Ann Arbor Beyond Bernie supports Ann Arbor for Public Power.
Thank you to the Washtenaw County Democratic Party for inviting us to speak on the benefits of public power and how public power must be part of the fight against Environmental Racism and Climate change.Ann Arbor for Public Power
From the A2P2 website
Municipalization is the process of a city acquiring a private utility and establishing a public power utility (also known as a municipal power utility). Public power utilities are community-owned, not-for-profit electric utilities. They provide safe, reliable, low-cost electricity to more than 49 million ratepayers across the country, while protecting the environment. Other more familiar examples of municipalized utilities are public works, water, and sewer. There are 2,000 communities across the U.S. that get electricity from a public power utility. These include major cities like Austin, Nashville, Los Angeles, and Seattle, small towns and the Navajo nation, and 40 municipalities in Michigan. Together, these utilities serve 1 in 7 electricity customers across the U.S. and operate in 49 states.
DTE is an investor-owned utility. The interests of DTE’s shareholders (who seek profits) are not aligned with those of the rate-paying community (who seek affordable, reliable, and resilient power from clean and renewable sources).
DTE has a dirty power mix. As of 12/31/2019, 63% of DTE’s energy is from burning coal; only 7% wind and solar. The average utility only uses 23.4% coal.
DTE continues to invest in fossil fuel infrastructure, with a new $1B natural gas-fired power plant coming online in St. Clair County in 2022. Had this $1B been invested instead in renewables, DTE could have potentially grown their renewable energy portfolio from 11 to 24 percent, according to Vote Solar, Union of Concerned Scientists and the Environmental Law and Policy Center5. These continuing investments demonstrate a disconnect between DTE and Ann Arbor, with respect to our established timeline for energy transition as embodied in A2Zero and our fundamental values as a community.
DTE is expensive. DTE’s residential electric rate of 17.51 cents/kWh is 32% higher than the U.S. average (13.28 cents). Regulated monopoly utilities like DTE overcharged millions of U.S. ratepayers in the Midwest at least $350 million in 2018 by selling them power from coal plants instead of from lower-cost, cleaner sources.
DTE is an aggressive political player. Both CCA and municipalization pose a risk to DTE’s bottom line. Ann Arbor’s carbon neutrality plan relies upon CCA to decarbonize the electric grid (linked to 40% of our emissions), but state law currently prohibits this practice, posing a formidable hurdle to the A2Zero strategy. DTE spent $94,700 on statewide lobbying efforts in the first six months of 2020; with a Republican controlled legislature in Michigan, CCA legalization is anything but a sure bet.
The A2Zero plan of Ann Arbor gives a path to Carbon Neutrality by 2030.
Municipalization will help us get there, because we will be Cutting DTE out of the picture.
The current plan to reduce emissions is called Community Choice aggregation (CCA).
CCA needs to be passed in Lansing and doesn’t go as far as municipalization
Even if we get CCA passed, we will still be using DTE’s infrastructure
With a municipal utility, we don’t rely on DTE’s dirty fossil fuel power; we can create our own renewable energy by investing in wind and solar in Ann Arbor.
Municipalization is a legal process that is already outlined in Article VII, Section 25 of the Michigan constitution. CCA requires a change in the law.
We don’t need Lansing’s approval to pass Municipalization, we put it to a vote in Ann Arbor.
Municipalization can provide stable, union jobs for Ann Arbor.
A municipal utility will give us the power to make electricity Cheaper and more Reliable
An Investor Owned Utility
DTE Energy is the largest utility in Michigan, one of the largest in the country, and a Fortune 500 company, with a market capitalization of over $22 billion (July 2020). DTE provides electricity to Southeast Michigan and the thumb area, and natural gas to much of the state. The company’s stock is publicly traded. According to a 2020 company SEC filing, DTE Energy “provided our shareholders with a five-year total shareholder return of 177%.”
DTE makes electricity mostly from burning coal. Fuel mix for electricity generation (December 31, 2019)
By comparison, Michigan’s other major utility, Consumers Energy, relies on coal for just 27% of its electricity generating capacity. Consumers relies mostly on gas, with wind and solar providing 5% of its power.
Inferior service and pricing
DTE is highly prone to outages and is slow to restore power to customers. In 2017, both DTE’s total outage time for customers and its average time to restore power, after a “major event day,” were the highest in the state by far. Michigan’s overall power restoration time was second worst in the country that year after West Virginia. But DTE’s residential electric rate of 17.51 cents/kWh is 32% higher than the U.S. average (13.28 cents).
DTE has carbon emission reduction goals: 32% reduction (from 2005 levels) by the early 2020s, 50% by 2030, and 80% by 2040, with net zero carbon emissions by 2050. Setting aside the too-slow phasing out of fossil fuels (climate scientists are calling for developed countries to achieve true zero emissions by 2035), the company does not have a plausible plan for achieving even these goals. DTE does intend to retire its 12 existing coal-fired generators (in 5 locations), but its last two coal generators will remain in operation until 2040. Meanwhile, DTE is constructing a $1 billion, 1,100 MW natural gas power plant in St. Clair County, and has indicated its intention to build another natural gas-fired power plant.