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Ann Arbor's experiment with a new kind of utility
I’m joined by Missy Stults, the architect behind Ann Arbor's audacious plan to achieve carbon neutrality, to discuss the city's wild new strategy: creating a second, parallel utility. This "sustainable energy utility" will supplement the incumbent, DTE, offering residents clean, local power without the multi-year legal slog of a full takeover. We explore how this model bypasses the traditional utility monopoly, the surprisingly muted reaction from DTE, and whether this could be the key for other ambitious cities to take control of their energy future.
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David Roberts
Hey, hey, hey, hello, everyone. This is Volts for July 23, 2025, "Ann Arbor's experiment with a new kind of utility." I'm your host, David Roberts. Little noticed amidst the otherwise dismal election results of 2024, the 120,000 or so residents of Ann Arbor, Michigan, voted overwhelmingly to create what the city is calling a "sustainable energy utility" (SEU).
It is not a municipal utility, meaning it will not replace investor-owned DTE as the sole power provider for the city. Rather, it will work alongside DTE and provide services supplemental to DTE's, mostly distributed solar energy and storage, perhaps one day linked into microgrids, perhaps one day supplemented by networked geothermal heating systems. Customers who choose to subscribe — the service is entirely opt-in — will receive two separate bills each month, one from DTE, the other from SEU.
This is, to my knowledge, a novel setup. It’s intriguing for several reasons, not least of which is that it captures many of the envisioned benefits of a municipal utility quickly, without the years-long legal battles and enormous legacy infrastructure costs that come with full municipalization.
Where did this idea come from? Where does the SEU currently stand? What exactly will it offer residents once it is fully up and running? To explore these questions and more, I am talking today with Missy Stults, Ann Arbor’s director of sustainability & innovations. She is responsible for the A²ZERO plan, aimed at achieving carbon neutrality in the city by 2030, a goal that can only be described as crazypants. The SEU is a part of that audacious goal, and I'm excited to dig into it.
With no further ado: Missy Stults, welcome to Volts. Thank you so much for coming.
Missy Stults
Hey, thanks for having me, David. Glad to be here.
David Roberts
This is so cool. I'm so fascinated by this thing, just this little thing tucked off in the corner of the Midwest, which is like neither fish nor fowl — what is this thing? So let's just start — like, legally, this is a utility. So does that mean it is regulated by the Michigan Public Service Commission like a utility?
Missy Stults
Sorta is the answer. So just one clarifier. It actually is a municipal utility because it is a utility and it was voted on by the electorate, and so they authorized us in creating it. But it also is everything you said: supplemental, opt-in.
David Roberts
So it is a municipal utility, just kind of a new kind of municipal utility?
Missy Stults
Yeah, that's right.
David Roberts
What is the relationship of municipal utilities with the Michigan PSC? Are municipal utilities governed solely by the city, or are they also subject to state regulators?
Missy Stults
It's both there. Largely, they're governed by the locality itself. Whether that's the board — it depends on how they were authorized, right? Do they have a third-party board? Are they outside the government, is it a co-op, etc.? But there are certain things they have to do, like renewable energy plans here in Michigan or energy waste reduction filings. So there are things that we have to do, and we're actually figuring this out in real time with our wonderful staff at the Public Service Commission. Because do you have to file a renewable energy plan when the only energy you're authorized to produce is renewable energy?
I don't know. We're trying to figure that out.
David Roberts
The PSC presumably doesn't know either, because that is a new thing.
Missy Stults
Correct.
David Roberts
So where did this come from? Where did this idea come from? I mean, this is your baby, is it not? I mean, where did you catch this fever?
Missy Stults
Well, I have a human baby and then I have lots of little, like, brain babies. And this was a brain baby. Yeah. So I was sitting — you mentioned A²ZERO. And that's our community's plan, framework, actions, goals, all the things. It's our brand for how we're going to hit this audacious goal of carbon neutrality. And in that plan, one of the seven strategies — those are sort of the foundations — was we have to figure out how we're going to power the city with 100% renewable electricity. It's a big ask. It's a big one. And so we looked at lots of different options.
