DTE Energy is not meeting Ann Arbor’s needs for reliable, renewable electricity. Could a municipal takeover be the answer to residents’ pleas?
For this episode of the Local Energy Rules Podcast, host John Farrell is joined by Gregory Woodring, the president and founder of Ann Arbor for Public Power. They discuss the ways that investor-owned utility DTE Energy has failed Ann Arbor customers and how the city could take over and provide better service.
Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.
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| Greg Woodring: | It’s an annoying issue that really the biggest hurdle towards public power for most communities is not anything to do with running the utility, or financing the acquisition, or anything like that, is just the legal battle with the utility that’s going to try to rake ’em over the coal as much as possible. |
| John Farrell: | The original utility franchise contract covered just 26 light bulbs, but over the years, state law has locked Ann Arbor, Michigan into an increasingly costly relationship with DTE – its electric utility monopoly and the state’s largest investor owned utility. The utility has put the health and safety of its residents at risk during extreme weather and being stuck with DTE means the city is likely not to hit its urgent 2030 renewable energy goals. Joining me in March, 2024, Gregory Woodring, president and founder of Ann Arbor for Public Power, explains the alternative and how the city has been moving closer to taking over the electric grid for its own good. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system.
Gregory, welcome to Local Energy Rules. |
| Greg Woodring: | Thank you so much. Glad to be here. |
| John Farrell: | So I was hoping you could start off by sharing what motivated you to start this campaign. Do you have a background in clean energy or climate work or working in utilities? What is it that got you into this public power effort? |
| Greg Woodring: | Yeah. No, I don’t have much of a personal background in energy. Prior to Ann Arbor for Public Power, I came to this, I was organizing with the Huron Valley Democratic Socialists at the time and I was honestly rather new to organizing, but I had gotten interested in doing my part and getting involved and some of the major issues that I saw that I wanted to get involved were around one, the climate that seems like the most existential threat, relatively young person, was younger back then. So that was pretty concerning for me. And at the same time, I feel like we have this massive problem where our society just feels like it’s getting more and more inequitable. Our income equality is out of control and the structures of our society seem to be constantly corrupted by these large corporate influences.
And so being in that environment, we were actually looking at, Ann Arbor had just about that time they were actually considering passing their 2030 carbon neutrality goal, the A two zero plan. And that was really exciting. It was really ambitious goal and we were really excited to sign on as a collaborator to that and look into it. But as we looked more and more into the plan, well the goals were great and very ambitious, we were not as convinced that they had a solid pathway to pursue it. And as we dug into it more and more we came to realize that public power was an option available to us. And so that spun into a few meetings looking into it and things like that. And then the pandemic hit and things got a little bit chaotic, but I had reached out to one of our current advisory board members and big supporters, state senator Jeff Irwin who came to us with a big old binder full of information from past times where people in Ann Arbor had looked into this and was very supportive from the get-go. And so that led us to pulling together a coalition of a lot of different organizations, Ann Arbor Indivisible, the Graduate Students Union, Sunrise Movement, various other organizations in the Ann Arbor area. And we just started meeting and talking about this and eventually we came to realize that yes, this is an actual way that we can reach our climate goals. And on top of that, we were really pleased to discover that when you look across the state and across the country, public power utilities simply are paying less for more reliable power. And throughout the last few years we never really expected DTE service to degrade so quickly, but we have been experiencing many, many multiple week outages per year. So that’s only put more and more fire behind our campaign to both directly tackle the climate crisis through public power, but also start to address some of the symptoms of the climate crisis, which is increasingly unreliable power in addition to the general issues that investor-owned utilities have with exploiting their customers for profit and not reinvesting those profits into their infrastructure. |
| John Farrell: | When you were asked why you were helping lead this pursuit of public power, you were quoted in a news story then mentioning, and you’ve kind of covered this already, about Michigan’s other city owned utilities, that they have lower rates and better reliability in large part because they’re not paying 14% of their bill costs towards shareholder profits. Is there more you’d like to add to that about kind of the motivation? You’ve covered it pretty thoroughly here I think in terms of your motivation to start the campaign, but is there anything else that you’d like to add that you think is a really important thing for people to understand about why public power? |
| Greg Woodring: | Yeah, absolutely. I mean, I think that at the heart of it, when you really get down to looking at our energy system, it’s hard to not come away with the impression that our current system is rather kleptocratic. We are in a situation where we have these state enforced monopoly utilities that are taking a profit margin off the top and giving us lower quality service as a result. I mean, even if you are going to accept the normal capitalist market based argument for private ownership where competition is going to lead to higher quality of service, so even though you’re giving out a profit margin, you’re actually going to end up with a more competitive product that falls apart when you have a state enforced monopoly, right? Instead what we have is a situation where DTE or other investor owned utilities across the country are supposed to be regulated by our public service commission, the Michigan Public Service Commission and the legislature, and instead DTE has been taking their massive profit margin and reinvesting that into lobbying our politics.
