Michigan residents spend a greater proportion of their income on energy bills than much of the rest of the United States.
That’s especially true in Detroit where Black households have a 54% higher energy burden (proportion of income spent on energy bills) than white households, and low-income households nearly four times as much as other households.
Under a new settlement agreement signed Tuesday that will go to the Michigan Public Service Commission for final approval, DTE will take stronger steps to address energy waste in energy-burdened communities like Detroit.
“DTE continues to develop and evolve its energy efficiency offerings so all our customers can benefit from engaging in our programs and rebates that deliver energy saving customers see on their bill,” Carmen Welch, director of energy efficiency programs at DTE, said in an email statement. Welch noted that DTE was ranked fifth in the nation by the American Council for an Energy-Efficient Economy in its August Utility Energy Efficiency Scorecard.
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The agreement came in a filing under a 2008 law that requires investor-owned utilities like DTE to file an energy waste reduction plan every two years with state regulators. The plan details how DTE will allocate resources to energy efficiency, or energy waste reduction, which results in both cost savings for customers and climate benefits.
Michigan residents save nearly $3 for every $1 spent on energy efficiency, according to the MPSC, which regulates utilities. Projections estimate that energy efficiency could eliminate 12% of annual greenhouse gas emissions from energy compared to 2017 levels.
The settlement with environmental lawyers and advocates requires DTE to double its funding on energy efficiency programs in low-income neighborhoods, implement metrics and tracking to increase the transparency of its energy waste reduction programs and improve the income-qualified multifamily energy waste reduction program such as a better rebate program. DTE must also double its funding for health and safety fixes before a house is weatherized, such as removing hazardous insulation.
The investments in health and safety have already been successful, the Ecology Center’s policy director Alexis Blizman said in a press release.
“These additional measures have allowed homes that have had energy efficiency deferrals in the past to make the necessary repairs that ensure that the homes most in need of energy waste reduction are now eligible,” she said.
During the last round of negotiations under this program in 2022, advocates pushed DTE to create a program to increase energy efficiency programs in low-income neighborhoods with higher energy bills, which the company did. But this year the utility wanted to scrap the program, said Elena Saxonhouse, managing attorney for the Sierra Club.
“We have been pushing DTE to improve its low income energy efficiency programs for a number of years in these cases,” said Saxonhouse. “When DTE filed its plan this round they actually did not talk about continuing that program. They were talking about wrapping it up and kind of finishing out the spending that we had agreed to in the last settlement.”
DTE’s Welch disagreed, noting DTE’s funding for low-income customers has grown.
“DTE has grown to the highest level of funding for programs that serve our low-income customers reaching $63 million in funding in 2024, and $73 million in 2025,” Welch said by email. “When DTE developed its 2024 – ’25 energy efficiency plan, we made clear our plan to continue our work to engage our low-income customers in our programs, specifically stating the neighborhood approach initiative was successful and will continue.”
But the Sierra Club, along with the Natural Resources Defense Council (NRDC), Earthjustice, Ecology Center, and the National Housing Trust, negotiated for the program to stay – doubling the investment to $2 million.
The program identifies and prioritizes neighborhoods with the highest energy burden, for energy efficiency services.
Legislative changes are needed to ensure new provisions in the settlement can be a permanent part of utility programs, Blizman noted in the press release.
Last week the Michigan Senate passed a bill, SB 273, that would increase the energy waste reduction requirements for utilities’ electric generation from 1% to 1.5%. The settlement reached Tuesday, effective through 2025, would be unaffected by the bill as it would require a plan to be filed for implementation in 2026.
The settlement agreement must be approved by the MPSC before the agreement is final. The commission meets again Nov. 9.
“Energy efficiency is a critical and essential foundation to equitable climate solutions in Michigan,” Laura Goldberg, midwest director of energy equity and affordability at NRDC, said in a press release. “This agreement requires robust, deeper energy efficiency programs for the next two years, especially for under-resourced Michigan communities. Michigan still needs critical changes to its state-wide energy waste reduction legislation to ensure the long-term affordability and climate benefits of energy efficiency reach all Michiganders.”