DTE Energy headquarters in Detroit, Michigan. Credit: Ikcerog / Wikimedia Commons

DTE’s strategy, clean energy advocates say, is “less ambitious” than Consumers’ “transformative” long-range plan. 

Michigan’s two largest utilities have similar carbon-reduction goals for the next two decades, but one of the companies is drawing far more criticism for how it plans to get there.

State regulators recently approved a long-range plan by Consumers Energy that drew wide praise for its commitment to solar and efficiency. Meanwhile, DTE Energy faces resistance as its long-range plan begins the same process.

At a public hearing last week in Detroit, 40 out of 50 speakers testified against DTE’s integrated resource plan, which clean energy advocates say lacks ambition compared to Consumers’ plan and leans too much on natural gas.

“Where Consumers put forward a ‘clean and lean’ plan that was truly transformative in its commitment to increased energy efficiency and renewables for the long haul, DTE’s plan feels both less ambitious and less committed on efficiency and renewables,” Ariana Gonzalez, senior energy policy analyst with the Natural Resources Defense Council, wrote this month.

The new integrated resource plans are required under the state’s 2016 energy laws. DTE filed its first such plan in late March, and last week’s hearing featured the largest public turnout yet for a utility integrated resource plan.

DTE officials dismissed comparisons with Consumers as inaccurate, noting that the utilities are at different starting points, particularly when it comes to natural gas. Consumers’ portfolio is 36% natural gas-powered, while DTE’s is 5%.

“DTE is overwhelmingly in favor of renewables,” said Irene Dimitry, DTE’s vice president of business and planning development. “For a lot of people who were really passionate about their positions [at the June 20 public hearing], the information was not always accurate in terms of characterizing our plan, but it’s a good thing to hear peoples’ point of view.”

A fair comparison?

DTE and Consumers are both preparing to close their remaining coal plants and have each pledged major reductions in carbon emissions. DTE plans an 80% reduction by 2040, while Consumers anticipates more than 90% by 2040. While Consumers has committed to adding 5,000 megawatts of solar by 2030, DTE plans to add 525 megawatts of solar in that time (though just 11 MW by 2024) and make major near-term investments in natural gas, an option Consumers officials have called a risky bet

“Our [long-term] portfolios are not that different; we’re just starting at different points,” Dimitry said.

Following last week’s meeting, Michigan Public Service Commission Chair Sally Talberg said there are a “lot of common elements” between DTE’s and Consumers’ plans.

“Each utility is unique,” Talberg said. “There isn’t a one-size-fits-all — it depends where they’re at.” 

Others disagree. Ben Inskeep, a senior policy research analyst with EQ Research who tracks utility plan filings across states, called the different starting point argument a “bit of a red herring.” 

Last year, the Public Service Commission approved DTE’s plan for a 1,150-megawatt combined cycle gas plant in eastern Michigan. The proposal was filed less than a year before the new integrated resource plan rules were formalized in Michigan, which opponents maintain didn’t adequately consider other clean energy sources like demand response, energy efficiency and renewables in order to maintain reliability.

“If [DTE] was more confident that much more natural gas is needed, we would have seen them go about that process in a way that would have more transparently compared a new gas plant to other resource alternatives,” Inskeep said. “While this natural gas plant might meet reliability goals, what other options were there to meet those goals? They put all of their eggs in one basket instead of looking at it as an opportunity to build a more diverse set of resources in a more piecemeal way.”

Solar in question

DTE’s “proposed course of action” includes five-year “defined” plans and “flexible” plans through 2035. The long-term plan is based on four different models: business as usual; “emerging technology” where clean energy costs decline 35%; “environmental policy” that mandates carbon-emission reductions; and DTE’s own reference case.

A key sticking point in DTE’s plan is over the company’s lack of commitment — at least in the near term — to solar power. It contrasts starkly with Consumers’ 5,000-megawatt target in the next decade.

While DTE plans 11 MW of solar in the next five years, it aims to add 693 MW of wind, doubling its renewable portfolio in that time. DTE also plans to add between 465 MW and 715 MW of renewables based on demand for its voluntary green pricing program, in which customers pay a premium for renewable energy.

“There is a difference in points of view of when we think solar is more advantageous than wind,” Dimitry said. “Consumers is moving almost immediately to solar. We believe there’s still some opportunity for additional wind; we think it is more economic at this point in time.”

Inskeep said he doesn’t “begrudge” DTE for pursuing wind instead of solar, but he said other utilities — including Consumers and Northern Indiana Public Service Co. — are pursuing solar at a much more aggressive rate. He compared DTE to Duke Energy Indiana, which plans to invest similarly in natural gas. Utilities across the U.S. are taking these divergent approaches to natural gas as they set climate change goals.

“Given other utilities found that solar offers a much more viable option for capacity needs on the grid, it is a concern those assumptions and modeling related to solar might not be accurately capturing the benefits those resources are meant to bring,” Inskeep said.

Future gas and third parties

Advocates maintain the $1 billion natural gas plant approved by regulators last year is a long-term risk for ratepayers given the volatility of gas prices and an anticipated decline in renewable prices. 

Dimitry said the plant will balance reliability while being “integral in our path to reducing carbon emissions.”

Dimitry said the utility has not decided whether additional gas plants will be built. Two of DTE’s four modeling scenarios beyond the next five years include 414 MW of additional gas generation. The utility will file another integrated resource plan in five years, she noted, “which will allow us to have five more years of market trends and technology evolution before we make that decision.”

Yet critics have also raised concerns about DTE’s commitment to natural gas while its subsidiaries build out gas pipelines and storage in the region. A DTE subsidiary, for example, co-owns with Enbridge the Nexus gas pipeline that began commercial operations late last year. The watchdog group Energy and Policy Institute has noted that DTE executives tout the growth in natural gas demand to match an increase in supply.

“Our planning and decisions are made at arm’s length between our business units,” Dimitry said. “When we did our planning on the electric side, we’re assuming competitively bidding and sourcing what gas supply we’ll use. We make sure we’re not in any way advantaging our sister business to the detriment of anyone else, including customers.”

Other opposition to DTE’s plan involves the role of third-party companies offering cheaper contracts for power than what DTE would build it for. Consumers’ plan requires half of its renewable portfolio to be owned by third parties while DTE seeks to own its projects. Until 2016, the state’s renewable energy law required a 50-50 split in projects owned by utilities and third parties.

Dimitry said while DTE competitively bids for the equipment, construction and engineering for typical projects, it’s more beneficial for customers if the utility ultimately owns the asset in the long term.

Emily Prehoda, policy and innovation director for solar installer Chart House Energy, countered that this approach ignores potentially cheaper sources of energy in the near-term.

“DTE’s practices of existing laws and policies favors a self-serving future reliant on fossil-fuel burning technologies while simultaneously thwarting competition that burdens their customers,” Prehoda told the Public Service Commission last week. “By refusing to incorporate and support third-party sources of energy, DTE is not providing the lowest cost service to its customers.”

Andy Balaskovitz

Andy has been a journalism fellow for Midwest Energy News since 2014, following four years at City Pulse, Lansing’s alt-weekly newspaper. He covers the state of Michigan and also compiles the Midwest Energy News daily email digest. Andy is a graduate of Michigan State University’s Journalism School, where he focused on topics covered by the Knight Center for Environmental Journalism and wrote for the Great Lakes Echo. He was the 2008 and 2009 recipient of the Edward Meeman Award for Outstanding Undergraduate Student in Environmental Journalism at Michigan State.