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Magrath – Winter 2024 – MJEAL


The Energy Is Down (Once more) in Tree City:

Inspecting Electrical Utility Municipalization in Ann Arbor

Nathaniel Magrath


Over the past a number of years, Ann Arbor residents have organized a push to municipalize town’s energy grid.[1] Whereas comparable efforts to municipalize electrical utilities have additionally gained momentum throughout the nation, motivations for these efforts differ.[2] Efforts to municipalize in Ann Arbor have been initially fueled by neighborhood members’ want to realize 100% renewable vitality, however the unreliability of energy supply within the Metropolis has not too long ago turn out to be an extra driving pressure within the push to municipalize.[3]

In response, the Metropolis has commissioned research on the feasibility of a number of processes, together with municipalization, which may effectuate its aim of 100% renewable vitality by 2030.[4] This weblog put up goals to briefly describe municipalization processes typically, look at Ann Arbor’s municipalization effort inside that context, and recommend that extra evaluation is required to judge one of the simplest ways to realize the Metropolis’s aim and supply low-cost, clear, dependable energy for Ann Arbor residents.

  1. What Does it Imply to Municipalize?

At a really normal stage, to municipalize a utility (together with energy, water, sewer, and many others.) is to carry it below authorities management.[5] Proponents of municipal vitality utilities are pushed by quite a lot of coverage objectives starting from lowered charges and higher reliability to improved racial fairness and decreased reliance on fossil fuels.[6] 

Michigan is not any stranger to municipal electrical techniques; presently, there are roughly forty-two such techniques within the state, together with one in Chelsea, Ann Arbor’s neighbor, and the state’s capital metropolis, Lansing.[7]

The authorized path to municipalization within the State is properly paved, at the very least on paper. The power to municipalize a utility is enshrined in Michigan’s structure.[8] Moreover, The Residence Rule Cities Act (MCL § 117.4f) authorizes a municipality to buy or condemn belongings to type a public utility (supplied 3/5 of the electors vote to authorize such motion).[9] The state statutes that govern the Michigan Public Service Fee (MPUC) additionally comprise particular provisions for Municipal Electrical Utilities (MEUs).[10] Notably, whereas MPUC regulates charges and repair requirements for Investor-Owned Utilities (IOUs),[11] it doesn’t regulate MEUs throughout the state in the identical manner.[12]

The overall steps in the direction of a municipal takeover of the incumbent IOU are properly documented, and these processes typically comply with an identical sample throughout states.[13] Efforts in different states point out that authorized hurdles in municipalization processes in Michigan are prone to come from the incumbent IOU, which has a revenue motive to stay in place, fairly than the fee itself.

  1. Municipalization in Ann Arbor

Power supply in Ann Arbor is at the moment managed by DTE, an IOU delivering energy to a large portion of southeast Michigan.[14] Along with rising frustration amongst residents with energy outages,[15] some argue that continued reliance on DTE is incompatible with Ann Arbor’s 100% renewable energy aim.[16] In September 2022, the Ann Arbor Metropolis Council funded a feasibility examine to discover the formation of a municipal electrical energy system in addition to different choices to succeed in the Metropolis’s renewable vitality objectives.[17]

Grassroots actions have additionally supported this push. Ann Arbor for Public Energy, a volunteer collective within the metropolis, advocates for municipalization of Ann Arbor’s energy grid to extra shortly and utterly obtain renewable vitality objectives, enhance system reliability, and maintain capital throughout the native economic system.[18] These objectives typically align with public sentiment as captured in a 2023 survey commissioned by the Metropolis. That survey discovered that probably the most repeated issues of residents are “resilience, reliability, and value,”[19] and practically 60% of respondents acknowledged that they wish to see Ann Arbor attain its 100% renewable vitality aim by 2030.[20]

The feasibility examine’s findings have been launched within the fall of 2023. The reported findings defined that an MEU—whereas doubtlessly opening the door to long-term price financial savings—would doubtless not consequence within the metropolis’s reaching their 2030 100% renewable aim. The report signifies that due to the uncertainty surrounding potential litigation and different monetary dangers, an MEU could be “extremely unlikely to launch earlier than 2030.”[21] Moreover, the feasibility examine “didn’t immediately assess the reliability of the electrical distribution system, which has been the supply of the rising outage issues in DTE’s service territory.”[22] The Metropolis additional notes that the subsequent examine deliberate will nonetheless not consider the prices to improve the grid and deal with end-user reliability points.[23]

