Ann Arbor voters will decide this November whether to create a new municipal electric utility, paving the way for the replacement of DTE Energy as the city's electricity provider.
The nonprofit group Ann Arbor for Public Power led the initiative, gathering more than 5,000 signatures on a petition to amend the city charter. Ann Arbor city clerk Jacqueline Beaudry confirmed via email Thursday that the petition had been certified and will appear on the November 3 midterm election ballot.
Municipal utilities are owned and operated by local authorities and tend to have lower rates and better reliability scores and are structurally more accountable to customers, according to the American Public Power Association.
What could a public power transition look like?
Most communities in Michigan get their electricity from investor-owned utilities like DTE and Consumers Energy. They are privately-owned but their rates are regulated by the Michigan Public Service Commission.
A much smaller number of Michigan communities are served by municipal utilities owned by local governments. Prominent examples include the Lansing Board of Water & Light, Traverse City Light & Power, and the Holland Board of Public Works.
Ann Arbor for Public Power’s initiative comes amid growing concern over high energy costs and the lower-than-ideal reliability of DTE’s grid.
DTE spokesperson Ryan Lowry said the company is making improvements to its infrastructure.
“Last year, DTE delivered the best electric reliability Ann Arbor has experienced in nearly 30 years,” Lowry wrote. “It’s proof that DTE’s five-year, $270 million plan to modernize Ann Arbor’s electric system is working. We will remain focused on our work and will continue to deliver the reliable, affordable, clean energy future Ann Arbor deserves.”
He also wrote that the Ann Arbor proposal would increase costs for consumers.
“The proposal to take over Ann Arbor’s electric grid will cost the City of Ann Arbor nearly $1 billion on day one, leading to skyrocketing costs for Ann Arbor businesses and residents,” Lowry wrote.
The public power group’s proposed amendment would establish a framework and election process for a public utility board by 2028. The board would handle planning, oversight, and feasibility studies regarding the city's energy future.
Justin Schott is the director of the Energy Equity Project at the University of Michigan. He said approving the city charter amendment is a preliminary step and that city-owned power would require further public engagement.
“These early steps, things like establishing an unpaid governance board conducting a deeper feasibility study, are the kind of small actions that give the city more leverage in its whole relationship with DTE,” Schott said. “We don't really have anything to lose at this stage.”
Although the board would not be authorized to do so without a public vote, it would eventually need to purchase DTE Energy’s local poles, wires, and infrastructure to begin municipalization.
Erik Nordman, the director of the Institute of Public Utilities at Michigan State University, said it is hard to predict how those negotiations would play out.
“If DTE sells that capital – the source of their profits – to the municipality, then DTE has less capital available on which their shareholders can earn a profit,” Nordman said. “So, they're probably not going to be excited about this proposal, and they'll want to make sure that they get a good price for the capital that they would be selling.”
Nordman also said a municipal utility would give local residents more power over the speed of the city’s transition to renewable energy. The city currently plans to achieve carbon neutrality by 2030.
"It's an opportunity for self-governance and that's going to be especially – not going to be, it is – really important as we are undergoing an energy transition away from fossil fuels and the pollution that they produce and towards a clean energy system. I think that will be especially important to the people of Ann Arbor.”
The city currently offers the Sustainable Energy Utility, a city-owned clean energy service that residents can opt in to. It provides supplemental renewable power — such as rooftop solar, battery storage, and geothermal systems — while users stay connected to the DTE grid.
Brian Geiringer, the executive director of Ann Arbor for Public Power, said 120 volunteers gathered more than 5,300 signatures to get the proposal on the ballot.
“There’s a lot of energy right now for everyday people wanting to help — in small or big ways — help make real change,” Geiringer said. “With DTE, it's something that is tangible, in your face. Your power goes out, you get your power bill and it is way too much, and you want to do something about it.”
DTE has contributed funding to the Ann Arbor Responsible Energy Coalition, an organization opposing the ballot measure, campaign finance disclosures show. Michigan Campaign Finance Network Executive Director Neil Thanedar told MLive the amount of the utility's spending on the city-level issue is "pretty unprecedented."
Editor's note: DTE is among Michigan Public's corporate sponsors.
