Ann Arbor for Public Power hit a delay in its mission to sever the city’s relationship with DTE Energy, February 18. The Ann Arbor City Council voted to delay two decisions. The first was a proposal for a $1,728,000 study to go into the practicalities and cost of what it would take to actually do that and present a plan to voters in the next election.
So, what was the problem? Mayor Christopher Taylor, a Democrat, explained from the dais that he was contacted by the contractor slated to conduct the study, NewGen, who is slatted to provide an independent assessment of the feasibility of A2 breaking things off with DTE Energy.
“They’ve done so in order to enable one of their subcontractors to avoid a recently discovered potential conflict of interest. NewGen has expressed confidence that this matter can be resolved shortly and amicably,” was the way that Taylor explained it to Council. “In that light, I would like to entertain a motion to postpone this matter until our next meeting.”
The Council voted unanimously in favor of the delay. Taylor did not elaborate on what the contractor’s conflict of issue actually was or how they were planning on rectifying it.
The second resolution would authorize city staff to begin work on potential ballot proposal language to present to voters. Delaying the first resolution meant that they had to postpone it to, which the Council also unanimously did.
NewGen Strategies and Solutions is a utility consulting firm headquartered in Richardson, Texas, with an office in Lapeer, Michigan.
Landscape of the debate
Ann Arbor is a town almost entirely by and for tree huggers, and many are proud of it. Ann Arbor voters passed an A2ZERO plan years ago to commit the city to being carbon neutral by 2030, and voters overwhelmingly approved a sustainable energy utility last November by a nearly three to one margin.
But this has put a lot of Ann Arborites at odds with its for-profit regional utility, whose plans to decarbonize their electricity production by 2050 is 20 years too slow for Ann Arbor for Public Power – a grassroots organization advocating for a 100% green power grid and the total severance of ties with DTE Energy in favor of a power system totally owned and run by Ann Arbor’s municipal government, and therefore accountable through the mayor and city council to voters. They also take issue with how DTE Energy plans to get there – notably through the use of fracking and natural gas – as well as the speed, and the very notion that publicly supplied electricity should come from a for profit near monopoly that they feel is loyal only to their Wall Street shareholders.
“I had heard of the delay a few days prior [to the Tuesday meeting] …,” A2P2 President Greg Woodring told Current by phone the following morning. While Woodring thought this delay was innocent on its face, he did add that “DTE is doing everything it can to slow this down. They’ve picked up their messaging in recent days.”
The Council voted unanimously to delay both options, but this, again, is a delay. Publicly operated grids are a legally plausible alternative to a regional giant. Nearby Chelsea has one. But making one would require the City to negotiate the purchase of these privately owned assets, meaning years of litigation.
RELATED: Municipal Power, SEU or DTE? Which Option Can Get Ann Arbor to Carbon Neutrality Fastest?
Several speakers at Tuesday’s public comment meeting accused DTE Energy of spreading misleading information designed to scare voters on what municipalization would actually mean. A2P2 also regularly takes DTE Energy to task over power reliability issues. Current has reached out to Mayor Taylor regarding these accusation
“Needless to say, this barrage of propaganda by DTE would not be necessary if they were indeed the reliable, fiscally responsible, renewable energy providers they claim to be. I am sure that you have all received communications from constituents worried about the $1.7 million price tag of the second feasibility study. Some of you have even questioned your entire stance on public power because of that price tag. But it is your job to be a steward of the truth. The truth is that the price tag is high, but the truth is also that if this study doesn’t happen now, it could cause a two year delay [for] public power in Ann Arbor and in those two years Ann Arborites will pay,” multiple times the cost of the study just in DTE Energy shareholder dividends, A2P2 Executive Director Brian Geiringer said to the Council on the cost issue, Tuesday evening. “The truth is that every single public electric utility in Michigan pays lower rates than DTE. It is your job to make sure your constituents know the entire picture here and not just one price tag. I think the truth is that Ann Arbor is ready for public power and Ann Arbor will make public power happen.”
When asked if this is what DTE is doing, DTE Energy spokesperson Jill M Wilmon said: “The simple answer is no. DTE is not misleading” the public.
Impacts of federal funding fight on Ann Arbor
Funding in general seemed to make the council nervous. The Trump Administration has taken to gutting of federal employees and scientists across agencies, including that of scientists focusing on monitoring and fighting the climate crisis.
Multiple civil rights organizations, legal groups and states attorneys-general are suing the new administration on the constitutionality of Trump unilaterally stopping spending he and his party doesn’t like, via a far right political theory called the unitary executive theory on the basis on that Congress, not the executive, has the power to decide what federal funding goes to what. But even as that constitutional matter is tied up in the courts, Councilors were hesitant to go forward at this time given the uncertainty of how things will play out politically and judicially.
