Michigan cities prevail in dispute with utilities over LED street lights

The Michigan Public Service Commission rejected DTE Energy’s proposal to raise rates for LED street lights last week and ordered the utility to engage in talks with the Southeast Michigan Municipal Street Lighting Consortium to arrive at a fair rate.

“The MPSC said that the evidence presented and the opinion that the administrative law judge wrote was very persuasive, which sided 100 percent with the testimony and analysis that our coalition presented,” says Rick Bunch, executive director of the Southeast Michigan Regional Energy Office, the nonprofit that organized municipal opposition in the case.

For now, rates will remain at the experimental level they’ve been at, pending the outcome of collaborative talks.

“We can live with that for the time being,” says Bunch. “Ultimately, the cities do want a regular tariff for LEDs.”

DTE had sought to raise rates for LEDs by 15-20 percent, depending on the type of fixture.

“We believe the order intended an equal percentage increase for various types of street lighting, and we’re evaluating our options,” DTE spokesman Scott Simons wrote in an email.

According to Bunch, the MPSC agreed with the administrative law judge’s findings that the basis for DTE’s proposed raises were invalid. Specifically, the judge found that DTE failed to demonstrate that its proposed rates were based on actual costs; it did not give municipalities credit for the up-front investments in fixtures owned by DTE; and it did not reduce projected maintenance expenses adequately to account for the longer life and durability of LEDs compared to older technologies.

Bunch expects the process to take three to six months. He is hoping to address larger issues in the conversation, including how advanced services like smart lighting, communications and emergency monitoring can be incorporated into DTE’s LED program.

“We’re trying to have the big picture conversation now, because in our view that’s an important part of what LEDs actually cost and how fast they pay off,” he says. “We want DTE to look at LEDs as a platform. You can install a lot of other services and functions and make money off of those.”

But first, he says, the LEDs must be installed.

“To me, it’s analogous to the decision of Microsoft and others to give away their browsers,” he says. “They make money from the things that people do with the browser. If we can get in agreement that LEDs are an important platform, then it will become a money maker for DTE.”