(The Center Square) – The Michigan Public Service Commission approved a settlement agreement for DTE Electric Co.’s integrated resource plan to provide steady electricity despite shutting down remaining coal-fired power plants and boosting spending on wind, solar, and energy storage.
Expediting the shutdown of coal plants is challenging because, in 2021, coal provided 32% of Michigan’s electricity net generation- the largest share, followed by nuclear energy at 30%, and natural gas-fired power at 27%, according to the U.S. Energy Information Administration.
“Electric grid managers across the country have warned that our nation’s electric grid is being hollowed out due to the rushed closure of reliable generation alongside the push to trust unreliable wind and solar to power our industrial economy. California has regular warnings about potential electricity supply shortages and media sources like the Wall Street Journal have repeatedly warned that the ‘U.S. power system is faltering,'” Mackinac Center for Public Policy Environmental Policy Director Jason Hayes told The Center Square. “Michigan is on the road to experience this growing instability firsthand due to a new resource plan from DTE Energy.”
Hayes noted an MCPP publication in which he recently pointed out DTE appears to be suffering from cognitive dissonance.
“In his June 28 testimony to the Michigan House Energy Committee, DTE CEO Jerry Norcia admitted that rapid closures of reliable generation had the potential to ‘destabilize the grid,'” Hayes wrote, adding Norcia testified that has already happened in California and other states. Norcia also stated that “sometimes you can’t count on [wind and solar] when you need them.”
Despite repeated warnings in previous hearings, MPSC commissioners have doubled down on furthering the instability of the grid by approving this unreasonable and imprudent settlement, Hayes said.
”Norcia and DTE agreed to a settlement that will rush the closure of the Monroe coal plant and commit the company to build unreliable wind and solar. The Michigan Public Service Commission is well aware of the dangers associated with our growing reliance on wind and solar,” Hayes said.
The order approves a settlement agreement signed by 21 intervening organizations to change how Michigan utilities source electricity for 2.3 million DTE customers over the next two decades.
Michigan’s 2016 energy laws establish IRPs, utilities’ long-range forecasts ensuring reliable service over the next 20 years, with specific requirements for reporting 5, 10, and 15-year projections. Each electric utility with rates regulated by the MPSC must complete an IRP.
The settlement agreement requires DTE to convert its Belle River Power Plant in St. Clair County from a coal-fired 1,270-megawatt baseload plant to a natural gas peaker plant used less frequently for times of highest electricity demand.
The company will retire its diesel-fueled River Rouge and St. Clair peaker plants in 2024. This order includes preapproval of $125 million to convert the Belle River plant in 2025-26.
The order requires accelerating renewable energy projects, targeting additions of 600 MW per year in 2026, 2027, and 2028, and 1000 MW per year in 2029 and 2030, with approximately 30% to be sourced through power purchase agreements. The company aims to add more than 15,000 MW of solar and wind energy generation in Michigan.
MCPP STATEMENT
The settlement says DTE will donate $38 million to utility bill assistance and home energy efficiency improvements for income-eligible households, and disclose annual political donations of $5,000 or more made by DTE Energy Co. beginning in 2024.
Settlement agreement highlights include that DTE Electric will:
Retire its Monroe Power Plant units 3 and 4 by Dec. 31, 2028, and units 1 and 2 by Dec. 31, 2032.Accelerating the development of electricity storage, targeting additions totaling 230 MW in 2025, 120 MW in 2027, and 430 MW in 2028 with approximately 35% being owned by third parties. The company aims to add more than 1,800 MW of energy storage by 2042.Increase its energy waste reduction target to 2% savings in 2023-27.Raise its distributed generation cap to 6%.Develop an engagement plan for its next IRP to boost input from and participation by members of overburdened communities.
Intervenors in the case were the Michigan Department of Attorney General; Michigan Environmental Council; Natural Resources Defense Council; Sierra Club; Citizens Utility Board of Michigan; Energy Michigan, among others.
Each organization signed the settlement agreement except for the groups CUB, MEC, Energy Michigan, Wolverine, and ABATE, which signed a statement of non-objection.
The MPSC accepted a proposed capacity demonstration for all utilities and load-serving Michigan entities to show they have adequate capacity to meet customer needs.
The goal is to avoid rolling blackouts while changing energy sources. The Midcontinent Independent System Operator is the regional transmission organization serving the majority of Michiganders.