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| Greg Woodring: | They lobby for all sorts of negative policies statewide in Michigan and beyond. There actually was a really interesting report about how DTE was even funding anti-climate legislation in California. And so you’ve got DTE here taking this huge profit margin, not investing it into our infrastructure and instead spending it to manipulate our politics so that they can be less regulated so that there will be less push towards clean energy. And even things like anti-democratic laws that were being supported by Republicans or in our state were being funded by some of these DTE shadow groups, the 501c4s that they’ve set up to funnel some of their money through.
So you’ve got that aspect of it and then you also have the fact that it’s just an inefficient system when you really break down the fundamentals of it. Public power utility is more efficient at running an energy utility than an investor-owned utility. And this is kind of getting into the weeds, but I think your audience probably is adept enough to be able to understand this point, but money’s cheaper for a public power utility, right? They are financing 100% with municipal debt rather than an investor-owned utility that is financing all of their projects with about a 50 50 debt to equity split. I mean, DTE’s corporate debt’s pretty low as far as corporate debt goes. A utility, however, it’s not going to compete with Ann Arbor’s incredible credit rating that they have as a city. Municipal debt’s just about as cheap as you can get unless you’re a state or a federal government. And on top of that, DTE stock, their equity is extremely expensive. They’re guaranteeing a 9.8% return on equity. So when you take that into account, you’re also realizing that okay, every single thing a public power utility is doing is cheaper. They’re not paying out these huge salaries and executive bonuses, they’re not lobbying, they’re not marketing or they’re not taking a profit margin. And so all of these cost benefits then turn into both lower rates and higher reliability. And you see this all across the state and across the country. How is it that these utilities are able to charge less rates for considerably a lot higher reliability? Well, it’s because it’s just a more efficient system. It’s not like they’re some utopia. It’s not like they have the best government in the world. Their roads are just as bad as Ann Arbor’s, however, the structure of the utility is more efficient. |
| John Farrell: | That’s great. I really appreciate your comprehensive outline of all of the different pieces there. I think you laid it out very nicely. I want to get specific about Ann Arbor’s goals and as well as about the feasibility of public power. So the city did a feasibility study for its a hundred percent renewable energy goal by 2030 that was published last year. I assume this is a little bit after the carbon neutrality goal. Can you talk a little bit about what was in that study and to this question that you raised about do you think whether the city could meet that goal without a city owned utility? I’ve been thinking about this for a long time because I actually did an entire podcast series called Voices of 100% where we talked to city leaders in places that made these a hundred percent commitments. And we kind of asked them this question, well, you don’t own the utility. How are you going to get them to be helpful? And they didn’t always have a good answer. So I guess I’m kind of curious, did the city have an answer in that study and did it really outline the expected costs and benefits of the city taking over the electric service if in fact public power was one of the solutions that they saw? |
| Greg Woodring: | Yeah, happy to get into that. So that study that you’re referencing came after over two years of advocacy from us. That was kind of our first thing that we were really pushing for, and the city did include proper feasibility study in that, but it was couched within this larger study that they called a hundred percent Renewable Energy Options analysis. And long story short, the study ultimately concluded that they didn’t think it was feasible for the city to fully municipalize by 2030. This is a point that we kind of contend. I mean you can see an argument for maybe it would take longer than six years. I don’t think that they provided very good evidence for that. They quoted a study that came out of Washington D.C. but within that study there was multiple examples of cities that managed to do it quicker than six years.