We brought in experts across the space, and we were really excited, and still are, about community choice aggregation — womp womp, not legal in Michigan.
David Roberts
So that would have had to wait for presumably some long campaign to pass legislation, and then you establish one. That would have been another years-long fight.
Missy Stults
Yeah, well, we're working on it, believe it or not, because we still think it's a worthwhile endeavor. And we're really interested in CCA 3.0, right? This idea of local generation and value, and it's a more resilient sort of vision of your energy system. So that still is something our office is working on.
David Roberts
Could you —
Missy Stults
Yes.
David Roberts
Could you be or do both?
Missy Stults
Yeah, you could.
David Roberts
So the SEU could be operating in the context of a CCA, potentially at some point.
Missy Stults
Sure could, if we get it legal in Michigan, CCA, yeah.
David Roberts
Interesting.
Missy Stults
I know. We're hedging our bets, like we're putting a lot of cards on the table.
David Roberts
Can I ask — we're getting too nerdy, too early. But I want to know, what can you not do with this sustainable energy utility that you could do as a CCA, as a community choice aggregator?
Missy Stults
Yeah. So one of the values in our work is transferability and scalability. And so an SEU really has to be the limits of your franchise, which in most cases is the city. Well, for us, it is explicitly the city. Whereas if I get CCA legislation in Michigan, it gives everybody in Michigan the chance to participate. So it's a fix in scale.
David Roberts
Right. But it wouldn't change Ann Arbor's situation.
Missy Stults
No, we would probably just buy in a CCA. We would just, like, go get more renewables in addition to what we can generate with the SEU.
David Roberts
Right, right. So again, like, where'd you come up with this? As far as I can tell, this thing does not exist out in the world.
Missy Stults
Thinking about a CCA and realizing, like, "Dang it, this is not moving fast enough." And we did have residents, and we still do, a small group that really wants to municipalize, more from the standpoint of, like, "take down big corporate, giant capitalism bad." Right. And that's understandable. And I was like, "Oh, gosh, if we do that, I'm saddled with a failing system."
David Roberts
I mean, best-case scenario, you win the legal battle to do it at all, your prize is billions of dollars in debt.
Missy Stults
A failing system. Well, and our system really is old. We're on largely a 4.8 kV system. We're electrifying fastest in the state. The grid can't keep up with it. And my goal is not owning distribution. My goal is clean electrons on the system. So owning distribution, I haven't changed a single electron. Right. So you do all of this work to own, sort of like the clunker. And I was like, "No, but the clunker is not the future. Right. The future is distributed. The future is resilient. The future's clean." And so in these conversations, like, they kind of hit a head.
And I was like, "Wait a minute, what?" What if we don't, like, what if we don't invest in either of these unilaterally? What if we actually start thinking about the future we want? Which really is the four values we talk about: clean, resilient, reliable, and affordable energy. Can we do it? And that's what started the SEU thinking in our minds.
David Roberts
Okay, so later on, I want to come back to this relationship you have to the distribution grid. But first of all, so you've come up with this entirely new, second utility operating alongside DTE. And I was reading this very, by the way, elaborate and informative Frequently Asked Questions document on your website, and I came across a sentence, like many, many pages in, that made my jaw drop, which is, and I quote, "The city has not received any communications from DTE regarding the proposed SEU." And like in my notes, in several spots I had, "What does DTE think about this?"
Missy Stults
Sure.
David Roberts
And I'm to believe that we have no idea. They've said nothing. Is that still true?
Missy Stults
No. We've of course had many conversations with them, but the basic narrative here is I don't think this is "a warm and fuzzy," but it is not an existential threat to them — for the reasons you've sort of alluded to, and I did too — which is this isn't a takeover of their assets. So they still have the ability to operate. Secondarily, we broadcast our goals really openly. We're moving faster than everyone else in Michigan. We got to get to clean. They know our residents want it, and our system's old, right? It's going to cost them potentially billions to invest in upgrading.
