Overview
- The infrastructure of Michigan’s power grid is aging and currently not capable of meeting the increased demand of an all-electric future. In addition, rates are increasing, and the goal to reduce man-made carbon emissions to combat climate change is advancing. Advocates for municipal or community power utilities in Ann Arbor believe that moving away from a centralized, privately held utility provider to one that is owned and operated by the local government or another state body will provide a better service to the public. They argue that a change in the ownership of the power supply is greener, safer and more effective, and provides more public benefits than a system that prioritizes profits. Ann Arbor for Public Power, a grassroots group from the city, is pushing the city to adopt such this strategy.
- Ann Arbor currently plans to adopt a strategy known as Community Choice Aggregation which some say is less risky and costly than a full switch to municipal power. Ann Arbor’s A2Zero plan aims for the city to be entirely powered by renewables by 2027. The CCA portion of the plan calls for spending to cover the costs of negotiating to buy clean energy from wind or solar producers on behalf of city residents and businesses, and bulk buys of battery storage. Rates for customers are expected to be similar to DTE’s rates. (Source: https://www.a2gov.org/departments/sustainability/Documents/A2Zero%20Climate%20Action%20Plan%20_4.0.pdf)
- Both strategies include reductions in GHG emissions. Detroit-based DTE, the current provider of power to Ann Arbor, has raised concerns about changes to the status quo. DTE owns the poles and wires that supply Ann Arbor, and they have plans to reduce coal-generated power and GHG emissions, albeit more slowly and to a lesser degree than what Ann Arbor hopes to achieve. DTE has committed to reducing carbon emissions to net zero across our electric utility servicesby 2050 and has reduced electric emissions by 25% from 2005 levels. DTE argues that the costs to shift away from natural gas generation and create infrastructure that relies on renewable sources like wind, solar, or geothermal are high. (Source: https://dtecleanenergy.com)
- Yousef Rabhi, House Democratic Floor Leader, 53rd House District (which encompasses Ann Arbor), is working on legislation to hold the energy companies accountable financially through a stronger outage credit, and he supports shifting towardmunicipally-owned utilities.
Transcription
David Fair: As we continue to see increasing impacts of climate change, determining our energy future is going to be increasingly important as we understand the need for change. We also know that change is hard. I'm David Fair, and welcome to this week's Issues of the Environment on 89 one WEMU. One of the changes under discussion in Ann Arbor and in other cities across the country is a move away from centralized, for-profit utilities and toward nonprofit, municipally-owned and operated power generation and distribution sources. Our guest today is having these conversations in his home district and at the state level. Yousef Rabhi of Ann Arbor represents the 53rd State House District and serves as House floor leader in Lansing. And thanks again for the time today. I do appreciate it.
Yousef Rabhi: Happy to be here. Thanks for having me.
David Fair: Well, I'm sure you know there is no easy or inexpensive way to build a greener and more sustainable energy future. But easy and cheap would certainly be nice, wouldn't it?
Yousef Rabhi: It sure would. Yeah, the time is now. The time is pressing, and we can see, even with days like today, where it's warming up in the middle of the winter, we need to act now.
David Fair: I'm not sure that most know this about you, but you've been involved in environmental action and strategy for a long time. You were exposed at a young age to environmental protection through the Adopt a Stream program. Then, after graduating from Huron High School, you went to graduate from the University of Michigan with a Bachelor of Science and Environmental Science and with a specialization in urban planning and ecosystems management. Now, that's a great foundation, to be sure, but as we pick up speed towards a new and more sustainable future, has the learning curve only increased for you?
Yousef Rabhi: You know, it's been a whole different set of challenges being a state legislator and trying to bring in viewpoints from all across the state and people that, you know, may not understand things in the same light that I do or may have different backgrounds and trying to navigate all that has certainly been a challenge.
David Fair: And part of your responsibility is to then communicate that to us in the public. And as it stands now, I think most of the public does have appreciation for the centralized energy systems provided by DTE and Consumers Energy. But there's also a healthy dose of skepticism when it comes to some areas of customer service and large scale commitment to greener initiatives. Since taking office and becoming a legislator, you've interacted with the utilities. What do you see that maybe we don't?
Yousef Rabhi: Yeah. So that's a great question, David. I appreciate this topic today. You know, so, as a legislator, I have led the charge on a number of environmental topics and introduced legislation to create a green energy future in the state of Michigan. And, unfortunately, at every step of the way, pretty much every single bill that I've introduced or that has been introduced regarding clean energy, the utilities have stood in the way of it. They've used their lobby power. They've used their money and resources in Lansing to swing their hammer against things like, for example, making it easier for people to put solar panels on their roofs. They have fought against that tooth and nail. So, they're using their power and influence not to create change on the environmental front, but to keep the status quo, so that they can control the system, they can control the messaging, and they can control their profits. That's what this is all about at the end of the day.
David Fair: This is 89-1 WEMU. We're talking with state Representative Yousef Rabhi of Ann Arbor on Issues of the Environment. In exchange for essentially giving those utilities monopolies, they do agree to regulatory oversight, but the Public Service Commission always also guarantees them annual profits. That's just built into the way the system is structured. In your opinion, is that appropriate incentive to get the utilities to expedite a shift to more pervasive renewables?
Yousef Rabhi: I think the major problem with our utilities right now in Lansing is the amount of influence that they're able to wield through their campaign contributions and their dark money accounts. They can use their corporate dollars to influence elections, and they have, to the tune, I believe in 2018, they used about $50 million of our money that we pay in rates they use to influence elections across the state to get people elected, frankly, that would support their agenda. And so, to say that they're a regulated monopoly is a little bit misleading because they are essentially the fox guarding the henhouse. They have been able to influence and sway elections to the point where legislators are afraid to hold them accountable and to push legislation that they oppose, such as green energy legislation.