So that is an element, and so they essentially didn’t consider municipalization as an option for the one hundred percent options analysis. However, they did mention that there are some long-term benefits to municipalization and that if we could stand up a muni, then it would be a pathway to a hundred percent renewable. So instead, they were forced to provide another option for the city to reach a hundred percent renewable. Part of it was enroll in these programs that DTE offers to they call My Green Power, and essentially it’s an energy offset program that DTE offers where you’re able to buy renewable energy credits to say that their power is coming back green, and that covered around 50% of the power if the city enrolled in those types of programs at their maximum level. The next 10% comes from very interesting sort of thing that’s come out of some of our early discussions with the city, which is the sustainable energy utility. Now, the sustainable energy utility, some of your listeners might be aware of this term because there are sustainable energy utilities that exist at state levels across the country. However, they’re pretty different than what the city of Ann Arbor is actually proposing here, or the sustainable energy utility the city of Ann Arbor is proposing would essentially be a competing utility and they would set up a utility structure, however, they would not necessarily acquire DTS infrastructure. And instead what they would do is they’d use that to get around some of the solar caps that DTE puts on us so that they could install more behind the meter solar, things like this. And then they also believe that they might be able to say, end up some limited amount of infrastructure to build out microgrids between neighbors to allow for some amount of sharing of power. That’s generally something that Ann Arbor for public power supports. However, we don’t feel like it’s satisfactory itself because as the report suggests, it’s only projected to be able to supply about 10% of Ann Arbor’s total energy demand by 2030, and then you still have about 40% of their power that’s unaccounted for. And so what the report recommended was that they buy renewable energy credits off the national market, which was estimated at eight to $20 million. In our opinion, that’s not really a satisfactory solution or plan to reach a hundred percent renewable energy. Renewable energy credits are dubious best in many cases, and in our opinion, we really need to retire the coal or gas or carbon emitting electrical generation that we’re actually consuming rather than simply trying to offset it by something like a renewable energy credit, or the city of Ann Arbor has been also proposing things called virtual power purchase agreements, which are a bit more of a complicated form of renewable energy credit essentially. That is kind of where the energy options analysis landed. And then also they did the full municipalization feasibility study as well. We really pushed to make sure that that was included as a separate portion of the study that came back with a range of potential costs. It did give us some good info, but it didn’t land on a real solid number. It did estimate that the cost of DTE’s infrastructure would likely be around $200 million, and that was pretty solid. However, it gave a very wide range for legal compensation that would be needed to give to DTE. So things like stranded assets are going concern, they report estimated somewhere between 80 and $800 million an obligation to DTE. Now, in our opinion, and we’ve done some legal work on this, and I believe that probably by the time this podcast episode comes out, we’ll put this out publicly, but we don’t believe those high-end estimates are realistic. Our legal counsel has done some looking into it and we think that there was some bad assumptions made. However, ultimately the number that is going to inform the city on DTE’s infrastructure is going to be coming in a phase two feasibility studies. So that’s essentially a valuation of DTE’s assets and would be used as essentially exhibit A in a legal case for the acquisition. And I’m actually pleased I can announce this on your podcast right now, but last night we found out that the Ann Arbor budget for 2024 includes $1 million for a phase two feasibility study. So hopefully we’ll be getting a much more solid number on the actual cost of acquisition there. However, it did show even with that wide range that well in the low end estimate costs are projected day one to go down by 10% and the high end estimate they actually estimate costs would go up by 36%. But even in the high end estimate after 20 years, the numbers go back to parity because you are paying off that debt, right? So it’s an investment. It’s possible that our electrical rates in the short term could go up, they could go down. However, in the long term, our rates will almost certainly be lower than DTE’s. |
| John Farrell: | Two things I wanted to follow up on. One is I thought I had read somewhere when I was looking into, I think I was reading about the sustainable energy utility proposal that the city came up with, and I had thought at the time that the public power campaign had been retired or whatnot, but there was some a hundred year old court case in Michigan and people talked about it as like DTE basically has a perpetual franchise or monopoly in Ann Arbor or in any city. And I’m kind of curious, has that been resolved? And it’s clear that yes, Ann Arbor, like many other cities, does retain the right to serve itself with electricity. |
| Greg Woodring: | Yeah, so that was actually one of the very early stumbling blocks for our campaign and in my opinion, misunderstanding around that law is a large part of why there hasn’t been much movement in Michigan over the last a hundred years to municipalize, but we were a little bit too stubborn to give up, so we managed to push through on that and get a little bit of clarity. So what you’re referring to is the Foote Act. So back in 1905, early electrification days, there was a lot of different energy provider, private energy providers out there in the state, and nearly every municipality in Michigan had some form of franchise agreement with an electrical provider. And the issue that the state legislature was finding was that these were all written very differently and they all had different terms. It was very difficult for them to regulate. So there was this push from the legislature to standardize these electrical franchise agreements at the state level. So the state essentially rewrote it. They forced the cities to sign it, and then it just so happened that Foote, the Bill’s author, also served on the board of a company called Consumers Energy. |
| John Farrell: | Oh, interesting. |
| Greg Woodring: | Interesting. And when they rewrote these contracts, they just so happened to forget to include an expiration date on them. And so all of these cities were now suddenly forced into these contracts, which the utilities were happy to sign, that gave them perpetual franchise agreements throughout the entire state. Basically, there’s a few regions of the state that don’t have them, and those are areas that weren’t electrified at the time, but Michigan’s one of the older states, so a lot of Michigan was electrified at that time. There was a huge public outcry at the time, 1907, there was a constitutional amendment passed in the state of Michigan that capped franchise agreements at 30 years maximum. However, the utility sued, went to the Supreme Court of Michigan and the Michigan Supreme Court found that, well, that applies to all future franchise agreements. It does not apply to existing ones and that they can’t force the utilities unilaterally to agree to a change in this contract, which is very frustrating and it feels a bit hypocritical because they just forced these changes. But I guess because the state had dominion over the cities, but they didn’t have dominion over the utility, that’s kind of how it worked out.