The report additionally mentioned the feasibility of a Sustainable Power Utility (SEU), “a municipal utility supplemental to the present electrical load-serving entity (DTE)”, however additional dialogue of this selection is past the scope of this weblog.[24]

  1. What’s Subsequent?

If Ann Arbor votes to municipalize the facility grid, its chief authorized benefit might be that Michigan gives each constitutional and statutory help to cities and cities wishing to municipalize. Nevertheless, it’s unlikely that DTE will go away Ann Arbor with out a battle given its revenue motive to stay in place. The examine commissioned by the Metropolis famous that “[m]unicipalization is a fancy authorized course of that has traditionally been vigorously opposed by the incumbent utility” and {that a} comparable battle is anticipated in Ann Arbor.[25]

The litigation dangers stay troublesome to pinpoint partially as a result of no municipality within the state has efficiently accomplished the municipalization course of in over a century.[26] Concern concerning the lack of precedent throughout the state is perhaps remedied by trying to different communities throughout the nation which have gone via this course of. However whereas some such communities have been profitable of their efforts, others have confronted insuperable roadblocks.[27]

At this level within the course of, there stays an alarming lack of expertise concerning how municipalization would resolve residents’ prime issues with energy supply because it stands now: resilience, reliability, and decarbonization.[28] Whereas most Ann Arborites help the push in the direction of 100% renewable vitality, in addition they stay deeply annoyed with repeated energy outages below the incumbent IOU, DTE.[29] Thus, the Metropolis should steadiness their give attention to advancing their renewable vitality objectives with the calls for of their constituents: options that enhance the resilience and reliability of the grid.

Michigan’s constitutional and statutory help for municipalization of utilities places Ann Arbor in authorized place to type a municipal utility. Nevertheless, ought to it pursue this route, it’s important that it needless to say what residents seem to most want is a clear, dependable energy grid—the Metropolis would do properly to make sure that aim stays in focus because it explores future research and continues with this course of.



[1] Ann Arbor for Public Energy, https://annarborpublicpower.org/ (final visited Mar. 17, 2024).

[2] See Akielly Hu, Meet the communities attempting to take over their native electrical utility, Grist (Jan. 25, 2024),

https://grist.org/politics/meet-the-communities-trying-to-take-over-their-local-electric-utility/ (outlining municipalization efforts throughout the nation, together with the hassle in Ann Arbor).

[3] See Nirali Patel and Chen Lyu, Neighborhood members protest for municipal vitality forward of Metropolis Council vote at metropolis corridor, Mich. Each day (Jan. 21, 2022), https://www.michigandaily.com/information/protestors-protest-for-municipal-energy-ahead-of-city-council-vote-at-city-hall/; see additionally Paul Ciampoli, Strikes to Broaden Public Energy in Michigan Develop in Wake of Current Outages, Am. Pub. Energy Ass’n (Mar. 3, 2023), https://www.publicpower.org/periodical/article/moves-expand-public-power-michigan-grow-wake-recent-outages; see additionally Meredith Bruckner, Current energy outages fueling push for municipal utility in Ann Arbor (Jul. 31, 2023), https://www.cbsnews.com/detroit/information/recent-power-outages-fueling-push-for-municipal-utility-in-ann-arbor/.

[4] 100% Renewable Power Pathways, Metropolis of Ann Arbor, https://www.a2gov.org/departments/sustainability/Adaptation-Resilience/Pages/Renewable-Power-Pathways.aspx (final visited Mar. 17, 2024).

[5] Suedeen G. Kelly, Municipalization of Electrical energy: The Attract of Decrease Charges for Shiny Lights in Huge Cities, 37 Nat. Res. J. 43 (1997); see additionally Shelley Welton, Public Power, 92 N.Y.U. L. Rev. 267, 304 (2017) (describing municipalized techniques as these the place “both town council or an unbiased governing board or company has direct management of a not-for-profit electrical utility”).

