Overview
- In March 2025, Ann Arbor’s City Council advanced a landmark ordinance formally establishing the Sustainable Energy Utility (SEU), following overwhelming public approval of Proposal A. This move operationalizes a decentralized, community-owned energy model designed to enhance climate resilience by integrating solar and battery storage directly into local infrastructure. As one of the first U.S. cities to attempt such a utility structure, Ann Arbor's initiative represents a transformative shift in municipal energy governance and a potential blueprint for other cities confronting grid instability and climate challenges.
- In November 2024, Ann Arbor residents passed Proposal A, leading to the creation of the SEU. This community-owned utility aims to provide 100% renewable energy from local sources, including solar and battery storage systems, installed at participating homes and businesses. The SEU is designed to supplement the existing grid, offering residents an optional, affordable, and resilient energy solution without the need for significant upfront investment. (Sources: City of Ann Arbor+2City of Ann Arbor+2EBS PublicNow+2City of Ann Arbor+2EBS PublicNow+2City of Ann Arbor+2)
- The SEU is intentionally designed to promote inclusivity, extending access to clean, renewable energy across all segments of the community—including renters, low-income households, and those with rooftops ill-suited for solar installations. According to recent estimates, the cost of installing a typical 6 kW solar system can range from $17,000 to $20,000 before incentives. However, by eliminating upfront costs and integrating battery storage, the SEU allows residents to benefit from solar energy without the financial burden, offering significant long-term savings on energy bills.
- While DTE Energy is investing $360 million to modernize Ann Arbor's grid infrastructure, including the installation of smart grid technology and the rebuilding of electrical networks, the SEU provides an additional layer of resilience. Decentralized energy generation and storage ensures neighborhoods can remain powered during outages, complementing DTE’s efforts to enhance grid reliability. However, this approach has sparked controversy for DTE, as the SEU’s focus on local, renewable energy solutions challenges the traditional utility model the company relies on and could reduce reliance on the centralized grid, potentially impacting their control over energy distribution and long-term business strategies.
- Other Michigan municipalities, like Meade Township and Big Rapids, are exploring similar decentralized energy solutions, but the push for community-owned energy faces challenges, particularly at the state legislative level. While the Michigan Public Service Commission’s authority over large-scale energy projects has sparked local pushback, including from municipalities seeking more control, bills like Senate Bills 152 and 153 are slowly advancing the conversation on community solar. Ann Arbor’s SEU, however, remains a beacon for municipalities looking to strengthen energy equity and resilience.
Transcription
David Fair: This is 89.1 WEMU, and welcome to this week's edition of Issues of the Environment. I'm David Fair. And it was back in November, that voters in Ann Arbor approved creation of an SEU. That stands for Sustainable Energy Utility. It's to be a supplemental utility generating power from 100% renewable sources to work alongside DTE's services, but it's a long trip from the ballot box to the fuse box. And we're curious as to how the project is coming along and when city residents will start taking benefit. There's no one better to ask than Missy Stults. Missy is Ann Arbor's Director of Sustainability and Innovations, and thanks for making time for us today, Missy! Always good to talk with you!
Missy Stults: Oh, David, it's always such a pleasure! Thank you for caring about the topic and the opportunity to be here!
David Fair: Well, as I mentioned, Ann Arbor is moving forward with its plan to become carbon neutral and to create a sustainable energy utility. I want to step back a moment to March 4th of this year. That's when Ann Arbor City Council advanced the voter-approved SEU by formally passing the ordinance authorizing its creation. What did that vote set in motion?
Missy Stults: Yeah! Actually, so that was the first read. The adoption of the SEU was actually on April--let's get this right--April 7th was when they formally adopted the SEU's enabling ordinance, which means it exists. It was sort of like, well, 10 days after the ordinance to be technical. So, April 17th is the first day of the SEU. It is now an existing department of the city. It does not have any staff. It does have a budget, but it exists in paper. And this is really important because it allows us to do the next things. It allows us to hire the executive director. It allows to have an entity of the city that we can go to markets with and say, "Look, this exists." It's been authorized by our council. Our voters have authorized it. We can then therefore take on debt. So, it was essential for effectively creating the governance structure and the box that is the SEU.