What that practically means for Ann Arbor is that DTE does have an exclusive franchise in Ann Arbor service territory. No other electric utility can service it other than the city itself. So the city doesn’t need a franchise agreement to service its own territory, right. The city is able to service its own territory inherently, however, they could not expand beyond the borders of Ann Arbor without working on some sort of deal with DTE, which doesn’t seem terribly likely because then you would be infringing on DTE service territory. So that is essentially the catch, which is annoying. A lot of the surrounding county would love to be under a public power utility as well, and we’d love to be able to facilitate that, but it looks like you probably would have to fight these fights out municipality by municipality. So currently the way we see it is Ann Arbor is a very well positioned city to take on this fight. It has a fairly progressive voting base. It certainly has the resources to do so. We’re hoping to prove out the process here and then hope to expand it to other municipalities after a success in Ann Arbor. |
| John Farrell: | I don’t want to go too much more in the weeds, but I guess one of the last things I just want to say about this is it’s interesting that the supreme court sided with the utilities kind of like, oh, you can’t retroactively rewrite contracts. In Minnesota, just a few weeks ago, our Public Utilities Commission retroactively rewrote contracts for community solar providers in order to reduce the costs, the perceived costs. And so even though there seems to be a very strong principle in general about not doing retroactive contract writing in law or in regulation, it happens when the parties involved don’t have as much political power as the utilities. |
| Greg Woodring: | Yes, I think that that’s probably true. I mean, it would be fantastic if some activist lawyers wanted to take on the Foote Act. Every lawyer I’ve talked to seems to believe that it’s pretty well entrenched. It’s been tried a lot of times, people have tried to get rid of it many times in Michigan, and there’s been multiple cases about whether these contracts are inheritable and the courts have repeatedly ruled that they are, which is why all those multiple utilities, actually Ann Arbor, this tiny little electric utility was servicing 26 electric light bulbs. That was the original franchise agreement for the city of Ann Arbor. It’s been bought out by three different companies now, and now it’s owned by DTE. Right. And that gives them that franchise agreement over all of Ann Arbor, when at the time it was just meant as a supplemental a few extra street lights. |
| John Farrell: | That’s amazing. It’s 36 light bulbs, you said? |
| Greg Woodring: | 26. Yeah. |
| John Farrell: | 26 light bulbs. Unbelievable.
We’re going to take a short break. When we come back, I ask Gregory whether the aging grid means lower acquisition costs if Ann Arbor takes over, ask what successes they’ve had so far, and how public power can address historical disparities in energy burden and in exposure to environmental harms. You’re listening to a Local Energy Rules podcast with Gregory Woodring, president and founder of Ann Arbor for Public Power. Hey, thanks for listening to Local Energy Rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners. Your donations not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations. Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation isn’t something you can do, please consider helping us in other ways. You can help other folks find this podcast by telling them about it, or by giving it a review on iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this podcast and ILSR’s other podcasts, Community Broadband Bits and Building Local Power. Thanks again for listening. Now, back to the program. |
| John Farrell: | So I wanted to go back then to, you talked about the feasibility study, looking at this range of costs for acquiring the infrastructure or particularly the range of costs that are like legal costs and stranded assets and whatnot. I guess a couple of different questions from that. So you noted in a video interview that you did late last year, and we’ll link to this on the show page, that DTE’s grid is aging. So I’m kind of curious if you feel like that was captured well in the city’s initial valuation of their assets. And then I guess I’ll have a follow-up question, but just want to start there in terms of do you think that it really accurately took into account the fact that the grid is aging and in need of upgrades? |
| Greg Woodring: | On the engineering side? I know that I did read their methodology for doing it. It seemed sound enough to me as a non-technical type of person, but I think we’ll get a lot greater clarity towards that out of the phase two study, which will be a much more boots on the ground. There was just a bit of a survey of infrastructure and they essentially projected a range of deprecation on the infrastructure to be able to figure out how old the infrastructure really is. And actually the state is currently doing an audit of DTE for reliability, which also might provide some amount of insight into just how out of date their infrastructure is, which hopefully that will help inform any future studies that we need to do on that.