“I do think it is fortuitous that this is being postponed. I was prepared to vote in favor of this the last time this came to us [but] we needed to postpone because there was not yet community support for this proposal. I think it is incumbent on us to recognize that the environment has shifted – we are not dealing with business as usual from the federal government. This administration is not following past playbooks, and we don’t know what the implications are going to be on our community,” Councilor Erica Briggs (Democrat – Ward 5) said, Tuesday evening. “What we do know is that this administration is going after the most vulnerable in our community, and it is going after our priorities – climate – so many more things. But the implications for our budget are still unknown … and so I think that having a bit of time to be able to contemplate and see what that horizon might look like is helpful for us, because I think what we are hearing from advocates is that its kind of a forgone decision, that when we receive this report, there’s a desire to go to the voters regardless of what it says. I think that if we want to make sure that if we have a phase two study that we’re prepared to act on that – and that we have the ability to.”
Nobody at the Council meeting argued against sustainable energy or questioned the scientific reality of climate change. But not everyone is on board for municipalization in Ann Arbor, however.
“I stand to make two key points. One is support of seeking independent procurement of professional advice to assess our community’s position regarding sustainable energy. Second, a measured and cautious concern for prematurely preparing a ballot initiative for municipalization before we fully understand the fact and recommendations from said consultants that we plan on hiring,” said Dr. Kevin Bohnsack. While generally supportive of climate change fighting initiatives, Bohnsack questioned the need for municipalization and pointed out that even if it does pass, it will take years of litigation and millions to purchase the assets within Ann Arbor, which will then need to actually build its own green power infrastructure at the further expense of Ann Arbor taxpayers. He also listed the number of failed municipalization rates nationwide over the years. “Our community is ready to further explore and support sustainable energy options. In fact, we’re already doing it – we share a commitment to environmental awareness, stewardship an equity, particularly due to the observable impacts of climate change. The successful establishment of an opt-in SEU demonstrates our values. However, my concern is that we’re already shooting towards municipalization without adequately assessing the landscape.”
Facts and figures
DTE Energy is against municipalization, arguing that their economies of scale and institutional knowledge will always provide the best possible cost for users. A2P2 points to the rates being paid by Chelsea residents as proof that municipalization would actually cost Ann Arbor residents and businesses less.
Chelsea residents are paying 8.484 cents per kilowatt hour last year according to the 2024-2025 service charge schedule. DTE Energy basic rates range between peak and off peak hours, and by season, and type of usage, but range for residences from between 1.438 cents and 12.201 cents per kilowatt hour.
“DTE Energy is committed to delivering a reliable, affordable and clean energy future for Ann Arbor. We are investing $250 million in infrastructure improvements in the city over the next five years, dramatically improving reliability,” Matthew Paul, President and COO of DTE Electric, wrote in an emailed statement to Current. “We’re also working to provide 60% of Ann Arbor’s electricity from DTE’s Michigan-made wind parks and solar farms by 2030, helping Ann Arbor to meet its clean energy goals. DTE also is focused on customer affordability, keeping energy bills below the national average, even as we continue to invest to deliver improved reliable power and cleaner energy for our customers across the state.”
Paul cited a separate study by Charles River Associates, a publicly traded, Boston-based firm, which consults economic and financial matters for large companies and government agencies, which estimates the cost of municipalization past the two billion dollar mark over the next 20 years. But as the study itself discloses at its conclusion, “the study was commissioned by DTE Energy.”
“The recurring pattern is that cities go ahead and study these things, and cases they move forward with a legal process of some kind, and then at some point it gets abandoned. I believe it gets abandoned because it just doesn’t pencil out. The numbers required to municipalize an electric system are simply too expensive. The upshot of that from the costs of the legal process is: I’m not sure that everyone abandons that process at the same time, so part of the question of how much will legal and advisor fees be, is part of the question: how long will the city take before coming to the realization that it’s not going to work?” CRA Vice-President Matt DeCourcey said. When asked about assertions of the reliability of CRA’s findings, DeCourcey said “I disagree” and he said that they relied on open data like ”market energy prices” to come to their conclusions.
A2P2 has called the study deliberately misleading and claims that DTE Energy’s attempts at community outreach amounted to scare tactics to defeat municipalization. DTE Energy is yet to respond to Current’s request to comment on that question specifically.
“The only thing more expensive is not doing it,” Woodring said, who added that the difference between staying with DTE Energy and going forward with the municipalization effort can be thought of as “the difference between renting and buying.”
Whether Ann Arbor will ultimately get to its 100% green power goals within five years with municipalization remains to be seen. City Council is expected to take up the matter again at the March 3 meeting. You can attend that meeting either in person at 301 East Huron Street, or via YouTube.
At least one A2P2 supporter, Sydney Olthoff, expressed frustration with Democratic Party inaction since November. On SEU she said “my generation frankly doesn’t have the time to wait for [the] rich homeowners of Ann Arbor to grace us with their purchase of solar panels with SEU. We need to commit to democratically controlled climate action now.”
Drew Saunders is a freelance business and environmental journalist who grew up just outside of Ann Arbor. He covers local business developments, embraces his foodie side with reviews restaurants, obsesses over Michigan's environmental state, loves movies, and feels spoiled by the music he gets to review for Ann Arbor!
