In settlement with critics, DTE Energy agrees to faster coal phase-out

• In a settlement announced Wednesday, DTE Energy has agreed to stop using coal-fired power by 2032
• That’s three years earlier than previously planned
• It still doesn’t align with a state goal to ditch coal by 2030.

Following pushback from ratepayer and clean energy advocates who argued DTE Energy was moving too slowly away from fossil fuels, the electricity utility has agreed to exit coal-fired power production by 2032, three years earlier than previously planned.

The utility — Michigan’s largest electric utility with 2.3 million customers from the Ohio border to the Thumb — announced revisions to its long-range power production plan on Wednesday following nearly two years of negotiations with the state, environmental groups and business leaders.

Twenty-one other parties have signed onto the settlement, including several environmental groups that criticized DTE’s previous long-term energy plan for relying too heavily on continued fossil fuel use.

Related:

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• Detroiters object to DTE rate increase as many reel from power outages

In that plan, announced in November, DTE vowed to get off coal by 2035 and push to be carbon-neutral by 2050. The new plan would push coal’s sunset date to 2032 by retiring the Monroe Power Plant earlier.

The move is a roadmap to “lay out the way we will provide energy into the future,” said Trevor Lauer, president and chief operating officer for DTE Electric, during a media briefing.

The move earned cheers from some environmental groups, including the Sierra Club. 

Calling the Monroe plant “a massive polluter,” the group’s Michigan field manager, Andrew Sarpolis, hailed the promise of an earlier shutdown. 

“Every additional year of its operation exacerbates climate change and harms our communities,” Sarpolis said. “By retiring the plant sooner, we can have a greater positive impact on the state’s health and climate.”

Other groups lauded settlement terms that devote more money to helping low-income customers make their homes more energy efficient, set more aggressive renewable energy targets, require annual public disclosures of DTE’s charitable and political donations, and more. 

Clean energy advocates also won an agreement by DTE to file its next long-range energy plan by 2026, two years earlier than previously scheduled. As part of that process, DTE must evaluate the possibility of pushing Monroe’s retirement even earlier, to 2030.

If that happened, DTE would be more aligned with the state’s climate goals. In her 2022 climate plan, Gov. Gretchen Whitmer urged a coal phase-out by 2030. 

Michigan lawmakers are debating a legislative package that would require utilities to get off all fossil fuel power by 2035. DTE’s plan wouldn’t meet that goal. 

That’s because DTE plans to abandon coal in part by repurposing the Belle River coal plant into a natural gas plant that can quickly fire up to meet spikes in electricity demand. Natural gas would remain a major portion of DTE’s energy mix for the next two decades, according to documents provided by the company.

While DTE’s new plan represents a surge in clean energy ambition, the 2032 coal sunset still lags behind Michigan’s other major energy utility. Consumers Energy agreed in a settlement last year to retire all of its remaining coal-fired power plants by 2025.

The U.S. electrical power sector generates a quarter of the country’s emissions, making it a major contributor to climate change. Earth repeatedly broke records last week for the hottest day ever recorded.

Barring a swift transition away from fossil fuels, global temperatures are on track to rise 2.5 degrees Celsius (4.5 degrees Fahrenheit) above temperatures seen before the industrial revolution by the end of this century. While major climate shocks are already happening across the globe, allowing temperatures to rise further would yield even greater destruction, including more wildfires and heatwaves in Michigan, worsening floods and the likely disappearance of northern boreal forests.

DTE’s new, more ambitious agreement was negotiated among Michigan Public Service Commission (MPSC) staff, Attorney General Dana Nessel, representatives of Michigan’s environmental community, business and labor organizations, and energy industry associations.

Support for the plan was not unanimous. Notably, ratepayer advocacy group the Citizens Utility Board of Michigan declined to sign on. 

The group objects to a provision of the settlement that lets DTE charge customers more in order to deliver a 9 percent return to DTE shareholders on nearly $2 billion in costs to retire coal plants.

“We think it is inappropriate for DTE shareholders to profit from these retirements,” said Amy Bandyk, executive director for the ratepayer group, “and especially for DTE customers to have to pay for that shareholder profit.”

Some signatories also argue the plan doesn’t go far enough. Soulardarity and We Want Green Too, two signatory groups, urged the legislature to pass laws that support the energy transition and protect ratepayers, from enabling community solar to holding utilities more financially accountable for power outages.

“Ultimately, we saw this deal as an advancement that creates greater possibility for a just energy future than the alternative,” the groups said in a statement. “But we are clear-eyed about its limitations, its drawbacks, and the need for further actions.”

The so-called Integrated Resource Plan now has to be approved by the MPSC. The next meeting is July 26. 

DTE also has a pending case with the MPSC to raise rates, filed early this year just months after the MPSC approved a hike representing a small fraction of the previous request. DTE had requested $388 million, but was allowed a $30 million increase.

Publicly traded DTE Energy [NYSE: DTE] is valued at $22.85 billion, with shares at $110.35 after Tuesday’s trading.