Utilities to spend $10B on in-state services, materials
Lansing — Michigan’s two largest utilities pledged Thursday to spend a combined $10 billion during the next five years on in-state services and raw materials for their operations.
The chief executives of DTE Energy and Consumers Energy said they would each expand their existing in-state business-to-business transactions to a minimum of $1 billion annually.
The two utility companies announced the commitment Thursday with Gov. Rick Snyder at a state conference of the Small Business Association of Michigan’s members in Lansing.
Since 2011, the utility companies have been steadily increasing their in-state purchasing from smaller Michigan businesses through the Michigan Economic Development Corp.’s Pure Michigan Business Connect program.
The state program helps pair Michigan companies in need of services and supplies with in-state businesses, Snyder said.
“It can be hard for small businesses to navigate around a multibillion-dollar corporation,” DTE Energy CEO Gerry Anderson said. “They just don’t know how to get in.”
Consumers Energy CEO John Russell said the Jackson-based utility is spending about $500 million annually with Michigan-based companies, keeping jobs and tax revenue in the state.
In 2011, Detroit-based DTE Energy was spending $475 million annually on goods and services from Michigan companies, Anderson said.
Anderson said he gave the company’s purchasing division two stipulations for increasing contracts with Michigan companies instead of out-of-state firms.
“We gave them some boundaries: you can’t give up on cost, you can’t give up on quality,” Anderson said.
Last year, DTE Energy did $922 million in transactions with in-state firms on everything from constructing wind turbines to reading electric and gas meters, Anderson said.
Anderson said one of the companies that has benefited from DTE Energy’s focus on hiring Michigan-based contractors is Utility Resource Group in Sterling Heights.
Seven years ago, the company had eight employees that primarily worked on a contract with the Comcast cable company locating underground utility lines, said Vincent M. Floyd, president and founder of the company.
After landing a contract with DTE five years ago servicing the Thumb region, the company has grown to 450 employees, 370 of which are in Michigan, Floyd said.
In addition to locating underground utility lines, URG now installs and reads meters for DTE and surveys for gas line leaks, he said.
Floyd credits the MEDC program with helping his company grow.
“It gives you the opportunity to get in front of these bigger companies,” Floyd said. “There’s a lot of door you’ve got to go through. These doors were opened through this program.”