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March 17, 2022

Consumers Energy and Local Advocates Reach Settlement To Expand Beneficial Energy Efficiency Programs

The Michigan Public Service Commission has approved a settlement agreement that will assist communities in Michigan with the greatest energy burdens.

Contacts

Miranda Fox, Earthjustice

Alexis Blizman, Ecology Center

Renner Barsella, Sierra Club

Jesús Canchola Sanchez, NRDC (Natural Resources Defense Council)

Lansing , MI

The Michigan Public Service Commission has approved a settlement agreement between a coalition of advocacy groups and Consumers Energy that will expand energy efficiency programs, including specific programs to assist communities in Michigan with the greatest energy burdens.

The percentage of a household’s income that goes toward paying energy bills, known as energy burden, is challenging for many of Consumers’ customers, and particularly so in the historically redlined communities within Flint and Grand Rapids. The settlement makes improvements to Consumers’ four-year 2022-2025 Energy Waste Reduction (EWR) Plan that will curb wasted electricity, lower energy bills, and reduce emissions contributing to the climate crisis.

Earthjustice represented the Sierra Club and worked in coalition with NRDC (Natural Resources Defense Council), National Housing Trust, and the Ecology Center to secure a settlement that includes a variety of beneficial improvements to EWR programs offered by Consumers, including more funding for income-qualified EWR programs. Notably, Consumers will invest $1M between 2023 and 2024 in a targeted initiative in and around Flint that aims to provide energy efficiency services to economically vulnerable customers who are struggling to pay utility bills and at risk of deferral due to household health and safety concerns.

The settlement process increased Consumers’ budget from its original proposal for income-qualified electric EWR programs 29% to a total of $85.3M for 2022-2025. Its budget for income-qualified gas EWR programs increased 56% to a total of $113.1M. With these bigger budgets, Consumers will be able to serve more income-qualified families in need of efficiency upgrades and measures in a more holistic way.

Bar chart for electric IQ investment. Y axis shows $ million, X axis shows annual EWR Plan from 2021 to 2025 and Settlement from 2022 to 2025. Settlement bars, in blue, are greater than the EWR Plans bars in grey -- the difference growing greater each year.
Bar chart for Gas IQ Investment. Y axis shows $ million, X axis shows annual EWR Plan from 2021 to 2025 and Settlement from 2022 to 2025. Settlement bars, in blue, are greater than the EWR Plans bars in grey -- the difference growing greater each year, almost doubling in 2025.
These two charts represent the total income-qualified (IQ) investments in electric and gas programs that Consumers will make through 2025. The “EWR Plan” shows what Consumers originally proposed to invest and the percentage growth in investment under the “Settlement” agreement.
Energy Futures Group

Consumers will also continue and expand its Health and Safety Pilot, allocating $1.85M total to the pilot in 2022-2023 ($1.5M for single family homes and $350K for multifamily homes). As part of the pilot, Consumers will continue to promote participation of customers who are in arrears and will promote the use of healthier building materials, specifically targeting insulation and air sealing products.

Mike Berkowitz, Sierra Club’s Beyond Coal campaign senior representative in Michigan said: “Michigan has one of the highest energy burdens in the country and much of that impact is in Flint's majority Black income-qualified communities. We are proud to announce this important settlement agreement, ensuring Consumers Energy equitably distributes resources in a way that prioritizes these neighborhoods that have been historically disenfranchised, lowering energy bills while making homes safer and more resilient.”

Alexis Blizman, Ecology Center’s policy director said: “After a very successful first two years of their health and safety pilot program, we are thrilled to see Consumers Energy both extend and expand the pilot. The vital home improvements encompassed in the pilot have allowed homes that have had energy efficiency deferrals in the past to make the necessary repairs. These measures ensure that the homes most in need of energy waste reduction are now eligible. Additionally, by addressing health and safety measures, issues such as air quality, comfort, and removal of environmental hazards have the additional effect of creating a healthier place for people to live, improving overall quality of life. The incorporation of healthier building materials will create even better health outcomes. Our hope is that after two more years as a pilot, health and safety measures will become a permanent part of utility programs.”

Laura Goldberg, Midwest director of energy equity & affordability at Natural Resources Defense Council said: “The agreement with Consumers includes critical, expanded energy efficiency investments in under-resourced communities and communities of color addressing energy and housing affordability in Michigan. The settlement also requires deeper retrofits that focus on upgrades to air sealing, insulation, and heat pumps. This will be key for maximizing the benefits of energy efficiency in the communities that need it most, including keeping bills affordable while keeping Michigan families safe and comfortable in their homes.”

Todd Nedwick, senior director of sustainability policy at the National Housing Trust said: “With this agreement, Consumers is substantially increasing its investment in addressing the energy burdens of under-resourced families, including families living in multifamily and rental homes. The agreement helps ensure that affordable housing providers can implement energy efficiency measures that reduce energy bills and greenhouse gas emissions, such as electric heat pumps, heat pump water heaters, and air sealing/insulation.”

Chinyere Osuala, senior attorney with Earthjustice said: “This settlement ensures increased energy efficiency funds to serve highly energy burdened communities, especially in Flint, MI. We know that Black and Brown communities in Michigan are struggling to pay their bills and this settlement is a critical step towards fighting energy inequality in the state.”

Additionally the settlement includes the following commitments from Consumers:

  • Consumers will launch a study in 2022 to identify historic participation and coverage of its income-qualified EWR programs. The goal of the study is to identify areas in Consumers’ service territory with high numbers of economically vulnerable households and to develop strategies for targeting energy efficiency services to households in those areas.
  • Consumers will ramp up its data collection and reporting efforts, which will help advocates better understand the equity of Consumers’ investments across its EWR programs.
  • Consumers will work toward a financial incentive that rewards a focus on lifetime savings, low-income investment, and low-income targeted measures. For the low-income targeted measures, the utility will be rewarded financially for installing high impact measures that substantially reduce energy bills and reduce greenhouse gas emissions, such as electric heat pumps, heat pump water heaters, and air sealing/insulation (i.e., weatherization), as opposed to gas furnaces, gas water heaters or minor measures such as light bulbs.
  • Consumers will continue its one-stop shop approach and other best practice program design for serving low-income multifamily owners and residents with EWR services.
  • Consumers will implement a workforce development initiative to promote contractor diversity, training, and certifications, including training on the use of healthy insulation and air-sealing materials.
  • Consumers will provide training and education on the use of healthy insulation and air-sealing materials for contractors, and will begin tracking the current insulation and air-sealing materials used in the Company’s Income Qualified EWR Programs.
  • Consumers will continue and expand its all-electric homes pilot, focused on super-efficient, all-electric new construction work — including a portion of affordable housing new construction.

About Earthjustice

Earthjustice is the premier nonprofit environmental law organization. We wield the power of law and the strength of partnership to protect people’s health, to preserve magnificent places and wildlife, to advance clean energy, and to combat climate change. We are here because the earth needs a good lawyer.