The Consumers Energy IRP and the Future We Want for Michigan

Consumers Energy has an important regulatory filing coming up that is going to impact every single person living in Michigan. In the coming months, the utility will file their next long-term energy plan—known as an Integrated Resource Plan or “IRP”—which will set out a 5-year trajectory for delivering electricity to their customers (for more on why you should care about IRPs, see our colleague’s primer on the subject). Whether that trajectory delivers on the promise of clean energy will turn on whether Consumers  follows through on its impressive commitment in their last IRP by moving up its planned coal plant retirements, confirming its commitment to refrain from building new fracked gas plants, and doubling down on even more wind, solar, battery storage, and energy efficiency. The time for an ambitious plan is now.

Thankfully, the 1.8 million Michiganders living in the Consumers Energy territory, from Traverse City and Grand Rapids, to Midland and Bay City, will have a say on that plan. To engage these customers, Consumers Energy is holding virtual town halls in October and November to solicit comments on their IRP (called the Clean Energy Plan on their website). These forums will be an important opportunity for the public to shape how far Consumers will go in putting the state on a path to dramatically cutting pollution, improving public health, mitigating the worst effects of climate change, and setting Michigan’s economy on a clean energy- focused path to recovery post-COVID.

The timing of the Consumers Energy IRP is also opportune, as Michigan is starting to shape its leadership role in the national movement to accelerate climate action. Recently, Consumers Energy committed to net-zero carbon emissions for their electric power generation by 2040 (for more on decoding what “net-zero” means, see NRDC’s “Race to 100” StoryMap here). In September, Michigan Governor Gretchen Whitmer upped that ante with an Executive Directive on Climate, setting a statewide goal of dramatically cutting carbon pollution (net-zero by 2050, to be exact) across Michigan’s entire economy—that includes not just power production, but cars and trucks, home appliances that heat and cool your home, as well as agriculture and industry. These goals are mutually reinforcing, but Consumers Energy has an early opportunity to set Michigan on the right course toward its 2050 commitment; in other words, getting things right for the 5-year IRP will be essential to forging the path for achieving the statewide, economy-wide target.

Governor Whitmer’s Executive Directive has set an ambitious tone as we head into the development of the Consumers Energy IRP, and in fact, the Directive requires the utility to consider the economy-wide goal as it embarks on its planning. This level of ambition couldn’t come fast enough.

Read on to find out more about what’s at stake in developing a strong 5-year plan for the Consumers Energy IRP, and the five things that NRDC and our partners are asking of the utility as we embark on this important process.

What’s At Stake

If the 2050 goal in Governor Whitmer’s Executive Directive sounds familiar, it’s because it follows the ambition of the Intergovernmental Panel on Climate Change’s (IPCC) 2018 Special Report on Global Warming of 1.5^o Celsius, which calls for carbon-neutrality by mid-century in order to remain within the critical 1.5^o Celsius of average warming. The IPCC target has dramatically altered the energy landscape, setting a high bar of ambition for the entire industry.

Importantly, we shouldn’t—and can’t—wait until 2040 or even 2050 to get to work. The IPCC makes clear that early progress matters. The 2020s are the critical decade for climate action, a fact that is even more obvious as we continue to see that climate impacts are already here. Michiganders know this all too well, with high water levels in the Great Lakes and extreme flooding; of note, torrential rainfall this past spring in Midland Michigan caused a crisis of extreme flooding and a breach of two dams during the already devastating pandemic. Consumers Energy’s upcoming IRP will set the course for the first half of this new decade, and thus be a key factor in determining whether Michigan does its part to stay on track with ambitious progress in the next 10 years.

Through the Directive, Governor Whitmer recognizes the impacts of climate change on Michiganders and the need to move swiftly away from fossil fuels in the state. In addition to committing to economy-wide carbon neutrality by 2050, the Directive also requires all IRPs filed by utilities to be consistent with the Directive’s climate goals, including environmental justice and health impact considerations. This applies to the upcoming Consumers Energy IRP, meaning the utility will be required to model their pathway to carbon neutrality by 2050.

