The Michigan Public Service Commission (MPSC) approved a settlement late last week between environmental and housing advocates, the Attorney General’s Office and Consumers Energy. 

The agreement will expand investments into energy efficiency building on a previous agreement from 2022. Through the agreement Consumers Energy, one of the state’s largest energy companies, will increase investments in communities most impacted by high energy burdens. 

Energy burden is defined as a household spending more than 6% of their income on energy bills, with poor insulation, leaking roofs and outdated appliances all potentially contributing to these higher energy costs. 

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These burdens disproportionately fall on low-income and non-white households. According to the American Council for an Energy-Efficient Economy the median energy burden for Black households is 43% higher than that of white households. The median energy burden for Native American households is 45% higher than white households while the median energy burden for Hispanic households is 20% higher than that of white households.

According to a breakdown from the Sierra Club, one of the co-intervenors on the case, the settlement led to a $15 million increase in low-income energy efficiency program investments from what Consumers Energy initially proposed, with $9 million additional dollars for income-qualified single family homes, and $6 million for income-qualified multifamily buildings. 

It also included $2.25 million for the Flint Initiative, which is an energy efficiency program for low-income Flint residents, funding the program through at least 2025, rather than 2024 as initially proposed by Consumers. The settlement also builds on the Flint initiative, requiring the company to launch a similar program in another community by March 31, 2025. 

Additionally, the settlement sets new Energy waste reduction targets with 2% for electric and 1% for gas, exceeding the recently increased minimum energy waste reduction standard. 

 It also requires Consumers to expand customer education and outreach including encouraging the adoption of heat pumps in certain areas alongside offering educational opportunities for customers to access energy efficiency rebates and federal funding. 

It will also double investment in Consumers Energy’s Health and Safety pilot program to $2.5 million to address home repairs and remediation issues preventing customers from receiving energy efficiency upgrades. 

The Sierra Club also highlighted design improvements to the company’s income-qualified multifamily program, increasing heat pump installations to include a minimum of 800 heat pumps installed through 2025, and requiring collaboration with housing finance agencies and organizations to help bundle energy improvements into rehabilitation projects for affordable housing providers. 

Consumers Energy will also begin collecting and reporting consumer data by census tract rather than ZIP code, which the Sierra Club said will better evaluate the equity and effectiveness of the energy waste reduction program. 

“This agreement reflects the prioritization of energy efficiency as a critical tool for helping to solve Michigan’s climate and energy affordability crises, and specifically a commitment to deeper investments in programs for communities that are most in need,” said Laura Goldberg, senior director of Midwest regional impact at the Natural Resources Defense Council, which was also a co-intervenor in the case.

“This 2-year agreement, and the prior plan settlements, help to set the stage for long-term statewide progress on energy efficiency, which is now reflected in Michigan’s new energy efficiency law in the Clean Energy Future Package,” Goldberg said in a statement. 

In a statement, Consumers Energy said the plan matched its commitment to reducing energy waste in homes and businesses. 

“Consumers Energy is committed to all of our customers and communities we serve, from the largest manufacturers to households where every dollar matters,” said Angela Thompkins, Consumers Energy’s chief diversity officer and vice president of community affairs. “We’re excited to deliver new energy solutions that will offer even more savings, focusing on those who traditionally have been underserved.”