Michigan's two big investor-owned utilities, Consumers Energy and DTE Energy, have both committed to meeting state-mandated clean energy targets and retiring coal plants by 2040. But according to state regulators, DTE’s plan doesn’t pass muster. 

Last week, the Michigan Public Service Commission ordered DTE to redo its integrated resource plan (IRP) due to “fundamental flaws” in how it addressed renewable energy as part of its 15-year resource plan. The PSC also ordered DTE to undertake an accelerated effort to seek out more renewable energy resources and improve energy efficiency — or face the possibility of its entire plan being denied. 

The order gives the Detroit-area utility until March 21 to resubmit its IRP and until April 1 to submit an amended renewable energy plan. It also orders a review of DTE’s resources under the state’s implementation of the federal Public Utility Regulatory Policies Act (PURPA), which has driven much of the state’s renewable energy growth, noting that it will require the utility to take a “truly integrated approach that considers both demand-side and supply-side resources.”

The regulators' decision could to provide a boost to solar developers already active in the state's PURPA market. Cypress Creek Renewables, for one, plans to develop about 40 percent of the 584 megawatts of solar called for in Consumers' plan, which is expected to roughly triple the state's installed capacity.

The order caps a lengthy and contentious battle over DTE’s long-range IRP, which DTE and Consumers were required to develop for the first time under Michigan’s comprehensive 2016 energy law. The two utilities together serve about 85 percent of the state.

DTE counting on keeping its coal capacity online

Both Consumers and DTE agreed last year to commit to clean energy plans that include big improvements in energy efficiency and a pledge that 25 percent of their electricity will come from renewable resources by 2030.

Consumers’ IRP, which calls for 5 gigawatts of solar by 2030 and phasing out all coal-fired power by 2040, was approved in June after undergoing significant changes to its original form, such as opening half of its solar development to third-party developers. This week, Consumers upped its long-term goals to include reaching net-zero carbon emissions by 2040.

But DTE’s plan, which also seeks an 80 percent carbon reduction by 2040, has faced challenges from the start. That's because it relied on keeping its 1.6-gigawatt Belle River coal plant open until 2030 to declare that it didn't need to seek new supply-side resources to make up for any capacity needs, including renewables.

Last week's order called this decision a “fundamental flaw,” since it prevented the utility from assessing alternatives to those coal plants. A PSC administrative law judge ruled in December that this was a violation of the 2016 state law that set up the IRP process. 

The new order was hailed by the clean energy, environmental and consumer groups that have been protesting DTE’s plan. “We hope the [public service commission’s] recommendations will spur DTE to revise its plan and appropriately value clean energy alternatives instead of its own existing power plants,” James Gignac, lead Midwest energy analyst for the Union of Concerned Scientists, wrote in a statement. 

Long-range energy plans aren’t the only task facing DTE and Consumers Energy. The Michigan legislature is considering a package of bills, dubbed Powering Michigan Forward, that could revamp solar net metering and distributed energy resource (DER) policies created by its 2016 energy law, in ways that Consumers and DTE have stated could shift costs from solar to non-solar customers. 

Consumers and DTE have also been asked by the PSC to consider DERs as potential alternatives to a portion of their five-year, $7.2 billion grid modernization initiatives approved last year.

Both utilities are engaged in DER pilot projects, including Consumers’ residential solar-storage and EV charging infrastructure pilots, and DTE’s pilot to tap the demand response potential of homes and businesses as an alternative to distribution grid upgrades.