As far as the infrastructure costs, it seems like there was at least an effort to put towards estimating that, I don’t feel qualified to really speculate on how well that was done. On the legal side, it is a little bit much to really go into some of the issues, but essentially the legal costs on the high end were projecting us paying out 20 years of DTE’s revenue for the city of Ann Arbor, which is not very well justified. The report claims that the IRP planning window was 20 years, it’s not correct, it’s five years. All of these different things also that we shouldn’t be paying the entire of revenue. We should really only be paying the difference between wholesale and retail for the energy distribution costs because that’s ultimately really the only thing that DTE is losing as if they can’t distribute it to Ann Arbor customers, then they potentially would have to sell it on the market. And even that is not taking into account the fact that DTE is planning to retire a great deal of generation. And so DTE is probably not going to have excess energy. In fact, it just means that DTE has to build up less new generation as they’re planning to phase out coal, which they’ve been forced to do by 2032 and are primarily replacing with gas, unfortunately, despite all their claims that they suddenly are going to make gas clean. I think that there was definitely some issues on the legal side of the study, but as far as the infrastructure side, I think we’ll get a lot more clarity out of the phase two study. But I’m not technical enough to really speculate too much beyond that. |
| John Farrell: | It’s interesting. I did a podcast interview with Scott Hempling a number of years ago, who’s been a utility lawyer for many, many years and has served as an administrative law judge. He wrote a great book about utility mergers in which he noted, and I thought this was interesting for the purposes of public power, that when utilities do their reporting about the valuation of their assets, there’s a very standardized way that they have to calculate the book value, right? It’s like the initial cost and then there’s some depreciation on a straight line basis. But when utilities sell their assets in a merger or when they are asked to sell their assets in a public power campaign, they mark them up. And I’ve always thought of that as a particularly perverse thing that we allow them to take essentially a public asset that has often been paid off and to basically mark it up for profit when it comes to especially this issue of public power where a city is saying, your service is terrible, we want to take it over from you, and they’re somehow allowed to get a windfall profit on the assets at that time, even though they’ve been doing a terrible job. I don’t know, it just blows my mind. |
| Greg Woodring: | Yeah, I absolutely agree. I think that there probably could be some help that Federal Energy Regulatory Commission and others do towards helping to enforce that utilities are a little bit more honest about the value of their assets, things like this. So I hope that maybe some movement could be done on that. And from what I also understand of a lot of public power acquisition cases, a lot of times the cities ultimately just end up deciding to give the utility a bit extra money just to get out of court. Because I talked to Randy Knight from Winter Park before and he’s like, we don’t really believe we should have had to pay any stranded costs, but we paid some of them just to be able to settle the deal. So it’s an annoying issue that really the biggest hurdle towards public power for most communities is not anything to do with running the utility or financing the acquisition or anything like that. It’s just the legal battle with the utility that’s going to try to rake ’em over the coals as much as possible |
| John Farrell: | For more information on this see Boulder, Colorado. |
| Greg Woodring: | Absolutely. |
| John Farrell: | So Greg, you’ve been pushing for public power since at least 2020, and I guess it sounds like maybe even a little bit before that. What would you describe as some of the accomplishments of the campaign so far and what’s coming up next? |
| Greg Woodring: | Yeah, so I think that the biggest accomplishment really is getting the phase one feasibility study funded. In the past, I think that that was a pretty big step for us that we’ve been organizing around for several years. I think also we’ve really dramatically shifted the narrative in Michigan around power in general. I think that electrical outages are something that a lot of people just see as the weather. I think that it’s pretty easy for people to just be annoyed by it, but ultimately it’s just something that you get over with and you deal with and then you move on. But I think that we’ve done a really good job at pointing out that, hey, it actually isn’t normal for us to be losing power for a week or more multiple times per a year, and it’s not normal for us.
