds subscribers and finds other funding sources, as opposed to public power, which could immediately get revenue from the entire city.
He also pointed out that the SEU isn’t set up to buy power from outside the city, something that could give Ann Arbor more options for sourcing energy.
Woodring said there was also a risk that the SEU could dilute the energy needed to establish a comprehensive municipal utility that might better address Ann Arbor’s reliability problems.
“We certainly wouldn’t want people to think that this is good enough and that we can stop here,” he said.
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