An In-Depth Look at How We Provide Affordable Clean Energy to Michigan

When we created our Clean Energy Plan, designed to lead the renewable energy revolution in Michigan, it was extremely important to us that no one got left behind during the transition away from fossil fuels.

We recognize renewable energy is something that should be available to all—not just those who own single-family homes and can afford the initial investment for rooftop solar or electric vehicles. That’s why we put a huge emphasis on providing clean and affordable energy to our customers. After all, what good is solar energy if it leads to high energy bills that some families just can’t fit into their budget? 

We need to bring everyone along on Michigan’s journey to renewables. Right now, as we lean further into renewable resources like solar power, we maintain affordability in two ways: increasing our capacity for renewable energy and providing programs designed to give customers more control over their energy costs. 

Part One: Developing Renewable Resources at Utility Scale

When our company was founded way back in 1886, we relied heavily on providing hydropower to our customers. (That’s right—we were into renewables before renewables were cool!) We’ve worked with hydropower for well over a century at this point. We also began harnessing wind power in 2012.

However, as with some U.S. states, we were so dependent on fossil fuels for our energy that our renewable sources made up a small fraction of our customers’ power sources. Wind and hydropower were nowhere near the utility scale provided by our coal plants. 

Our Clean Energy Plan aims to change this by phasing out coal by 2025 (15 years earlier than our original timeline) and getting solar power up to utility scale.

In addition to its environmental benefits, solar is increasingly cost competitive with other fuel sources. We can add solar gradually by competitively bidding solar supply to ensure we keep energy bills affordable. Solar also provides flexibility to respond to emerging needs, adapt to changing conditions, embrace innovative technology that has become more cost-competitive every year – without having to bet on building a large, new fossil fuel power plant.

Our solar generation is starting small, but will ramp up quickly. We plan to bring 1,100 megawatts of solar capacity online by 2024, which equates to serving about 425,000 residents. By 2040, we want around 8,000 megawatts of solar power added to Michigan’s energy system, which equates to serving over 3,000,000 residents.

To achieve this, we expect to develop between 50 and 75 utility-scale solar projects across the state of Michigan. Our plan forecasts renewable energy capacity levels of:

• 35 percent by 2025
• 47 percent by 2030
• 63 percent by 2040

Making the switch without sacrificing affordability 

We know it’s not possible to go 100% renewable overnight. It takes years to update our infrastructure and phase out fossil fuels. The transition outlined in our current Clean Energy Plan creates price stability and will save customers more than $600 million through 2040 compared to our current operations. How? 

Establishing owned energy sources

The majority of this cost savings will come from eliminating our coal plants as a fuel source, which will eliminate maintenance and operational expenses. We will then replace those plants with sources of clean energy.

Right now, we purchase electricity from the market to service our customers. This will no longer be necessary when we own our clean energy sources, leading to further cost savings we can pass on to our customers.

Using natural gas as a fuel source to generate baseload power

We can maintain energy affordability by using natural gas as a fuel source to generate baseload power as we transition to cleaner sources. Customers will benefit from the operational flexibility of our natural gas facilities, which we can ramp production up and down to more closely meet market conditions. If gas prices are low, for example, we can turn down or even take gas plants off line because they’re nimbler than coal-fired plants.

The short and long-term savings generated by these two strategies will help manage costs, while the incremental and flexible strategy also allows us to adapt to needs and changes in the energy landscape as we go. 

Part Two: Giving Customers More Control Over Their Energy Bills

It will take time to ramp up renewable energy to utility scale. In the meantime, we’re encouraging our customers to become a Force of Change with programs that give more control over their energy bills and incentivize clean energy use. 

You can read more about our full list of programs here, but we’ve detailed our most popular options below.

Home Energy Analysis (HEA)

Our HEA program is an excellent option for our residential customers. One of our participating contractors will conduct a thorough assessment of a customer’s home to identify the best opportunities for them to save money on energy and improve their comfort. 

With the customer’s approval, the contractor will install up to $50 worth of energy saving products like LED light bulbs, pipe insulation, faucet aerators, showerheads and maybe even a programmable thermostat – all at not cost to the customer! We also offer discounts on some of these energy efficient items through our online store. Learn more about our HEA program here.

Demand Response Programs

We have a few programs that fall under the umbrella of Demand Response (DR). These are programs that incentivize our customers for reducing their energy use during high-demand periods to decrease stress on the energy grid and help maintain reliability. Our most popular DR programs are our Smart Thermostat program and our AC Peak Cycling program.

Smart Thermostat Program 

The Smart Thermostat Program syncs to the customer’s smart thermostat to learn the settings that keep them comfortable. Occasionally, on really hot or really cold days when demand for energy is high, we’ll schedule an Energy Savings Event.

These days are typically identified the day of or the day before and customers are notified via email that their thermostat will be adjusted – based on their comfort preferences – to manage energy use. Houses are pre-cooled or pre-heated earlier in the day to shift energy use away from times when demand for energy is highest and when energy costs more money.

Because it encourages using energy when prices are lower, this program can save customers money. Plus, they will receive $25 for every season they participate and get the added bonus of knowing they’re helping reduce stress on the grid, paving the way for reliable renewable energy. To enroll, customers can purchase a smart thermostat at a discounted price on our website or enroll their own qualifying smart thermostat.

AC Peak Cycling Program

When customers enroll in our AC peak cycling program, we install a switch on their outside central air conditioning unit. On select days in the summer (usually the hottest days) we’ll start a cycling event that will run the air conditioner for shorter periods, keeping the home comfortable while using less energy. When the event is over, the air conditioner returns to running normally. 

Customers who participate in AC Peak Cycling receive an incentive for enrolling and $8.00 off their electric bill per month for four months in the summer. We have installed over 100,000 switches so far, which eliminated the need to operate a small power plant (43 megawatts) for 36 hours last summer or to buy this electricity on the market at a time when electricity prices are the highest.

Solar Gardens

Our Solar Gardens program acts like a community garden. Customers can subscribe to their desired number of solar blocks which allows them to purchase 100% Michigan-made renewable energy without the upfront costs and long-term maintenance of owning their own solar energy system.

Combined, our community solar plants generate enough electricity to power over 900 homes at a time. That’s the equivalent environmental benefit of planting 41 acres of trees in Michigan! 

Bringing affordable clean energy to Michigan 

To us, clean energy and affordability go hand in hand. Our Clean Energy Plan factors in cost every step of the way as we transition to increased renewable energy and phase out coal. 

By taking small steps for the betterment of Michigan, we can protect our planet, boost our state’s local economies and lower energy use. Together, we can become a Force of Change.