And so what we're doing is actually a little bit of a release valve, if you will, for the pressure. Because we're generating new things that buy them time so they can upgrade the system to what it needs to be, as opposed to Band-Aid it, and spend lots and lots and lots and lots and lots of money. So I think it's — in truth, our conversations with them have been all the things you can probably imagine. Generally, though, I tell people — of course, I'm in Public Service Commission cases, right? Like, I'm actively challenging their rate case, their IRP.
And they did write letters of support for us for some of the funding we sought for the SEU because they were curious how it could take strain off the central grid. And maybe there was VPP potential there, virtual power plant potential. So, you know, we've really approached this from there's opportunity for collaboration, but what there's not opportunity is to negotiate the goals we have.
David Roberts
I see. So you don't view this as really hostile to DTE, and as far as you can tell, they don't necessarily view it as hostile either.
Missy Stults
I think that's right.
David Roberts
They're not up there plotting your destruction, as far as you know.
Missy Stults
I mean, I'm pretty sure they do have voodoo dolls of me in the office. I'm pretty confident that's true. But I do know — no, this is, put another way, when we released the very first report on this, and we were like, hey, we've got something here, we had a conversation about who was going to call DTE and tell them. And I drew the short stick. I did. And so I did have to make that call. And it was not confrontational, it wasn't joyful, but they asked, like, "Why are you doing this?" And my response was, "Well, are you going to provide 100% renewable energy? And are you going to allow my residents to interconnect to the grid without a premium?" And their answer was "no." And I was like, "Well, there's your answer."
David Roberts
Yeah. I mean, this is the thing is, like, if cities want to do things, they're all trapped in larger utility territories and the tools they have to control the larger utility territory are limited. So it's one reason this is so interesting. So you did a lot of talking to residents and surveys and whatnot in the run-up to this. What is the sort of main selling point here in the eyes of the residents of Ann Arbor? What is the main selling point?
Missy Stults
Yeah, it's the four things I named. And we know this because we did a statistical and representative analysis of residents to figure this out. It's true across demographics, and they might be in different order depending on the demographic, but over 80% across all demographics say they want reliable power. So, "Hey, it's sunny. Why is my power going out?"
David Roberts
Yeah.
Missy Stults
They want resilient power because we have — Ann Arbor's got this wonderful award we've won many years in a row: we are the most educated city in America. We do not have conversations about whether the climate is changing. Right. People know it is, and that is just a given. So people acknowledge that extreme weather is disrupting the system and they want to have critical load when that happens.
David Roberts
What about blackouts? Do you get a lot of those relative to —
Missy Stults
I mean, we don't. We get more brownouts, like a surge here and there. We've got resilient, reliable power. Our electricity is the highest in the Midwest, rate-wise. And so we want affordable power. And people are struggling with that. And then, of course, clean — Ann Arborites do want to see the transition happen. The very first Earth Day in America was celebrated in Ann Arbor. I don't know if you know this. Ann Arbor voted, we became, I think, the sixth community in North America to tax ourselves to fund climate work. Right. You know, and that didn't just happen.
It wasn't magical. Like, there was a lot of real intentionality and engagement with stakeholders to get to that point. But people really see this as "I have the right to clean energy, I should have the right to clean energy."
David Roberts
This is sort of my question because I can see people supporting this because they think it's going to be cheaper than DTE power, which is probably not a wildly unreasonable thing to think — we'll talk about that later — or because they prioritize clean, and mostly cynics will say, "Oh, people just ultimately care about price."
Missy Stults
Sure.
David Roberts
Do they really prioritize clean? I guess it is a little bit of a — you are kind of in a blue bubble.
Missy Stults
I mean, we are.
David Roberts
People really do care there.
