DTE leader: Build Back Better could cut future bills, speed coal phaseout

DTE Energy Co.'s CEO on Thursday said passage of a $1.75 billion Build Back Better federal reconciliation package with incentives for renewable energy investments would help to save DTE electricity customers money and accelerate the retirement of coal plants.

How much customers could expect to save isn't yet certain as the bill hasn't passed either chamber of Congress, but savings the company obtains through tax credits for investments in solar power would be passed to ratepayers, CEO Jerry Norcia told the Detroit Economic Club. The Detroit-based utility serving most of Metro Detroit and the Thumb region plans to end its use of coal power by 2040, but it's looking to end more of that generation by the mid-2030s.

"We pass all of those tax benefits on to our customers in the form of lower rates for the same product," Norcia said during a luncheon held at the MotorCity Casino Hotel. "It is very beneficial to our customers, and it's beneficial to us because we get to invest in those products."

The legislation would provide tens of billions of dollars over the next decade for renewables such as wind and solar. It could help lower the upfront cost of greener energy and provide tax credit to encourage DTE and other energy suppliers to make such investments, alleviating those costs in the energy transition for  ratepayers, Norcia said.

Between 2021 and 2022, the utility is retiring about 20% of its coal power. Meanwhile, it's investing $3 billion into solar power over the next five years and has the new $1 billion Blue Water Energy Center natural-gas plant coming online next summer in St. Clair County. A recent test fire was successful, Norcia said.

He, however, emphasized customers wanting to reduce their carbon footprint can opt into its MIGreenPower subscription service and pay for up to 100% of their energy to come from renewable sources. The cost varies depending on market conditions, but on average for wind power, the cost is around 2 cents per kilowatt-hour and 3 cents per kilowatt-hour from half solar and half wind. The average Michigan household uses 676 kilowatt-hours per month, according to the U.S. Energy Information Administration.

"It's the right thing to do," said Jason Wize, 45, of Shelby Township, who is a MIGreenPower subscriber for 100% of his electricity. "It's a very small price to pay for helping the planet to be habitable by our children and grandchildren."

Decarbonization efforts go hand-in-hand with the auto industry's efforts to electrify vehicle lineups, Norcia said. Although Ford Motor Co. is opting to open a new electric-vehicle assembly plant and new battery manufacturing facilities in Tennessee and Kentucky, Norcia said DTE has been in "intense" discussion over the past several months with the state of Michigan and companies looking to open EV-related facilities here, though he declined to disclose them.

"Lots of conversation, lots of dialogue, and I'm confident that we're going to move this forward for the state," Norcia said. "There's a lot of collaboration between the people who want to do something here in Michigan and the state and the energy companies."

Ford cited inexpensive electricity prices in selecting the location of its new plants. In August, Michigan's 8.04 cents per kilowatt-hour average industrial electricity price was above the U.S. national average of 7.65 cents, according to the U.S. Energy Information Administration. But Norcia said Michigan and DTE can compete for those projects.

"We can compete with anybody on that type of system" that runs 24/7, Norcia said, noting there are economic development tools the utility can leverage in setting rates. "We can tailor the product to be as competitive as any other electric company in North America, so we're prepared to compete.

"Over the last 100 years, we've been here, and we've built and helped build lots of assembly plants and very competitive expansions at those assembly plants. We've been competitive in the past, and I can tell you with certainty, we will be competitive in the future."

Competitiveness also comes down to grid reliability. The utility shared a five-year, $7 billion plan for tree trimming and infrastructure events to prevent electricity shortages. It also includes a pilot study for burying power lines; about 30% of power lines are underground in DTE's service area. But 90% of power outages this summer resulted from trees and branches, which can be solved with increased trimming, Norcia said.

That was welcome news for Larry Wize, 74, of Troy: "Our power was out twice this summer. One was for more than two days."

Amid a surge in COVID-19 cases in Michigan, however, DTE also is seeking to increase employee vaccination rates. Although the Occupational Safety and Health Administration says it won't enforce its mandate that employees at businesses with 100 or more workers be vaccinated or get tested weekly while the rule is challenged in court, DTE last week began offering a $750 incentive to employees who have gotten the shot or will get it by Dec. 18. Ratepayers are not covering the costs of those payments, DTE spokeswoman Paula Silver said.

"It's a pretty unique way to move it, and it's starting to move already," Norcia said of his workforce's vaccine rate, but he declined to disclose what that is. "If you look at the state's vaccination rates, some are reflective of our employee vaccination. We wanted to get ahead of the surge and get as many people vaccinated as possible. 

"We provide an essential service to the community, and I want to make sure first and foremost that all our employees are healthy and that we can fulfill on our obligation to serve."

bnoble@detroitnews.com

Twitter: @BreanaCNoble