[6] See Alexandra B. Klass & Rebecca Wilton, Native Energy, 75 Vand. L. Rev. 93, 134–35 (2022) (explaining the motivations of native governments and different up to date energy advocates of their efforts to municipalize vitality utilities).

[7] Public Energy FAQs, Ann Arbor for Public Energy, https://annarborpublicpower.org/faq/ (final visited Mar. 17, 2024).

[8] “Topic to this structure, any metropolis or village could purchase, personal or function, inside or with out its company limits, public service amenities for supplying water, gentle, warmth, energy, sewage disposal and transportation to the municipality and the inhabitants thereof.” Mich. Const. artwork. VII, § 24.

[9] Mich. Comp. Legal guidelines. Ann § 117.4f (2018).

[10] Id. § 460.10y (2018).

[11] See Administrative Guidelines / Legal guidelines, Mich. Pub. Serv. Comm’n, https://www.michigan.gov/mpsc/regulatory/administrative-rules-laws (final visited Mar. 17, 2024).

[12] See Electrical energy, Mich. Pub. Serv. Comm’n, https://www.michigan.gov/mpsc/about/electrical energy (final visited Mar. 17, 2024).

[13] See Klass & Wilton, supra observe 6, at 114–19 (detailing the sample that cities usually comply with when pursuing municipalization of a utility).

[14] See Electrical Utility Service Space Map, Mich. Pub. Serv. Comm’n, https://www.michigan.gov/mpsc/client/electrical energy/electric-utility-service-area-map (final visited Mar. 17, 2024).

[15] See Ryan Stanton, ‘We shouldn’t have to stay like this.’ Ann Arborites air frustrations over DTE outages, MLIVE (Jul. 26, 2023), https://www.mlive.com/information/ann-arbor/2023/07/we-do-not-have-to-live-like-this-ann-arborites-air-frustrations-over-dte-outages.html.

[16] See Renewable, Ann Arbor for Public Energy, https://annarborpublicpower.org/clear/ (final visited Apr. 3, 2024).

[17] Ann Arbor, Mich., Decision 22-1380 (Sept. 6, 2022), https://a2gov.legistar.com/LegislationDetail.aspx?ID=5778314&GUID=DB270D29-357E-4BCE-8A95-7B9AE379A647.

[18] Public Energy FAQs, supra observe 7.

[19] Dustin Olson & Sean Bartley, Strategic Insights from the Ann Arbor Power Future Survey, American Pulse Analysis & Polling (2023), https://www.a2gov.org/departments/sustainability/Paperwork/Surveypercent20Fullpercent20Resultspercent20withpercent20Appendices.pdf.

[20] Id. at 10.

[21] Metropolis of Ann Arbor, 100% Renewable Power Choices Evaluation 134–38 (2023), https://www.a2gov.org/departments/sustainability/Paperwork/Annpercent20Arborpercent20Renewablepercent20Energypercent20reportpercent20final.pdf.

[22] Id. at xxv.

[23] Id.

[24] Id. at xiv; see additionally Ann Arbor’s Sustainable Power Utility (SEU), Metropolis of Ann Arbor,  https://www.a2gov.org/departments/sustainability/Sustainability-Me/Pages/Ann-Arbor’s-Sustainable-Power-Utility-(SEU).aspx (final visited Apr. 3, 2024).

[25] Metropolis of Ann Arbor, supra observe 21, at xvii; see additionally Klass & Wilton, supra observe 12, at 131–33 (discussing notable examples of IOUs opposing municipal takeovers).

[26] Public Energy FAQs, supra observe 7 (explaining that “​​current municipal utilities in Michigan have been all fashioned over a century in the past”).

[27] See Synapse Power Economics, Inc., An Evaluation of Municipalization and Associated Utility Practices 10–26 (2017) (evaluating the municipalization efforts of Lengthy Island, N.Y., Winter Park, Fla., Jefferson County, Wash., and Boulder, Colo.); see additionally Boulder Native Energy: A Historical past, Empower Our Future, https://empowerourfuture.org/boulder-municipalization-a-history/ (final visited Mar. 17, 2024) (chronicling Boulder’s latest unsuccessful try and municipalize).

[28] See Olson & Bartley, supra observe 19, at 2–3.

[29] Id.; see additionally Stanton, supra observe 15.

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