Advanced Energy United and Michigan EIBC Welcome Michigan Public Service Commission Affordability Focus

Legislature should enact legislation and provide relief to customers struggling with energy costs

Lansing, MI–On Monday, August 10, the Michigan Public Service Commission (MPSC) released legislative recommendations that would provide real utility bill relief for customers. The recommendations follow a request from Governor Gretchen Whitmer to identify substantive steps to make energy more affordable.  

 “The MPSC’s legislative recommendations represent some of the critical tools available to policymakers to lower energy bills and make efficient use of customers’ dollars. We applaud the commission for putting forward durable solutions to affordability at a time when households are struggling with rising costs across the board. It puts both utilities and lawmakers on notice that we must change the way utilities make profit toward regulation that deploys more advanced energy solutions and encourages market competition,” said Advanced Energy United Michigan Policy Lead Samarth Medakkar.  

“Michigan EIBC has been working on legislation for years to increase competition, lower costs, and enable customers to provide the clean energy resources that our state needs,” said Michigan Energy Innovation Business Council President Dr. Laura Sherman. “We appreciate the commission’s attention to these issues and focus on solutions that will reduce energy bills for Michiganders. It’s critical that we continue to make progress within the existing regulatory framework and move these innovative solutions forward at the legislature in the coming months.” 

Michigan utility costs have risen because of infrastructure repairs and upgrades, utility capital biases, rising energy demand, and extreme weather. Consumers Energy received a $276.6 million rate hike in March and then asked for another $456 million in June. DTE Energy received a $242.4 million increase in February and then sought an additional rate hike of $474 million in April.  

This is why Advanced Energy United and the Michigan Energy Innovation Business Council (Michigan EIBC) welcome the recommendations, which provide actionable steps that would disrupt the current cycle of increasing prices and provide a path to achieve a more efficient energy system. Among the recommendations are:  

1. Performance-based ratemaking: Connect utility earnings with affordability and reliability outcomes, while establishing a multi-year rate plan structure to eliminate the cycle of annual rate increase requests.  
2. Focus on advanced transmission technologies and enhanced transmission planning to lower the cost of transmission development and cost-effectively align generation planning with transmission planning.  
3. Improve rate design to better manage expensive peak demand (the periods when energy demand is greatest like hot summer afternoons) and emphasize the importance of flexibility in energy consumption.  
4. Expand access to distributed energy resources, such as rooftop solar paired with storage, and protect energy waste reduction programs.  
5. Open more cost-effective pathways to create virtual power plant programs (VPPs). VPPs are a low-cost supply and demand side energy solution that allow customers to participate in the energy market.
6. Help the state get more out of the existing grid by developing distribution utilization metrics.  
7. Make the energy supply market more competitive by improving market-access for cost-effective projects not owned by utilities and reforming utility incentives to drive down costs for customers.