Last year, February time, I was out of power for nine days after an ice storm and a whole bunch of southeast Michigan was. And when you look at that and then you look just a few miles to our north from Ann Arbor, Chelsea, Michigan had almost no outages and all of their outages were fixed within a day. Lansing also had about a hundred outages total, and all of them were fixed within a day. And when you point out that there’s these huge discrepancies between the type level of service that we’re getting from DTE and the level of service that others who have public power are enjoying first, it strengthens the argument for public power, but also strengthens all of the other energy justice arguments that have been taking place across the state that, hey, actually we are receiving much worse service than we should be able to reasonably expect. And there are good examples of utilities that can do this well. So I think that that’s been a big win for us just in that type of public education angle. As far as the next steps on the campaign, while I did actually just mention that we got a huge bit of a victory last night, which was that the city of Ann Arbor is allocating the funds to do the phase two feasibility study and plan to take the next steps on municipalization and actually staff recommendations for next steps after the phase one feasibility came out a few weeks ago, the mayor of Ann Arbor made some very friendly comments and city council, and essentially the staff recommendations came out that argue for pursuing the sustainable energy utility, which I mentioned earlier, and then continuing the process for municipalization, which is exactly how we’ve been saying we think the city should pursue this because there is a huge advantage to the SEU, which is that it can stand up before the acquisition battle is finished. Nobody really knows how long the acquisition battle will finish. Some areas are able to do it in a year. Some areas Boulder, Colorado took 10 years and we’re hopeful that that’s not going to happen to us, but it is worth acknowledging. So let’s get started with what we can do now and then continue that fight alongside of it. And so I believe that there is going to be a question put on the ballot in November that would set up the structure for the sustainable energy utility, which ultimately would be the same structure. I’m assuming that there isn’t any problems that come up, that turns into the full municipal electric utility. So I think that there’s a good chance that we’ll be throwing in and supporting that campaign if it does come up. And as long as there is some amount of assurances that it would be friendly to turning into a full municipal utility when the time comes. |
| John Farrell: | That’s great to hear. Could you talk a little bit about how public power can help address some of the disproportionate health and financial risks of communities of color or indigenous communities? Are there folks from those communities involved in this campaign? |
| Greg Woodring: | Yeah, absolutely. Ann Arbor is a rather privileged city, it’s true to say, but there are a decent amount of lower income and people of color still within Ann Arbor and DTE is a for-profit company. They are in fact one of the more predatory companies in this angle. They’re one of the only investor-owned utilities in the Midwest – there was actually a really good report by Energy and Policy Institute on this – that actually sell debts to collectors that will garnish wages. And there have been serious deaths and health effects where people are not able to afford their medicine because their wages are being garnished by DTE. They also do electrical shutoffs in dangerous conditions. It was actually just a few weeks ago, a 70-year-old man in Ann Arbor who his house burned down. He was using propane to heat his house because his gas and electricity had been shut off.
