Overview
- When Senator Jeff Irwin talks about virtual power plants, he’s not just talking about clean energy — he’s talking about who controls electricity on Michigan’s grid. The legislation he introduced in December 2025 would allow rooftop solar panels, home batteries, electric vehicles, and smart appliances to be aggregated and dispatched together, effectively shifting some operational control away from centralized utilities and toward customers and third-party operators. Supporters frame this as efficiency and resilience, but structurally, it represents a quiet redistribution of power in Michigan’s energy system. (Source: https://senatedems.com/irwin/2025/12/09/virtual-power-plants/)
- The push for virtual power plants (VPPs) is happening as Michigan prepares for a wave of new electricity demand that could reshape the grid. Utility planning documents show Consumers Energy evaluating up to 15 gigawatts of potential data center load, with DTE Energy acknowledging interest in roughly 7 gigawatts more. Analysts cited in reporting warn that a single one-gigawatt data center could increase residential electric bills by five to ten percent if infrastructure costs are passed on to customers. Lawmakers backing VPPs argue that coordinating existing distributed energy could help absorb that growth without building new fossil-fuel plants. (Source: https://planetdetroit.org/2025/10/data-centers-michigan-power-costs/)
- In Irwin’s own district, the virtual power plant concept is already moving from theory to reality. In Ann Arbor, the Veridian at County Farm development was designed as a net-zero, all-electric community that uses solar panels, battery storage, and smart controls to function like a neighborhood-scale power plant. Public radio coverage has highlighted the project as a model for how distributed energy could support climate goals while reducing strain on the grid, aligning with Ann Arbor’s 2030 carbon-neutrality target and Washtenaw County’s broader environmental commitments.
- Environmentally, supporters say virtual power plants could reduce reliance on fossil-fuel “peaker plants,” which are among the grid’s most polluting generators and are typically used during heat waves or emergencies. That makes VPPs attractive to lawmakers trying to meet Michigan’s mandate for 100% clean energy by 2040. At the same time, critics warn that without careful design, the financial benefits may flow mainly to households that can afford solar panels, batteries, or electric vehicles, raising equity concerns, along with questions about data privacy and consumer control over energy use.
- Whether virtual power plants become a meaningful part of Michigan’s grid may ultimately come down to utility politics and money. Senator Sue Shink has said publicly that if utilities oppose the legislation, it is unlikely to advance — a reflection of the influence companies like DTE and Consumers Energy hold in Lansing. That influence is under growing scrutiny, with advocacy groups pushing a 2026 ballot initiative to ban political contributions from regulated utilities, arguing that utility money skews energy policy decisions. As a result, the debate over virtual power plants is also a debate over who shapes Michigan’s energy future.
(Source: https://www.bridgemi.com/michigan-government/michigan-groups-aim-ban-political-spending-dte-consumers-state-contractors/)
Transcription
David Fair: This is 89.1 WEMU, and we continue to look at what our energy future will be and how it's going to be shaped and controlled. I'm David Fair, and this is Issues of the Environment. State Senator Jeff Irwin is an Ann Arbor Democrat and a proponent of virtual power plants. It would shift part of the operational control away from centralized utilities, like DTE and Consumers Energy, and toward consumers and third-party operators. That may sound a bit futuristic, but examples already exist. Now, can it win enough support to be built out to scale? That's a big question! That's why we invited Senator Irwin to be our guest today. And thank you for carving out some time for us! I appreciate it!
Sen. Jeff Irwin: No, thank you for your interest!
David Fair: Now, for those who are unfamiliar with the term "virtual power plant," what exactly are you referring to?
Sen. Jeff Irwin: Well, this just refers to any system or program that is aggregating energy resources or reducing demand in ways that are reliable and deployable.
David Fair: So, I mentioned that there are examples. Would you consider Veridian at County Farm as one of them?
