Opinion: DTE’s energy plan too flawed for approval
Earlier this year DTE Energy filed its Integrated Resource Plan (IRP), as required by state law. The IRP outlines how the utility company will meet energy demands in the future and is an opportunity for energy utilities to integrate clean energy innovation and plan for changes in technology and energy demands.
Unfortunately, instead of embracing the promise of low-cost renewables and eliminating energy waste, DTE submitted a plan that was riddled with flaws biasing the outcome toward more natural gas and higher costs for its residential customers.
Throughout its IRP, DTE manually selected the electricity generation sources it wanted. This method prejudiced the outcome toward the results the company wanted. In its IRP, DTE arbitrarily kept its Belle River and Monroe coal plants online through 2030 and 2040 without a sound analysis of early retirement options or lower-cost alternatives. Both Belle River and Monroe are expensive coal plants to run. Retiring them earlier and replacing them with affordable, renewable energy would mean large cost savings for customers and the elimination of extremely harmful air pollution and greenhouse gas emissions.
DTE also selected four potential long-term pathways — two of which included building a new gas plant — through an unknown decision-making process instead of allowing an optimized model to direct the outcome of DTE’s long-term plan. Sound IRP analysis conducted by other energy utilities allows the modeling to find cost-effective paths forward instead of forcing the model to produce specific results.
The cheapest energy is the energy we don’t use. Energy waste reduction, when optimized and maximized, saves all Michiganians money on their energy bills by avoiding the need to build expensive new power plants.
But DTE’s analysis gave energy waste reduction short shrift. DTE overstated how much energy waste reduction it was achieving and failed to fully account for all the long-term savings achieved through increased energy waste reduction. These errors allowed the company to propose achieving only 1.75% annual energy waste reduction, whereas companies like Consumers Energy are working toward 2% annual savings.
DTE also overstated the cost of renewable energy. To get the best data on current market prices for renewables, DTE should have put out a request for proposals prior to filing its IRP and used real-life data to inform its cost assumptions for new wind and solar projects. This practice is called for in our state law and is becoming standard industry practice as the costs for renewables continue to decline.
All of these errors result in an energy plan leading to higher costs for residential customers, negative and unnecessary impacts on public health, and missed opportunities to mitigate climate change.
This is not the first time DTE Energy has submitted a flawed plan to state decision-makers. In 2017, DTE asked for approval to build a $1 billion gas plant and submitted a plan the Commission said "gave the impression that modeling results were steered or forced into a pre-determined result." While the Commission ultimately granted approval for the gas plant, over the objections of consumer protection and environmental groups, it strongly rebuked and admonished DTE for the errors and bias of its analysis. The Commission called on DTE in its IRP to fix these errors. And yet, the flawed IRP filed recently by DTE shows they did not learn the lesson.
I am reminded of the “If You Give a Mouse a Cookie” children’s story. DTE is now coming back and asking for the glass of milk. The Commission should change course and deny approval of DTE’s flawed IRP. DTE should be required to come back with an IRP rectifying all the errors and fully considering clean, affordable energy.
Michigan Environmental Council gets involved in cases at the Michigan Public Service Commission, like DTE’s IRP, to protect Michigan’s environment and the pocketbooks of Michigan’s residential ratepayers. We encourage all Michiganians to learn more about the benefits of clean energy and to stay informed about how DTE’s IRP will affect them, the health of their families, their wallets and the environment.
Charlotte Jameson is energy policy and legislative affairs director at the Michigan Environmental Council.