Long-term Plan Cuts Consumers Energy’s Carbon Emissions 90% By 2040

On June 7, the Michigan Public Service Commission approved Consumers Energy’s Integrated Resource Plan. The first long-term utility plan to be approved under new state law, it sets Michigan’s second largest power provider on track for bold progress toward clean, fossil fuel-free electricity production and efficient usage.

“The plan is really groundbreaking in the shift it makes toward renewables and efficiency,” says Ecology Center Climate and Energy Director Charles Griffith. “We’ll should see lots of investments in both over the next decade as Consumers not only retires more of its coal plants, but also avoids risky investments in natural gas.”

Bipartisan legislation passed in 2016 now requires each of Michigan’s major energy providers to comprehensively forecast their customers’ needs for the next 15 to 20 years and to document how they plan to meet those needs in the most “reasonable and prudent” way. These strategic proposals, called Integrated Resource Plans (or IRPs), need to demonstrate cost effectiveness and reliability, meet environmental standards, and account for multiple possible futures--not just “business as usual” conditions, but also scenarios where, say, fossil fuel prices rise dramatically. The plans must be revisited and revised at a minimum every five years.

In other words: the utility companies aren’t allowed to make major investments without thoroughly considering the big picture. And, they have to get community input in the process. Through the Michigan Public Service Commission (MPSC), the state also has to agree that the strategic plan benefits ordinary citizens and customers, not just utility company shareholders.

Consumers Energy’s praiseworthy IRP takes the environmental impact of carbon emissions and pollution seriously, making commitments to clean energy that well exceed the modest environmental expectations of Michigan state law. The plan aims to help Consumers’ cut carbon emissions 90% by 2040 and to completely eliminate fossil fuels from their power supply generation portfolio by that date. This is a massive shift, even for a utility that already has a reputation for better environmental policies than its other major counterpart in the state: Consumers currently generates 60% of its electricity from coal and natural gas.

To meet these ambitious goals, Consumers Energy will phase out all coal plants, possibly as early as 2025 and no later than 2040. It has committed to replace them with clean energy resources, including a massive 6,000 megawatt investment in solar power. It will also strive to reduce energy waste by 1,369 megawatts through significant energy efficiency investments and demand response pricing programs that shave energy use at peak times. Together, the solar and efficiency programs will create and save as much electricity as Consumers delivers in total today.

The solar investment is particularly groundbreaking. “It's exciting to see Consumers Energy helping lead the nation in its recognition that solar and clean energy is cost-effective, reliable, and the right path forward for Michigan," says Will Kenworthy, Midwest Regulatory Director for Vote Solar. "Their decision to commit to 6,000 MW of new solar is by far the largest single utility commitment in the Midwest and will put Consumers in the top-tier of utilities nationwide serving their customers with clean, affordable solar energy.”

Consumers Energy President and CEO Patti Poppe says the company "is proud to take a stand” with a plan rooted in a “Triple Bottom Line strategy - making a commitment to people, the planet and Michigan's prosperity."

It’s been a long road to approval, and environmental and clean energy advocates have worked hard since Consumers Energy filed their original proposal in June 2018 to make the final plan as good as it is. With our allies, the Ecology Center pushed Consumers Energy on a number of  improvements before ultimately supporting the final proposal in legal proceedings. Other advocacy groups joining us in supporting the settlement agreement include the Environmental Law and Policy Center, Union of Concerned Scientists, Vote Solar, Michigan Environmental Council, Natural Resources Defense Council, Sierra Club, and the Great Lakes Renewable Energy Association.

A notable change in the final proposal holds Consumers accountable to conduct competitive bidding for all new power generation capacity they source, including a 50-50 split of utility and third-party financing to meet their ambitious solar goal by 2030. This model will help prevent Consumers from using its monopoly power to set the price of solar higher than necessary. Energy customers will benefit from the competitive rate, and so will the planet: cheaper clean power makes a more attractive investment over more expensive, fossil-based alternatives, even for folks who don’t care about our environment. As part of the settlement, Consumers also agreed to study a possible speedier retirement of two of its remaining coal units, further reducing its use of the more polluting fuel.

Here at the Ecology Center, we’re excited about the finalization of Consumers Energy’s IRP, which Consumers has rolled out to the public as its Clean Energy Plan. It deserves that name. The plan foregrounds strategies and priorities that align with our clean energy agenda, and we plan to use the Consumers’ agreement as a tone-setting model for clean energy planning elsewhere in the state. 

For example, Michigan’s largest utility, DTE Energy, has recently proposed its own IRP, and its plan is not nearly as good for people or the planet. While the plan does include more coal plant phase-outs and renewable investments, those plans are delayed and tentative. DTE doesn’t plan on expanding solar power until 2025, and its efficiency programs are far less ambitious. Several coal plant operations are still slated to chug along until 2030 and 2040. And, glaringly, DTE’s plan doesn’t yet commit to replacing retired coal plants with non-fossil fuel options.

Last August, DTE broke ground on a poorly planned, expensive, and massive new natural gas plant in East China Township. The $1 billion plant represents an improvement over coal in the short term, but it’s a huge mistake as a long-term investment--and in fact, the proposal squeaked by just before the new state IRP rules came into effect. We don’t want to see another gas plant built that will burden customers with unnecessary pollution and expense for half a century to come. We need your help to keep that from happening: tell the Michigan Public Service Commission to hold DTE Energy to a higher standard?

Talking points for commenting to MPSC.

Published on June 27, 2019