David Fair: Well, before we get into more detail of where we are and where we're headed, I do want to stay on kind of those city council moments. There are members of the community who want to go further than an SEU and have an entirely municipally owned and operated utility. And they've asked City Council to authorize a nearly $2 million feasibility study on separating and moving away from DTE by purchasing some of the utility's infrastructure. That measure failed to pass City Council on a 5-5 vote with one council member absent. As Director of Sustainability and Innovations, would you have preferred the city move forward with that study?
Missy Stults: You know, I actually am sort of agnostic to what we do. From a very practical standpoint, being on the other side of it, it would have been incredibly challenging to manage launching a new utility, the sustainable energy utility, while also managing the technical analysis that was coming. That's a lot. That would have meant a lot of my time would not have been invested in other things that we're doing in the office. So, if that was what Council had chosen, that would have been fine. But on the other side of it right now, I am actually quite thankful that I can really focus time and attention on the existing things we're trying to stand up. So, it doesn't mean it's not a good idea, but...
David Fair: The group Ann Arbor for Public Power doesn't feel done with the issue. It is considering a petition drive to put a community-owned, municipally operated utility before voters. If that should come to pass, would that put the work you're doing now on the SEU on hold?
Missy Stults: Well, I don't know. I think a lot of that depends on what exactly the ballot initiative says. There's so many ways that that language could look and how it could move. But from a sustainability vantage, our A2Zero plan does not have municipalization of one of the actions. So, that would almost certainly not be me or my department working on a muncipalization effort.
David Fair: Well, our Issues of the Environment conversation with Missy Stults continues on 89.1 WEMU. She serves as Ann Arbor's Director of Sustainability and Innovations. Let's add to the conversation some other elements for consideration. DTE says it's investing $360 million to modernize Ann Arbor's grid infrastructure. As I understand it, that will include some smart grid technology and the rebuilding of some electrical networks. How does that boost the effectiveness of a functioning SEU?
Missy Stults: Yeah. Well, our grid, as every Ann Arborite knows, or anyone who works in Ann Arbor knows, it's weak. Yeah, it's a vulnerable grid. So, it needs investment. There's just no question about that to be able to function at a base level. So, we are glad to see those investments coming into play. And we also know that that is not going to be sufficient. We are electrifying our vehicles--the fastest in the state. We're electrifying our homes, our businesses, our houses of worship, our commercial centers faster. That is going to increase demand on that stuff. This is where the SEU plays a really essential, critical role in helping make sure that we can power that additional demand and some of our existing demand from renewable energy in a resilient, reliable, and hopefully affordable manner. And so, that's really, really critical. So, these things are not necessarily in conflict. They could, in fact, help us reach our goals quicker than anticipated. And getting back to what you led with in terms of a municipalization effort or takeover effort, the fact that we could have a functioning grid actually is more enticing to me than owning a grid that is not working.
David Fair: As we look to that potential, are you working with DTE directly, so that, ultimately, the SEU in Ann Arbor and DTE's localized system upgrades are truly supplements and don't have costly overlap?
Missy Stults: Yes. And I would say we've seen a shift in....well, maybe that's too strong. We've seen an interest in DTE having really, I think, meaningful and collaborative conversations around how the SEU can be of benefit to the centralized grid. And we did design the SEU assuming there would not be any collaboration because we needed to prove that it could work in sort of a worst-case scenario. So, what we're seeing is a good scenario where there might actually be a lot of collaborative opportunities there to lessen that strain on that centralized grid, which means less costly investment. Some of the smart grid technology we do challenge in Ann Arbor sometimes. I don't want to see smart grid technology if you're not maintaining your existing infrastructure, right? So, there's a balance here that you see from the city. We haven't talked about this, but we do get quite active in regulatory cases. So, they just filed a new rate case. We're reading that right now. We certainly will be intervening in that case making sure we're watching what it is they're saying they're going to spend money on to ensure that's absolutely necessary because we do not want our rate payers to have to see higher costs for luxury items when their basic needs aren't being met.
