ANN ARBOR, Mich. (CBS DETROIT) - The city of Ann Arbor is positioning itself to provide its own public utilities and potentially move away from DTE.
The effort was prompted by an organization called Ann Arbor for Public Power.
"It's the only real path forward we have solving this issue," said Greg Woodring, the president and founder of Ann Arbor for Public Power.
Woodring said the issues are many, including unreliable power, extended power outages, and the rising cost of utilities. He believes municipalization of energy services could solve these issues.
"Forty-two Michigan cities all have public power utilities, and they all enjoy lower rates and have higher reliability, and the reason is not hard to understand. DTE is a for-profit company and every dollar that is going towards infrastructure is a dollar that is not going towards shareholders. Public power utilities have a different incentive structure, and so yes while we would be acquiring some infrastructure that's not in the best shape, we would be able to actually start to improve it. We be able to put 100% of our bills towards utility rather than paying 14% out to shareholder profit which we currently are doing with DTE," Woodring explained.
"They want resilient power, they want reliable power, and they want affordable, clean power," said Missy Stults, the Sustainability and Innovations director with the city of Ann Arbor.
The city, along with consultants, completed a feasibility study back in September and laid out several ways it could achieve its zero carbon emissions goals. The study stated that it would be most attainable by combining multiple energy options.
It did not however, conduct an analysis to quantify the cost of buying the existing infrastructure from DTE.
"And we are preparing to make a recommendation, which we haven't made yet to City Council about the next steps," Stults said.
DTE released a statement regarding both the city's clean energy goals as well as Ann Arbor for Public Power's desire for the city to provide full utility services:
"DTE is in a strong position to help Ann Arbor achieve the community's clean energy goals. Investor-owned utilities like DTE can deploy capital quickly at low costs.
"Over the past five years, DTE has invested more than $5 billion in our infrastructure, including more than $175 million in our electrical grid in Washtenaw County alone. We've been trimming trees, hardening infrastructure, building new substations, connecting new customers, and replacing aging equipment. Ann Arbor has a goal to reach 100% renewable energy by 2030. And DTE is committed to helping the city get there.
"Municipalization means that a community purchases the electric distribution system of the electric company at today's market value. These costs could be very significant. This does not include the cost of buying or generating electricity for customers or the ongoing costs of running the system once purchased. The community also must factor in costs for ongoing grid modernization investments, grid security, and reliability."
Woodring hopes that the city's recommendation includes conducting a second feasibility study to better understand the costs association with moving away from DTE as an energy partner.
Woodring believes that step is necessary to provide reliable and affordable costs into the future.
"In order to address both the reliability issue to reach our climate goals and to overtime bring down cost of power we need to go to we need to go to 100% of municipalization to acquire DT's assets and do the full thing," Woodring said.
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