David Fair: So, that's what makes perhaps a not-for-profit, municipally-owned power source so attractive as Ann Arbor is now considering and others around the country are as well. Now, Ann Arbor is looking at either a municipally-owned, not-for-profit operating system or what is called community choice aggregation. How does that option work?
Yousef Rabhi: Well, I think, you know, we're looking at municipalization is really the best option here because municipalization is currently allowed under state law. There's nothing that really needs to change. And, actually, with community choice aggregation, there are still some tweaks that need to be made to state law to allow that to happen at the local level. But, there are actually many cities across the state that already have their own municipal utilities, such as the city of Lansing, even in Washtenaw County, we have the city of Chelsea. And the other thing that I would mention too, David, is when you look at reliability of our energy grid, municipal utilities fare better. When you look at the data, they restore power faster. There are less outages. And, frankly, if you look at those municipal utilities, the rates are generally lower than what we pay to these for-profit entities, because a portion of what we pay in our bill is going to their profits, which hovers around 10 percent. Between Consumers and DTE, they pulled in $2 billion of profit in 2020. And that's our money that they're taking.They're sending back to their Wall Street investors. They're not reinvesting that money in the grid. That's all money that's leaving our state. That's leaving our pockets. If we had a municipal utility, all that money would stay local. It would be invested in the grid, and it would be invested in a green energy future.
David Fair: And yet, if you listen to the messaging from the utilities, they believe that the overall investment that would be required would ultimately end up meaning that there is little, if any, reduction and energy burden on the customers of a given municipality.
Yousef Rabhi: Well, I think that messaging is intended, again, to protect their bottom line, because, of course, they don't want us to remove ourselves from their system because then we won't be paying them their guaranteed 10 percent profits. What a municipal system does is it allows us to control our energy future and make the decisions that we need to make from the environmental perspective, but also from an accountability perspective. If there are too many outages, we can hold our elected officials and our, you know, municipal power authority officials accountable, because they are accountable to us directly through a democratic process. Unlike the DTE and Consumers of the world that are completely unaccountable because they've, you know, spread their money around Lansing and are able to basically sway the process in their favor, basically at every turn. And so, that's really the difference of what we're talking about here. Is it going to be a significant investment? Probably. But the reality is that we're paying that already out of pocket. We are paying higher rates than we need to be paying right now. We are sending between Consumers and DTE $2 billion away from our system, not investing that money locally. We could be turning those dollars around into that green energy future. And I just want to say too, David, that, you know, what the utilities have been announcing in terms of their own green energy goals is what I would call greenwashing because what they have said is that they want to create by 2050, they want to be net zero. Net zero, unfortunately, is a very misleading term because it basically means that they can still emit carbon as long as they buy carbon offsets somewhere. And, in fact, they have been reinvesting more and more and more dollars in natural gas, which is not a clean fuel. It is a fuel that is massively dangerous for the environment. Methane gas is actually a worse greenhouse gas than CO2. And even though the point of emissions that a lot of these natural gas facilities are lower, what the reality is that along the pipeline and at the extraction sites of natural gas fracking wells, the emission rates are actually very high. There's a lot of natural gas that's lost into the atmosphere, which causes an increase in the greenhouse gas effect. So, these utilities are actually perpetuating and furthering, you know, our climate change woes by redoubling down on this investment in natural gas. And their goals that they're stating, you have to read the fine print, because more often than not, they are misleading and greenwashing. They're not actually making true sustainable investments in a green future.
David Fair: Once again, we're talking with Yousef Rabhi on 89 one WEMU's Issues of the Environment. You had mentioned the reliability and the sustainability of the power grid and the investments that takes to maintain, and that we might be better off with a municipal system. Does that take into account grid security in total, everything from cyberattacks to power outages? Are local governments well-situated to ensure the degree of security that and consumers provide at this point?
Yousef Rabhi: In fact, I think they're better situated in many ways. What we can do is create some redundancy in the grid. That's why I'm so supportive of things like home solar, being able to install solar panels on your own home. And again, DTE and Consumers have been fighting against every piece of legislation we've introduced. There's a one percent cap on distributed generation solar panels in the state of Michigan. We've been trying to increase that. The utilities have been fighting back. We've been trying to make it so people get reimbursed more for their solar energy. The utilities have been fighting back. And the reason that they're fighting back is they want to control their power. But, if you look at areas that have municipal utilities, such as Lansing, they allow for people to install solar on their roofs. And, in fact, they're giving incentives. They're giving out $2000 per household that wants to install solar on their home. That's a municipally-owned utility. That's prioritizing green energy. That's prioritizing home solar. And why that's important to your question is if we can have distributed generation across the state, even if there is a cyber attack that takes down a power plant. If we have distributed generation on everybody's roof, we can power the grid. Still, even though one plant is down or another plant is down, we can still create that redundancy in our system, so that we're not relying on one power source or on two large power sources. And, in fact, when you look at these larger systems like DTE and Consumers, the possibility that they can be attacked and take out large swaths of power for, you know, large numbers of people is much higher.
David Fair: There is a lot of work to be done and a lot more conversations to have, so I will look forward to our next.
Yousef Rabhi: Excellent. Thank you, David, for having this conversation. I really appreciate you.
David Fair: That is 53rd District State House Representative Yousef Rabhi of Ann Arbor. He also serves as House floor leader in the Michigan House of Representatives. Issues of the Environment is produced in partnership with the Office of the Washtenaw County Water Resources Commissioner, and you hear it every Wednesday. I'm David Fair, and this is 89 one WEMU FM and WEMU HD1 Ypsilanti.
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