Sen. Jeff Irwin: Yeah, that's actually a project that's trying to put together that kind of operation on a site. Another thing that people might imagine is if you had a whole bunch of neighbors who all had batteries in their homes or maybe even all had electric vehicles who they were willing to use in a certain way, that battery capacity, if it was all working together and deployable together, could be a resource that could help us save money.
David Fair: Now, to look at it in a broader scale, the City of Ann Arbor is ramping up its Sustainable Energy Utility as a supplement to what DTE provides for electricity. Would you consider that a part of the vision?
Sen. Jeff Irwin: Well, I think i may be a part of the broader vision of how do we reduce pollution and save money, but I don't think it's necessarily tied to this idea of a virtual power plant. A virtual power plant is really just saying we know that the cheapest energy is the energy we never use. We know that the energy we never use isn't going to pollute our environment, so, let's try to use less. And if we can find a way to be smarter and to deploy our energy resources in ways that just save money and reduce pollution, let's do that! That's what this idea says is let's put together some of these technologies at a use of management techniques to reduce our overall cost and reduce waste.
David Fair: Well, let's talk about another component of why the idea of virtual power plants are so attractive to you and some of your colleagues, including State Senator Sue Shink of Ann Arbor. The major centralized utilities have a virtual monopoly at this point. They're guaranteed a profit, they're beholden to shareholders, consistently raise rates and have less than desired reliability records. Have I summed that up correctly?
Sen. Jeff Irwin: Yeah, look. I think we've got some of that dirtiest, most expensive, least reliable power companies in the country, and that's been frustrating to the people of Michigan for a while now.
David Fair: What concerns do you have about the relationship the centralized utilities have to the explosion of data center businesses here in Washtenaw County and around the state?
Sen. Jeff Irwin: Well, data centers already use so much energy. And so, we have to be really, really careful making sure that they don't use so much energy that then the power companies are pushed to go out and invest in a bunch of new power plants that we aren't going to need necessarily long-term. That's how this could become expensive for ratepayers, and we need to make sure that we follow through on the law that says that residential ratepayers can't pay for these data centers.
David Fair: So, that leads us back to the question I was actually getting to, which is, by creating then a network of virtual power plants, how great an offset from centralized energy grids is possible?
Sen. Jeff Irwin: Well, I think we can bite into bigger and bigger chunks of what's needed by doing these kind of smart-demand responsive systems and the smart energy efficiency and conservation systems and these energy storage systems. All of these can be used to reduce the amount of overall power generation we need in our state. And, look, I've been on your show many times, and you know how frustrated I get about pollution and about the health impacts about how our energy use can destroy our environment, not just for us, but for generations to come. The other thing that really makes people frustrated, though, is looking at their energy bills. We're looking at our energy bills this winter, and we're seeing them go crazy, right? And so, this is a way that we can put people to work in our state, deploying smart technology resources to reduce our energy bill and reduce the amount of pollution that we're putting into the environment. Does that help wean us off of these power companies that we're frustrated with? Yes. But for me, what's most important is this can save people money and reduce pollution.
David Fair: Our Issues of the Environment conversation with State Senator Jeff Irwin continues on 89.1 WEMU. Now, there's a cost to everything, including creation and implementation of virtual power plants. Have you done an analysis of upfront cost to launching a viable network?
Sen. Jeff Irwin: Well, this is going to save people money. That's the whole point of the legislation. And what the legislation says is that we're only going to deploy and approve these types of investments if they pencil out and they save people money. So, that's what this is all about. Let's find some of these projects that we can do in our communities, whether it's tying together new distributed generation resources, or whether that's tying to gather storage, or whether that's tying together reliable conservation techniques. We need other things you can do that reduce costs, reduce pollution, and put people to work doing it. And we only do the projects if they make sense financially. So, that's what this is all about.
David Fair: Is the skilled workforce already available to implement these kinds of networks on any kind of mass scale?
