Michigan’s Energy Futures:
Duopoly or sustainability?
Many Michiganders may not realize it, but our state law actually guarantees two companies, DTE and Consumers Energy, a duopoly over Michigan’s energy market. In 2008, Michigan passed a law promising the two private utilities precisely 90% of Michigan’s energy business. In December 2016, during its lame duck session, the Michigan legislature passed a new law extending the state’s commitment to protect these two for-profit businesses from competition. At a time when the state government might’ve intervened in the energy market to promote sustainability via subsidies for local, renewable energy co-ops and municipalities, it has instead chosen to protect the unsustainable, extractivist capitalist mode of energy production.
Praised for passing with overwhelming bipartisan support, the new law imposes a tariff on companies competing in the remaining 10% of the “free market” and gives those funds to DTE and CE. As if these measures didn’t already ensure high levels of revenues for the private utilities, the new law also requires that customers switching to DTE and CE sign contracts with the companies lasting at least six years. As state senator Mike Nofs, one of Republican senators behind the legislation, commented, this provision may expand DTE and CE’s duopoly beyond the officially sanctioned 90% so that the 10% cap on free competition isn’t even reached.
Finally, under the new law, whenever DTE and CE improve their energy efficiency, they are explicitly allowed to raise prices on consumers. A legal incentive for innovation and enhanced efficiency wouldn’t be necessary if DTE and CE were forced to compete. In a true free market, a business would be forced to innovate and reduce costs to consumers whenever possible in order stay competitive. But, in the absence of competition and in the presence of the state’s protection, innovation and greater efficiency becomes an added cost to consumers.
Though it was hardly discussed in Michigan’s leading newspaper, the Detroit Free Press, this new energy law implicitly endorses a very specific and dangerous energy plan put forward by DTE and CE. The Free Press did mention that this promise to protect the big energy companies from competition did come with one minor caveat: DTE and CE must source 15% of their power from renewables by 2021. This renewable energy mandate improves upon the former law that required the utilities to achieve 10% renewable energy by 2015. Journalist Paul Egan, the Free Press’s Lansing Bureau Chief and author of almost all of the paper’s articles leading up to and immediately following the legislation’s passage, reported that it was Democrats who “pushed” for this updated mandate in the new law, and that this mandate was the reason for their support of the overall legislative package. But, taken within the context of the legislation as a whole, this renewable mandate appears, at best, as a palliative solution that marginally offsets the great environmental and health risks sanctioned by the legislation as a whole. (It’s also worth noting, for what it’s worth, that DTE had already said that it anticipated raising its renewable energy capacity to 13% by 2020.)
The Free Press had reported on DTE and CE’s plan for Michigan’s energy future in the past, but these reports were never linked to or referenced in articles published in the run-up to the bills’ passage. From these past reports we know that the utilities plan to retire a third of its coal generation and shift much of the burden onto natural gas. As DTE and CE close their coal-fired power plants, natural gas will provide for more and more of our state’s heat and electricity. This fact, which is central to understanding the new energy law, was not mentioned in any of the Free Press articles on the legislative struggle in the weeks and months before and following its passage. The phrase “natural gas” literally does not appear in any of the articles published since October 9.
It’s important, though, to understand the role natural gas will play in our energy economy moving forward. Experts generally agree that natural gas is typically better than coal in terms of greenhouse gas emissions; and so if we can demonstrate with some confidence that the natural gas we intend to utilize will produce a less harmful emissions over its lifecycle, then we may safely use it as a bridge fuel during our overall transition to a renewable and sustainable energy system. This means, though, that we should not utilize natural gas when doing so undercuts investment in renewables. The corporations’ plan, if actualized, will violate this principle. Some experts estimate that Michigan could produce 35% of its energy from renewables without a major grid overhaul. The nearby state of Iowa already sources roughly 30% of its energy from wind alone, and Hawaii is on its way to 100% renewable energy production.
To be fair, an article published in the business section of the Free Press on October 9 did lay out the central struggle between natural gas and renewables in light of the looming climate catastrophe. Unfortunately, not since that article has the Free Press fostered any discussion of renewables, natural gas, or even climate change. The phrases “climate change,” “global warming,” and “greenhouse gas” do not appear in any of the articles published during the critical period before or immediately after the legislation’s passage, except for two references to President Donald Trump’s belief that climate change is a Chinese hoax.
What’s more, though, DTE and CE’s natural gas agenda appears to fail basic safety tests. As the Free Press failed to report in the articles on the legislation, DTE has invested $1 billion in the NEXUS pipeline that will carry natural gas from the Appalachian fracking fields in Ohio and Pennsylvania. As many people now understand, fracking poses especially high and immediate environmental and health risks, and so should be categorically opposed. Furthermore, as the Free Press reported in 2014 (but, again, failed to remind readers at the critical juncture), the pipelines that DTE and CE use to transport gas throughout our state are compromised. From 2006 to 2010, DTE gas leak surveys showed that average hazardous leak counts quadrupled to over 1,200. Federal regulators consider cast-iron and unprotected bare steel pipe, which DTE and CE predominantly use, the most at-risk and likely to fail. Replacement plans for these pipes are expected to take 25 years or more.
In this 2014 article, journalist Keith Matheny quotes Anne Woiwode, then director of the Sierra Club’s Michigan chapter, who argued that the compromised pipeline helps make the case for more investment in renewable energy. She said: “The lack of a long-term strategy for how we get to Michigan-owned clean power is a serious problem we continue to face.” These two ideas — that we should have “a long-term strategy” with regard to energy, and that we might achieve “Michigan-owned clean power” — run radically against the grain of the Free Press coverage during the critical period. The Free Press articles all provided answers to the basic material concern at stake — how to supply the state with energy — but always bracketed by the dual implicit assumptions that (1) two private, profit-maximizing companies would take care of this public good and (2) that the state would assist these companies in this pursuit. If the Free Press had enumerated the problems with DTE and CE’s energy plan, it’s possible that readers would’ve asked: What’s the true intention of this energy legislation? Egan writes that it is “aimed at making sure Michigan has all the electricity generation it needs,” but in the light of the Free Press past reporting, it appears that these energy laws were written by and for the corporations.
In our neoliberal era, we tend to uncritically accept the privatization of public goods, such as energy, water, broadband Internet, etc., and so it’s easy for news outlets like the Detroit Free Press to suppress alternative, democratic energetic arrangements. Only a very weak form of democracy is safe, we’re told; never try to assert democratic rule over the economy. What about subsidies for renewable energy co-ops, either for farmer co-ops, or municipalities? Unacceptable. What about the state favoring sustainability over extractivism? Impossible. All these ideas, if actualized, would almost definitely mitigate the flow of profit to these big energy corporations, who rake in billions of dollars annually under their state-sanctioned duopoly, and so they aren’t admitted into the arena of free discourse. They are, nonetheless, our species’ best hope for survival.