It’s also important to emphasize that carbon pollution—while the key driver of climate change—is just the tip of the iceberg of pollution impacts visited upon Black, Brown, and Indigenous communities in Michigan. The Executive Directive tasks the Michigan Department of Environment, Great Lakes, and Energy (EGLE) with developing an environmental justice screening tool which Consumers Energy will use to develop the required environmental justice considerations of their IRP. But we must ensure that the state commits to cutting carbon pollution in a way that prioritizes the health and wellbeing of Black, Brown, and Indigenous communities, which are weathering the cumulative impacts of pollution and climate disruptions. Environmental justice communities are disproportionately exposed to air pollution from the burning of fossil fuels, including the specific type of particulate pollution associated with a higher risk of death from COVID-19. This exacerbates the health risks of the pandemic on people of color, as long-term exposure to pollution has been found to significantly increase the risk of dying from COVID-19. Consumers Energy must work with these stakeholders and meaningfully engage them in their IRP planning process.

The stakes are high. With many people out of work and energy demand at an all-time high, smart utility planning is critical to the health and pocketbooks of state residents, as well as the overall state economy. Prior to COVID-19, Michigan was home to more than 125,300 clean energy jobs, making clean energy a key facet of Michigan’s economic recovery.

Thankfully, there’s a place for Consumers’ customers to have their voices heard as we move toward implementing—and improving upon—this new set of climate and equity goals for Michigan.

Five Recommendations for the Consumers Energy IRP

Here are the five things NRDC and our partners will be asking Consumers Energy to commit to as we make the next big step on a clean energy transformation for Michigan:

1) Focus on equity and communities disproportionately impacted by pollution

As noted above, EGLE will be largely responsible for developing the environmental justice screening tool which will be applied to Consumers Energy’s power generation plan in its IRP. Nevertheless, Consumers has a critical role to play in that process, for example by considering—as the Michigan Environmental Justice Coalition has outlined—employing cumulative impact assessments and health impact assessments in their decision-making, and assessing climate risk to environmental justice communities in the IRP planning process.

We must make right the pattern of inequity and injustice in Black, Brown, and Indigenous communities in Michigan. There is no way forward without addressing the long-standing harms to which they have been exposed. All of the clean energy pathways identified above have ample opportunities for these impacted communities to see real benefits, but only if planning proceeds with meaningful and open engagement. When Governor Whitmer’s Executive Directive was released, we called on her to center these communities as we move ahead to develop an action plan that will cut pollution in the state, ensure strong environmental justice representation at the table as solutions are developed to reduce dangerous carbon pollution, protect public health, and address environmental injustice. Consumers Energy must be held to the same standard as they move ahead with their long-term energy plan.

2) Speed up the shift to renewable energy and away from fossil fuels

To meet carbon reduction goals and safeguard the health and wellbeing of Michiganders, Consumers Energy will need to fully shutter the Karn and Campbell coal plant much sooner than their planned retirements, accelerating the utility’s current proposed timeline by a full decade. The planning for these closures must include a just transition for the workers and impacted communities, including workforce development and transition training, local air pollution mitigation measures, safe decommissioning, and meaningful stakeholder engagement.

Consumers Energy must also uphold its commitment to not build new fracked gas plants and, further, not invest in any new gas infrastructure. Consumers should be shifting away from polluting energy sources like coal and gas and doubling down on meeting their customers’ energy needs with clean and renewable resources. The targets set out in their last IRP aimed to add 6,500 megawatts of renewable power to the grid by 2040. This is a commendable goal. But to keep pace with their carbon-neutral by 2040 target Consumers Energy must scale up their ambition, increase their investment in wind, solar, and storage, and fully commit to a fossil-free future.