Sen. Jeff Irwin: We do have the skilled workforce to get this done, but I think that if we start moving down this road of being smarter and using more technology with respect to energy, then we're going to need even more of that. And I think there are opportunities, through our great trade unions and also through our great community colleges, to get more people trained up in this space, because I think we're going to see more and more opportunity in energy conservation, in energy waste reduction and in renewable energy deployment. So, we have the workforce, but we need to build more because there's so much opportunity in this.
David Fair: The state of Michigan has set a requirement of attaining 100% clean energy by 2040, Washtenaw County working to become carbon neutral by 2035, and the City of Ann Arbor by 2030. Now, just building out a virtual power plant network would take longer than that to achieve mass scale, right?
Sen. Jeff Irwin: Yeah, this is really an iterative process, right? It's not something that you flip the switch and it's done right away, and it's not something that it's just one project. It's many projects building on top of each other over many years. And so, yeah, I see this as something that could provide a small benefit right away as we take advantage of some of the low-hanging fruit with energy efficiency and waste reduction, but this is something that would grow over time.
David Fair: We haven't talked about perhaps one of the biggest barriers to virtual power plants, and that is money and politics. The utilities have a lot of lobbying money and a good deal of power and sway. The goal is to continue generating profit while maintaining control of the electricity grid. Is there a pathway in your mind to getting the utilities on board and serving as large-scale partners instead of competitors and adversaries?
Sen. Jeff Irwin: Well, I'm not giving up, right? When I look at what's happening to our air and to our climate, it's easy to get frustrated to think that there's no way to win against industry. And when you look at the pollution that is caused by industry's money and politics, it can similarly be very, very frustrating. They have great influence, and it's been tremendously challenging to fight against the influence and interest of the polluters. But we're going to continue working on it. Senator Shink and I are going to continue pushing back against this because we know what's in the public interest: reducing pollution, reducing cost. It may not drive up their profit, but it's definitely in the public interest. And we're going to keep working with every one of our colleagues who will work with us to get that done.
David Fair: And the proposal you are putting forward, is that fully contained within the state budget, or would we have to consider a tax or bond issue to make that kind of bigger investment?
Sen. Jeff Irwin: It wouldn't require any additional money. Once again, we're talking about unlocking opportunities to reduce cost and to save money. If there's any upfront cost to building out one of these networks, that's going to be falling on the private interests who put together the system, who put together the energy waste reduction system or who aggregate the demand response system. So, no, there's no upfront public investment.
David Fair: So, what is next in your process in the Senate and Senator Shink putting this idea before the public and potentially into state policy and law?
Sen. Jeff Irwin: Well, the first step is a committee hearing. We're going to have an opportunity to talk about this idea in front of the public, have an opportunity to lay out how this is a way to save money, reduce pollution and put people to work doing it. And that's going to be a pretty compelling message, I think. I'm sure we'll also hear from some of the folks on the other side of the issue, the utilities who want to make sure that customers are locked within their walled guard. And now, we'll have that debate in the Legislature, and, hopefully, that will go really well and will propel this issue forward to a vote in the Senate. And then, of course, if that happens, we've got to get it through the House as well and past the Governor. And so, we're still on the first step here of getting it through the Senate. But I'm hopeful that well this is the sort of issue that when you get it out there into the public, it only gains more support because liberals, conservatives, Democrats, Republicans, everybody wants to save money. Everybody wants to stop wasting energy and stop wasting money. And so, because waste is so unpopular, that would give me hope that maybe we can be successful with this waste reduction idea that not only helps us stop wasting money but also helps us stop wasting our environment.
David Fair: Well, I thank you so much for taking time to discuss the concept and realities of virtual power plants. I'm most grateful!
Sen. Jeff Irwin: Yeah, thank you!
David Fair: That is 15th District State Senator Jeff Irwin, a Democrat from Ann Arbor, and our guest on Issues of the Environment. For more information on virtual power plants and our conversation, head to our website at WEMU.org. 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, and you hear it every Wednesday. I'm David Fair, and this is your community NPR station, 89.1 WEMU Ypsilanti.
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