Yeah, it is a very callous way that DTE runs through utility by comparison, with a public power utility, you can build in certain amount of equity angles, you can have programs that allow people to keep their power on even if they’re not able to pay. And in particular, our intention with this is to be moving towards clean power. DTE’s Energy generation is primarily in lower income black and brown neighborhoods throughout southeast Michigan. This is a major issue that the Michigan Environmental Justice Coalition fights on, which we are strong allies with. And Magic is also another nonprofit, Mikhail Goodman, the executive director of Magic that works on energy justice issues in Detroit area, is on our advisory board. Desiree Simmons, who does a lot of energy justice work and surrounding town Ypsilanti, is also on our advisory board. So we do take the energy justice angle very seriously. I think that is core to our campaign, and we’re lucky to have some really great activists that work on these issues that are close advisors to us. |
| John Farrell: | I know that you haven’t rolled out a ballot initiative yet necessarily on municipalization, which is where the fire usually gets drawn from utility companies. But are you facing opposition so far on this exploration of a municipal utility from anybody other than the utility, out of curiosity, and what are some of the issues that people are concerned about? |
| Greg Woodring: | I mean, obviously utility has been oppositional, but there hasn’t been a lot of direct spending, like you’ve mentioned, just because we haven’t really started the ballot initiative yet, but there has been some hesitation within elements of the city. I think a lot of it is about just the scale of the challenge of municipalizing. There’s this certain feeling of are we going to spend all of this time and energy and money on this campaign that ultimately isn’t going to turn out, that DT could defeat things like this? And that’s an understandable concern. I think that that’s a concern that it’s our obligation as a campaign to try to put at ease by showing that we’re serious, that we’re going to continue to work on this and that we’re setting up for a campaign that could win. And I think that we’re making progress on starting to assuage those fears. I think the movement that we’ve seen in the last couple months from the city goes to show that I think the city is really starting to move on this issue and starting to believe that this could be possible, which is really inspiring to us and exactly, I think, where we need to be getting. |
| John Farrell: | So speaking of that uncertain outcome, most of the public power campaigns in the past decade or two have not ended with a public power takeover even against some utilities, like in Maine most recently, with an absolute terrible record of both high bills and poor service. What is it that gives you hope that Ann Arbor can be different and can be successful? |
| Greg Woodring: | Yeah, I mean, that’s a fair question. First I’ll say that I don’t think that you get anywhere without trying. Maine fought a great campaign, but ultimately wasn’t successful. However, there was some good things that came out of it. They also passed on that same ballot, a proposal that bans foreign owned companies from spending on their elections, which just so happens in Maine, that their utilities are foreign owned. And I know that there is certainly some amount of desire to run this again, and I think that you will see another campaign come out of Maine, and I’m very hopeful that they’re going to be successful there. But yeah, it is a really tough campaign. It takes a very serious effort to be able to do this. You need to have a city that is taking this seriously, that is well staffed, that is going to be able to do its due diligence, that that has good legal advice and is not going to be making mistakes that lead to excess litigation.
And you also need a strong community grassroots effort and a population that’s willing to do it. I think that Ann Arbor is a prime place for a campaign like this. Ann Arbor is a city that very much likes to pride itself on its progressiveness, it’s home to University of Michigan, which the students for the Democratic Society were founded out. There’s a strong spirit of social progress within Ann Arbor that I think helps motivate our campaign. And on top of that, we are really experiencing a utility in decline. I mean, maybe not financially, but certainly in terms of their infrastructure. When we started this campaign, we could not have believed that DTE’s service quality was going to deteriorate so quickly. DTE already wasn’t a very reliable utility when this campaign started. However, the last few years have really gotten bad. By some metrics I’ve seen that were DTE is the second worst utility in terms of reliability in the country, and we’re also paying about 21% above the national average for electrical bills. So I think that the fundamentals of why you would want to municipalize are very much in our favor. We’ve got a strong climate commitment along with the population of people that are very climate focused, that just recently last year voted to raise their taxes by a total of $7 million a year just to spend on climate. And this is an area where we can allow a city to take action on climate that ultimately is actually going to financially benefit a city by ultimately lowering costs, at least in the long run. And on top of that, something just needs to be done. I think that there really is a strong feeling within Ann Arbor that level of reliability that we’re seeing from DTE is unacceptable, that we cannot continue to be living like this. And there really isn’t a legal option for us, especially because of that franchise agreement deal, where we’re not allowed to get off DTE unless DTE sells us. Municipalization is the only real option. We have to increase our reliability. And so I think that even the people who have are kind of skeptical of our ability to succeed at this, at the city’s ability to run a utility, things like that, I think they’re coming around to the feeling of, well, we’ve got to at least do something and this is an actual plan that can provide us better reliability. |
| John Farrell: | In your experience working on this, Gregory, what advice would you have you developed that you might give to other folks who are competing for public power across the country? |
| Greg Woodring: | I would say that there have been more times that I can count that I thought we were facing problems that there was no way that we would overcome them, that these were intractable problems that were going to kill the campaign, and for some reason we decided to keep going. And every single one of those times we ended up pushing past those problems and continuing to find progress. So I would just say that you need to be tenacious in a campaign like this, and you need to be a little bit stubborn and maybe a little bit foolhardy because this is a very difficult thing. It doesn’t happen very often, and there’s a reason for that. It’s really, really difficult. So if you want to be successful at this, then you just need to be willing to keep trying.
