The Michigan Public Service Commission has approved DTE Energy’s request to close the Monroe Power Plant earlier than planned. The decision comes as part of DTE’s broader effort to transition away from coal-fired power generation and expand its renewable energy portfolio. Originally slated to shut down in 2030, the plant’s closure will now occur in 2024. DTE stated that this transition will allow for a more sustainable and cleaner energy future, while also emphasizing the importance of assisting affected employees and the surrounding community during the transition period..
Detroit-based DTE Energy, which provides electricity to 2.3 million people in southeast Michigan, will be able to go forward with a plan to retire its coal-fired Monroe Power Plant in 2032 after receiving approval from a state regulatory board Wednesday.
The Michigan Public Service Commission signed off on DTE’s integrated resource plan (IRP) 2-0 during its meeting Wednesday morning, with Chair Dan Scripps and Commissioner Katherine Peretick voting in favor of the plan. Commissioner Alessandra Carreon abstained from voting after noting she had only been appointed to the commission in late June.
In its first draft of the IRP, the company had initially proposed to keep the Monroe Power Plant up and running until 2035, but agreed to accelerate the plant’s closure in a settlement which DTE, Michigan Attorney General Dana Nessel’s office and a bevy of environmental conservation groups all signed off on.
Michigan law requires utility companies to submit IRPs to the MPSC for review and approval at least once every five years. The plans are roadmaps for how the utility companies forecast their energy generation over the next 20 years. Before Wednesday, DTE’s most recent IRP was approved by the commission in 2020.
The settlement will see DTE retire two coal-burning units at the Monroe Power Plant, units 3 and 4, by 2028, and have units 1 and 2 retired by 2032.
Before proposing the IRP approved Wednesday, DTE had first planned to phase out coal-burning for energy generation by 2040.
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The retirement of plants that use coal-burning to generate energy is seen as a key tool in the pursuit of making Michigan a “carbon-neutral” state when it comes to energy generation. Getting to carbon neutrality generally means getting carbon emissions as close to zero as possible, and then using various “offsets” — projects that reduce greenhouse gas emissions, such as planting trees or increased efficiencies at power plants — to address the remainder.
The Attorney General’s office says the Monroe Power Plant is the third-largest CO2 polluter in the U.S. and moving up its closure from the original 2040 target will result in an estimated 21.2 million fewer tons of CO2 emissions.
Democratic lawmakers in Michigan have introduced legislation which targets the state being a carbon-free state for energy generation by 2035 — among the most ambitious goals in the country — but the bills remain in early stages and sponsors have stressed that the legislation could be amended as more feedback is gathered.
In addition to moving up the retirement of the Monroe Power Plant, the IRP approved calls Wednesday for:
- DTE to spend $135 million on converting the Belle River Power Plant from using coal to gas by 2028 to handle peak energy demands. The Monroe Plant, along with the Belle River Power Plant in St. Clair County, are DTE’s last remaining coal-fired plants. The two currently produce 40% of the overall power the utility provides to its 2.3 million electric customers in southeast Michigan.
- DTE to pursue any state and federal grants made available for the coal plant retirements, so long as they represent savings for ratepayers.
- DTE to provide $38 million in donations, including $30 million toward reducing low-income customers’ arrearages, or money owed, and $8 million to go to organizations assisting in energy efficiency and renewable energy projects for low-income customers.
- Starting in Oct. 2024, DTE will have to make annual public disclosures for political donations of at least $5,000 made from Oct. 1 to Aug. 31 of the previous year. This includes contributions made by DTE entities to tax exempt entities, like 501(c)3 and 501(c)4 nonprofits. 501(c)4 nonprofits are often “social welfare” organizations that can engage in lobbying and weigh in on pending political issues.
- DTE to increase the distributed generation cap from 1% to 6%. Distributed generation projects, like solar panels, allow individuals to generate their own energy for usage. By increasing the cap, more ratepayers would be able to pursue these projects.
- DTE will securitize over $1 billion in assets represented by the coal-burning assets at the Monroe and Belle River plants upon retirement. This means the company can convert the value of the current assets being phased out into securities that investors can purchase shares of.
In a media call earlier this month, Trevor Lauer, president and chief operating officer of DTE Electric, said the plan will drive $11 billion of investments over the next 10 years in the clean energy space. Additionally, Lauer said DTE will reduce future costs to customers by a projected $2.5 billion by saving $1.4 billion by retiring the Monroe Power Plant early and a mix of tax credits for building renewable energy, reduced operating costs and reduced fuel costs associated with the closing of the plant.
“The settlement represents a number of major advancements that we were looking to achieve in this IRP proceeding, the most significant being locking in the retirement of the third-largest climate polluter in the country, the Monroe coal plant,” said Shannon Fisk, director of State Electric Sector Advocacy at environmental law nonprofit Earthjustice, during a briefing on the settlement.
Free Press business reporter Adrienne Roberts contributed to this article.
Contact Arpan Lobo: [email protected]. Follow him on Twitter @arpanlobo.
Detroit-based DTE Energy has received approval from Michigan’s regulatory board to retire its coal-fired Monroe Power Plant in 2032. The retirement of coal-burning plants is part of the state’s efforts to become carbon-neutral in terms of energy generation. Under the approved integrated resource plan, two coal-burning units at the Monroe Power Plant will be retired by 2028, and the remaining two units will be retired by 2032. The plan also includes converting the Belle River Power Plant to gas by 2028, increasing funding for low-income customers, increasing the distributed generation cap, and securitizing over $1 billion in assets.
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