3) Get serious about energy efficiency

Energy efficiency is already an important part of Consumers Energy’s strategy, with the utility currently delivering bill savings to customers at an unprecedented level. But the utility must go even further in order to meet ambitious climate targets, and we challenge the utility to focus even more ardently on low-income energy efficiency and bill affordability programs—especially during COVID-19 when the energy burden has never been higher. Energy efficiency programs lower the amount of energy needed to meet customer demand, not only lowering the amount you pay on your bill, but also making it easier for the utility to operate cleanly, avoiding additional air pollution by not needing to call on dirty power sources to ensure reliability. Consumers Energy should expand upon existing energy efficiency programs, making sure they are both affordable and accessible to their customers.

4) Electrify major pollution sources like transportation and buildings

Governor Whitmer’s Executive Directive calls for economy-wide decarbonization. This means that we must cut carbon deeply in the electric power sector, as well as in the heavily-polluting building and transportation sectors—the second and third highest sources, respectively, of carbon pollution in Michigan. The good news is that the electric power industry holds enormous potential for accelerating the shift toward a clean, safe, reliable energy future—even beyond the grid. The power sector is the gateway to decarbonizing much of Michigan’s economy. To cut emissions from cars and buildings, we must squeeze the remaining oil and gas use out of the system—that means “plugging in” to an increasingly-clean electric grid.

Building electrification also reaps health benefits, as the use of appliances like gas cooktops and stoves can raise indoor air pollutants, including the fine particulate matter known to increase the risk of death from COVID-19, to levels that would violate outdoor air quality standards. On the road, diesel trucks and gas-fueled cars emit harmful smog forming pollutants while contributing to climate change. Electric vehicles offer an opportunity to upgrade from health-hazardous transportation to a clean and cost-effective alternative. Replacing fossil-fueled appliances and vehicles with electric versions is one more way the shift from fossil fuels is beneficial to the health of Michiganders.

5) Integrate resource planning on the generation side with the distribution system

All of this focus on the power sector will mean that the grid needs to be ready to accommodate a dynamic landscape of large-scale renewables and storage on the generation side, with two-way power flows from rooftop solar, clean energy resources on the distribution grid, and a whole new array of electric technologies on the customer side of the meter (see vehicle and appliance electrification above) that can be leveraged to provide grid flexibility when the time comes. This distribution-side “demand flexibility” is an invaluable resource with huge potential for integrating the significant level of utility-scale renewables and storage that will be needed to decarbonize the power grid and reach Consumers Energy’s (and now the state of Michigan’s) net-zero power goals.

But that potential can only be realized with smart, forward-thinking planning that brings together resource planning on the generation side and distributed energy resource planning on the distribution system. Thankfully, the Michigan Public Service Commission—the agency that regulates the state’s investor-owned utilities—is requiring Consumers Energy to bring these two sides of the planning equation together in their forthcoming IRP. But the devil is in the details for how to do that well, and the jury is out on how committed Michigan’s utilities are to taking on that challenging—but important—process.

Illustrative of this question of how committed Michigan’s utilities are to that integrated process is the last tranche of rate cases. This is the fifth year Consumers Energy has proposed to increase rates for its customers, driven largely by an effort to plow ratepayer dollars into the distribution system and make the grid more reliable. The goal of reliability is an important one in Michigan, where power outage rates are amongst the worst in the country. But, to date the utility has yet to demonstrate that the investments they’d like to make in the grid—consumer dollars—are actually overcoming these reliability challenges.

Part of the disconnect is that Consumers (and its neighbor to the East, DTE Energy) is overlooking the potential distributed system planning could play in ensuring cost-effective and reliable service across its territory. A more systemic, iterative approach to distribution system planning, and bringing that planning together—at least—with resource planning on the generation side, is a critical step. It’s a step that can walk a chew gum at the same time: it can make the grid more reliable and resilient (addressing the power outage issue), and support and enable a cleaner and more efficient system. For more on the Consumers Energy rate case and the distribution system planning imperative, see this excellent blog on the subject from Michigan Citizens Utility Board.

Get Involved

Make your voice heard! Registration is open for the Consumers Energy virtual town halls in October and November. Additionally, you can submit comments directly to the utility or take action with us to let Consumers Energy know that the people of Michigan will be holding them accountable for our clean energy future.

NRDC will be talking to Consumers Energy about Michigan’s clean energy future—we hope you’ll join us.