And I would also say don’t let anybody else set your pace. You need to make sure that you are willing to go in this for the long run and that you are going to take all the steps that you need to take to make this successful. Don’t let people slow you down, not unnecessarily. Push for things to go as quickly as they can, but at the same time, you really need to just buckle in and accept that this is a multi-year process. It’s probably a decade of your life that you’re putting in towards this, and maybe you’re not going to be through all of it, but someone’s going to have to, and you’re going to need to be prepared to pass the torch if that’s the case, because it’s a hard fight. But in my opinion, as someone who has already spent a little over four years of my life on this and plans to spend a considerable amount more, it’s worth it. This is one of the few ways that I’ve seen, at least that I feel, like it can really tangibly affect the climate crisis. I think that this is, climate crisis is one of those things where it just feels so much bigger than us all the time. So many people have all of this type of climate anxiety, this worry and this feeling of helplessness. And I was one of those people. I was someone that felt like this is this existential threat that there’s nothing I can do about. And well, I still believe it’s an existential threat. I don’t feel like it’s something I can’t do anything about anymore. And I sleep a lot sounder because of it. So if that sounds like you, I would recommend looking into something like this and starting this fight because it’s really the only way that I’ve ever found to make those feelings go away is to start doing something about it. |
| John Farrell: | Well, Gregory, thanks so much for taking the time. I really appreciate it. I’m excited to share the story of your work, and it’s real inspiration for those of us who have dabbled in this ourselves. I was 10 years ago in Minneapolis working on a municipalization fight that took an interesting turn and is still developing interesting results. So I really appreciate and can understand the value of the work that you’re doing. |
| Greg Woodring: | Thank you so much, John, and I really appreciate the work that you do. Institute of Local Self-Reliance is a fantastic organization that I much appreciate. |
| John Farrell: | Thank you so much for listening to this episode of Local Energy Rules with Gregory Woodring, president and founder of Ann Arbor for Public Power. On the show page, look for links to the video interviews with Gregory about the Ann Arbor effort and the website of Ann Arbor for Public Power. We’ll also share links to ILSR’s Voices of 100% podcast series that explored how cities with ambitious clean energy goals could achieve them, as well as ILSR’s Public Power Podcast series, a six episode deep dive into public power campaigns, their hopes, their limitations, and their achievements. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening. |
Ann Arbor is Trapped in a Bad Contract
Thanks to Michigan’s Foote Act of 1905, Ann Arbor has been locked into a franchise agreement with its investor-owned utility for more than a century. While the law prevents Ann Arbor from renegotiating its contract or finding a new electricity provider, the city could still provide electricity service to its own territory. Ann Arbor for Public Power is a coalition advocating for the city to do just that.
DTE Energy, Ann Arbor’s incumbent electric utility, provides unreliable service at a premium. Woodring describes how a publicly-owned utility could better serve Ann Arbor, since it would have access to low-rate financing and no profit motive. A public utility would also stay out of local and national politics.
How is it that [public] utilities are able to charge less rates for considerably a lot higher reliability? Well, it’s because it’s just a more efficient system. It’s not like they’re some utopia. It’s not like they have the best government in the world. Their roads are just as bad as Ann Arbor’s. However, the structure of the utility is more efficient.
Something’s Got to Give to Achieve Ann Arbor’s Goals
Ann Arbor has a goal for community-wide carbon neutrality by 2030, but Woodring is skeptical of any pathway to this goal with DTE as the local electricity provider. Right now, the city’s plans include participating in a carbon offset program and potentially launching a sustainable energy utility. A municipal utility, counters Woodring, could more concretely reduce emissions and increase reliability.
Ann Arbor has completed a phase one municipalization feasibility study. Woodring believes the acquisition costs are reasonable, but the estimated legal costs are overblown. A phase two feasibility study, which Ann Arbor has allocated the funds to run, could hone in on the cost of municipalization.
There really is a strong feeling within Ann Arbor that the level of reliability that we’re seeing from DTE is unacceptable… Municipalization is the only real option. We have to increase our reliability.
Episode Notes
See these resources for more behind the story:
- Watch a video interview with Gregory about the Ann Arbor effort and explore the website of Ann Arbor for Public Power.
- Listen to episodes from ILSR’s Voices of 100% podcast series, which explores how cities with ambitious clean energy goals plan to achieve them.
- Listen to a six-part special series of Local Energy Rules: The Promise and Peril of Publicly-Owned Power.
For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.
Explore local and state policies and programs that help advance clean energy goals across the country using ILSR’s interactive Community Power Map.
This is the 207th episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares stories of communities taking on concentrated power to transform the energy system.
Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.
This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.
Featured Photo Credit: iStock
