DTE Energy did not have its customers’ best interest in mind when it filed a Certificate of Necessity with the Michigan Public Service Commission (MPSC) outlining its plan to build a $1 billion natural gas power plant in St. Clair County.
The Michigan Conservative Energy Forum (MCEF) applauds DTE’s commitment to increasingly provide reliable and affordable energy by closing outdated, polluting, and costly coal plants, but we believe that by pivoting to natural gas alone, DTE is saddling ratepayers with unnecessary long-term costs, leaving families and businesses vulnerable to rising electricity prices.
While natural gas prices are at an all-time low, experts believe prices will rise in the (potentially near) future. If this is the case, the extra cost will be reflected in all our electricity bills.
A coalition of organizations presented expert testimony to the MPSC in January, demonstrating that DTE could save customers at least $339 million – and as much as $1.2 billion – in fuel costs over the next two decades by utilizing a combination of solar and wind power along with energy efficiency measures. Unlike natural gas, renewable energy generation is unaffected by fuel costs. By diversifying its energy portfolio, DTE could keep costs low for ratepayers in an uncertain future.
Concern for the future price of natural gas is not the only reason DTE should consider alternative sources of energy. The cost to produce renewable energy has dropped dramatically in the last decade, making renewable power projects a cost-effective option that has far-reaching benefits beyond leaving more money in ratepayers’ wallets, including improving our economy, national and grid security, as well as protecting our natural resources.
Xcel Energy recently asked for bids to replace retiring coal plants in Colorado. It received 87 bids for solar power projects coupled with battery storage at a median price of $36/megawatt hour.
By contrast, DTE did not seek any bids for renewable energy. Rather, DTE only asked for bids to build gas plant capacity. If its current proposal is approved by the MPSC, customers will be on the hook to pay $67/megawatt hour over the lifetime of the plant.
The future of energy lies in decentralized microgrids and smaller but abundant generating stations – but DTE remains in the past, soliciting proposals for plants only over 250 MW, effectively cutting out smaller renewable energy projects from consideration.
DTE also solicited proposals for seven-year contracts – although the cost of their plant would be spread out over 30 years. DTE Energy is suppressing competition even as they request outside bids.
Rather than saddle ratepayers with the long-term and unpredictable cost of a new natural gas plant, DTE should consider alternative options, including renewable energy projects like large-scale solar and even transmission solutions.
MCEF was deeply engaged with the development of energy legislation, Public Acts 341 and 342, passed by the State Legislature in 2016. We worked tirelessly to educate policymakers and the public on the benefits of a diversified “all of the above” energy model that increasingly places an emphasis on clean, renewable, and efficient energy.
Under that historic bipartisan legislation, lawmakers established renewable energy goals and a new Integrated Resource Planning (IRP) process to determine the appropriate level of solar and wind power that our utilities should include in future developments.
It is now up to the MPSC to ensure that this planning process is rigorous and fair, and that DTE is investing in the best possible – and most diverse – portfolio of resources for its customers. We ask that the MPSC require a proposal that integrates diverse sources of energy, and above all else, focuses on limiting the unnecessary future energy costs passed off to Michigan ratepayers.
Larry Ward is executive director of the Michigan Conservative Energy Forum.