For more than 150 years, DTE Energy has generated energy for the state of Michigan, and now serves 3.5 million customers. DTE Energy, a private company, supplies energy to the people of Ann Arbor as well as the University of Michigan. However, recently DTE has been leaving their customers “in the dark,” with over 158,000 customers left without power in August 2021. Michigan is the fourth-worst state in the United States when it comes to average time to restore power to a customer after an outage. These paying customers are tired of this monopoly company with a lack of reliability and clean energy generation. While DTE has made promises to reduce greenhouse gas emissions, there is no competition holding them accountable. DTE has promised to reach net zero carbon emissions by 2050, but this will also increase rates for customers by $3.18 per month. Michigan also performs below average compared to the rest of the United States when it comes to reliability, affordability and environmental impacts. Due to these issues, many have proposed a municipalization of energy production in Ann Arbor to create a community-owned utility.
Municipalization is the transfer of all the assets of a privately owned company to a public institution. One of the most pivotal benefits of such a change would be reliability. Such a switch to public ownership might lead to quicker response time during emergencies as the utility is in local hands. Furthermore, publicly owned institutions are not profit driven, their central focus is instead on catering to the citizens of Ann Arbor by making the utility more affordable. Public power also involves citizens in the decision making process, which would represent a significant step towards helping the people of Ann Arbor reach their goal of clean power — one that they have been crying out for. A switch to public power might also prompt long-term thinking regarding more sustainable forms of generating energy; this is something a private firm — under pressure to deliver short-term profits and keep shareholders happy — might not find the time and resources to do.
In light of this push, as well as the issues with DTE that precipitated it, the Ann Arbor City Council voted on Jan. 18 to begin a study into the effectiveness and feasibility of a municipal electricity program. Although the aforementioned benefits of public power would seem to suggest that such a study would simply be a delay — if public power is such an unalloyed good and so necessary to fight climate change, we should be willing to spend large sums of money on it — there is not a consensus on whether or not it would actually be the right thing to do. While DTE has unsurprisingly come out against the proposal, opposition, or at least apprehensiveness, is not limited to those with a direct interest in seeing the project fail. The City Council resolution to create this study had been debated since last September, with some members pushing for a more extensive survey given their concerns.
Why do some people still doubt the proposal? The truth is, municipalization is hard, with the last successful municipalization project in Michigan dating back to 1912. Creating a public utility is an extensive, difficult process that requires support and commitment from the community. Not all municipalities are successful, for reasons ranging from political battles to a lack of momentum required to complete such a long and arduous process. In the case of Ann Arbor, there is also the issue of having to buy out DTE’s existing infrastructure, an expensive purchase, considering the breadth of infrastructure and investment present, that will be an early and significant roadblock if the municipalization were to go ahead.
But Ann Arbor is different. The large public university that lies within it can facilitate the steps that need to be taken. Someone must “spearhead” the development of this utility by promoting the concept to the community, discussing with the local government and handling legal aspects, and the University of Michigan is an institution large enough to do so if they wished. Not only does the University have a considerable influence on the Ann Arbor community, they are also the largest consumers of power in the city, which would make any public backing of the municipalization on their end a game-changer. Over and above providing some much-needed resources for the process, they might also be able to play a key role in helping build the aforementioned sustainable power system. There is precedent for such a concept. A glance at East Lansing yields a prime example — Michigan State University’s T.B. Simon Power Plant. Moreover, the University of Michigan has already shown signs that it is willing to move away from carbon-based energy sources.In 2019, the U-M campus consumed a total of 6,924,524 MMbtu, which was primarily generated through cogenerated steam and natural gas combustion. The University has switched a portion of its own energy usage away from DTE into its own production because of the unsustainable practices of DTE. Supporting a transition away from purchasing DTE Energy would illustrate to the public that the University views sustainability as a priority to combat climate change. In the past, the University has been unable to take a larger step due to lack of funding and incentives, but a partnership between Ann Arbor citizens and the University could prevent this. The University is a consistent and organized presence in the city, as opposed to the student body, which undergoes massive turnover every four years. They should take an active role in energy production and distribution in Ann Arbor, as that is key to the environmental goals it claims to back.