David Fair: While you're watching the rate case move forward, I'm curious as to and how quickly you can get to the governance infrastructure necessary to fully launch an SEU.
Missy Stults: We're telling the public from January 1, it's going to be roughly 18 months until they see service from the Sustainable Energy Utility. Where we are right now, if anyone's curious, I'll give kind of an overview, but we do have a waitlist, which is not your subscribing. It is you want to know about the SEU. And we send updates roughly every two weeks. And they're short, like kind of bullet points of what's happening. So, if you want to stay in the know, pretty up to date with the SEU, please subscribe on our website. But where we are right now, we have hired a firm to help us find the first executive director for the utility. We are close to reviewing applicants for that. Hopefully, we'll have someone this summer that can start. That's a really important thing because, right now, I'm holding a lot of that water. And to be fair to folks, that's not fair for them as well because I've got to also maintain this whole Office of Sustainability and A2Zero initiative. So, we've got some consultants who are working with us but this will be key to have a dedicated--our first dedicated--staff person moving the utility forward. We are also working on all the technical specifications, so that we can go to bid. We can do the rate model, the final rate model, because we understand exactly what the costs are going to be for the solar system, the storage system, and the interconnection, the inverters, all of the additional billing systems that we're going to need that support this. So, we are doing a lot of the groundwork, which may not feel really enticing, but it's key to the foundations of the SEU, right? How are we going to build? What is the meters going to look like? Those are the key questions we're trying to answer right now.
David Fair: There are many communities throughout the country that have SEUs in operation. Is it going to be a requirement of whomever comes to Ann Arbor and fills that position to have experience directly in that realm?
Missy Stults: No. So, here's what's kind of interesting. There are two other sustainable energy utilities in name that exist: D.C. and Delaware. They are not what we are. So, they are important. Mostly, they do a lot of really important energy efficiency work. The sustainable energy utility we're creating is truly the first of its kind that is doing supplemental energy services only from renewables. Sure, there's energy efficiency, but generation is pretty key, meaning having solar or wind or geothermal that actually generates the electrons we're using. That's really at the heart of this. So, we need someone who knows how to run utilities and who's experienced in understanding how utilities function. So, that's not just an SEU. We're kind of casting a really wide net to understand who not only understands utilities. Who understands Ann Arbor and who's excited? This needs to be a creator, right? This isn't just stepping into a utility and maintaining it. You are creating something with us, and that's a really exciting moment but also a different skill set than someone who maintain utilities.
David Fair: Well, you mentioned that Ann Arbor residents can get updates by signing up on your website. When can Ann Arbor residents actually sign up and become an official part of the SEU?
Missy Stults: Yeah. So, the waitlist right now is transitioning to what we'll call an "expression of interest." And we'll have that probably early June. And folks can sign up then. What will happen is we'll put you in the formal queue. And everyone who's already signed the waitlist, you're automatically moving to this expression of interest. That's helping us understand demand. And then, what will happen after that, as soon as we have the contracts let, we're going to do a formal intake. So, that's when we'll come. We'll look at a year's worth of your energy bills. We'll talk to you and understand what your critical energy needs are. Maybe you have medical devices that you can't lose power from. Maybe you're most interested in saving money. It doesn't matter. We want to understand people's different rationales for subscribing into the SEU. That's phase two. And that's when we actually design what your services will look like, and we give you a rate and say, "Do you want to subscribe for this rate?" That's going to happen in about a year from now. And then, as soon as you subscribe to that, you're getting the SEU access built. And so, you're a go at that point!
David Fair: I'm grateful for the updates, and I appreciate the conversation! Thank you so much!
Missy Stults: David, my pleasure! Thanks for caring about the SEU!
David Fair: That is Missy Stults, sustainability and innovations director for the City of Ann Arbor. And for more information on the SEU, stop by our website at WEMU.org, and we'll get you everywhere you need to go. Issues of the Environment is produced in partnership with the office of the Washtenaw County Water Resources Commissioner. You hear it every Wednesday. I'm David Fair, and this is your community NPR station, 89.1 WEMU-FM Ypsilanti. Celebrating 60 years of broadcasting from the campus of Eastern Michigan University!
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