A screenshot of the City Council live stream.
Courtesy of Ann Arbor City Council

Ann Arbor City Council convened at Larcom City Hall Tuesday night for a work session to discuss the study recently released by a team led by 5 Lakes Energy on ways the city of Ann Arbor can meet its 100% renewable energy goal. The recent study comes after the council requested a feasibility study last September to study different options to make the city’s energy source 100% sustainable by 2030. The council aimed to examine energy options in line with the A2Zero goal to make the city carbon-neutral by that time.

Currently, over 90% of the energy supplied by the city’s utility provider, DTE, comes from non-renewable sources. The study analyzed several pathways to the city’s carbon neutrality goal. The first route identified is purchasing renewable energy credits. Renewable energy credits are awarded to energy utilities based on renewable energy generated and can either be sold on the national market or directly to energy consumers through power purchase agreements. The second option identified in the study is creating a sustainable energy utility, an array of locally installed solar panels connected through microgrids, which would serve as a supplemental energy provider to its subscribers in addition to DTE. The final option the study outlined is municipal energy utility, which would require the city to purchase DTE infrastructures in Ann Arbor so that the city could make decisions about energy upgrades and where to source its energy.

The meeting began with a hearing on a separate report from American Pulse pollster Dustin Olson, which surveyed Ann Arbor residents’ expectations for renewable energy use. The report found that resilience, reliability and cost are the top three priorities residents identified.

Douglas Jester, managing partner at 5 Lakes Energy, the consulting firm contracted to do the prior feasibility study, presented the findings on renewable energy solutions from the new report. Jester said while federal policies like the Inflation Reduction Act would encourage more private and voluntary solar installment, the city should also take an active role in other renewable energy measures, such as purchasing renewable energy credits and establishing a sustainable energy utility. 

“The city could take on additional steps to fill in that gap mostly by acquiring renewable energy credits from either the national market or power purchase agreements,” Jester said. “Pursuing the supplemental energy utility or sustainable energy utility leads to greater adoption of solar and a lesser need for the other kinds of measures.”

The recent report also found that if the city pursues MEU, the initial cost and risk could be high because the city would need to compensate DTE for its assets and could face escalating litigation costs. However, the report also suggested that municipal rates over the long run could be more favorable than DTE rates, while the eventual cost would be variable as the city hopes to improve the reliability and sustainability of the current energy system. Jester said the city should decouple its pursuit for public power from its carbon neutrality goal, as a public-owned utility might not materialize before 2030.

“The key thing here is really that we don’t see a plausible path by which you achieve this whole utility by 2030 in order to embed your accomplishment of 100% renewables in the municipal utility,” Jester said. 

The report advised that the city involve current contractors to develop a phase two study on public power options to more accurately estimate the price tag for full municipalization. 

Ann Arbor mayor Christopher Taylor asked if the phase two study would include cost estimates for the city to upgrade DTE infrastructure to make it more reliable. DTE power outages have become common in Ann Arbor following extreme weather events like ice storms. He also asked if the consultant would estimate the cost of increasing the capacity of the system in anticipation of a growing population. Scott Burnham, business development lead of NewGen Strategies & Solutions, another contractor in the energy study, said estimating the upgrade cost would fall beyond their capacity and he expected the phase two study to primarily focus on reducing the uncertainty of previous estimates.

“What I was envisioning was really just more fieldwork in terms of understanding the (DTE) assets that are out there in the field,” Burnham said. “It would not include (the cost of) increasing reliability.”

Dozens of participants from Ann Arbor for Public Power, a local advocacy group campaigning for MEU, attended the meeting. During the public speaking portion, many speakers expressed concerns about relying on purchasing renewable energy credits to achieve the city’s sustainability goals. A2P2 president Greg Woodring said renewable energy credits do not necessarily come from renewable energy generation from the city’s own utility provider because they are simply offset by purchasing carbon credits and, therefore, it shouldn’t be counted as a renewable energy source for the city’s energy supply.

“Renewable energy credits are not the same thing as using renewable power,” Woodring said. “We would be locking in (a) DTE dirty generation if we were to just continue to buy renewable energy credits.”

In an interview with The Michigan Daily after the meeting, Woodring said while he disagreed with some of the consultant’s suggestions, he thought the report was encouraging overall.

“There are limitations to the report caused by the contractors making the decision that municipalization is unlikely by 2030, which we believe may or may not be true,” Woodring said. “We think that the faster we start working on municipalization, the more likely it is that we’re going to reach it by 2030.”

Lilah Woolard, A2P2 participant and eighth-grade student, told The Daily after the meeting they are anxious about climate change and they hoped the city could shift away from private utility to achieve carbon neutrality.

“As someone who’s going to have to live affected by the climate action that our government officials are taking in the next few years, I don’t like that a private company is doing a public service,” Woolard said. “I think that it’s wrong that (DTE has) a monopoly on our energy and I think that it just doesn’t feel right that we want changes, but they don’t have to make the changes.”

Daily Staff Reporter Chen Lyu can be reached at lyuch@umich.edu.