Missy Stults
Yeah. But we also have this beautiful river that runs through, and we've got 163 parks. And people are, like, in nature in a way that I think is — I mean, I was out walking with my husband the other night and we were just talking about how wonderful it is that we can get in this gorgeous park within three minutes of our house. Right. And so I think there's a different connection to our place that's really strong. So co-benefits — they're true whether or not — it doesn't matter why you come in, right? Like, you could come in because it's affordable and you get clean.
But we also have, like, the My Green Power program is our VGP — voluntary green pricing — program that a lot of states have. It's a premium product. We're the highest subscribers in all of DTE's territory.
David Roberts
Oh, that's a DTE offering with a higher, higher green content?
Missy Stults
Yep. You pay more and you get to help invest in the next renewable energy system. Right. And so that is my counter when people say "It's all about money." I say, "Well, that's interesting that I have residents who are paying a premium to help invest in new renewables."
David Roberts
I mean, one can imagine all sorts of things a sustainable energy utility might do in a municipality, you know, but it's always — our eyes are bigger than our stomachs, as they say. Is it up and running yet?
Missy Stults
A very good question.
David Roberts
And when it is up and running, what are going to be sort of like the introductory, the first things you offer?
Missy Stults
Yeah. We're telling everyone it's 18 to 24 months from January 1st of 2025. Because you got to start a utility, right? You got to have billing, you have to have customer service, you have to have contracts, you have to have easements, you have to have all the things.
David Roberts
So this is basically going to — like, you have a city sewer utility. It's just going to be another city utility, basically?
Missy Stults
Like, we have water utility, we have stormwater utility, right. We have water recovery. So, yeah, exactly.
David Roberts
And so this is not going to be run by you as some sort of boutique green thing. It's going to be run by a city employee who thinks of themselves as working for a utility. In other words, it's like not a — I don't know if that question made sense.
Missy Stults
Well, so here, let me tell you how it's governed. This is what we have done: When the voters authorized it in November, that gave us permission to change the city charter and to create its governing ordinance. And when we created the governing ordinance and it was adopted, the utility was officially born, if you will. And that was April 17th. So it exists. And the way that it is structured is it will run as a department of the city to start and maybe forever, maybe not. You may be familiar, many municipal utilities are either in a department or they spin off and have their own governing board.
For us, it doesn't exist. And so it needs the warm embrace, if you will, of the city. Like, it needs customer service and legal support. So we're starting it as a department. We've made an offer for our first executive director. We're waiting on them to get back to us. So we will have an executive director who runs this utility, who has utility experience, and then it will grow. It will be — this person is like my partner in crime on work, but it won't be me.
David Roberts
Now I want to know who it is.
Missy Stults
I can't tell you.
David Roberts
I know. We'll have to wait for them to —
Missy Stults
They gotta accept.
David Roberts
So do you know — I mean, maybe it's too early to know. Like, so no one in Ann Arbor can get anything from the SEU yet, right? It's not, like, up and offering products yet, is it? Do you know yet, sort of what the initial offerings will be, like, what it's gonna launch with?
Missy Stults
Yeah, we sure do. We are gonna launch with solar and storage, for sure. That's kind of bread and butter. We are looking — I mean, this is going to get us, like, dipping our toe into the weeds. So I'll pull back. Or we can go back in. What we're looking at to start is, as you can imagine, there's no revenue yet.
David Roberts
Right.
Missy Stults
Right. So that's like — it's hard to get a revenue bond when you don't have revenue.
David Roberts
Well, can we skip to that? Because this is one of the central mysteries: how is the thing going to be funded? Because if it's just ratepayers funding it entirely, you don't have any money yet until you start offering the service to the ratepayers. It seems like you need — are you going to be drawing on some tax revenue? Are there donations? Are you borrowing money? Is the idea that it will eventually run on ratepayer money?
Missy Stults
Yeah, that's exactly right. And that's a requirement. In Michigan, we have a specific case that indicates kind of the terms of how utilities have to operate. So what we've done, and I'm really thankful for federal support, previously, we were pretty successful — yeah, we'll just end there — in securing some notable grant funding. So we have, we have kind of the ramp, if you will, to get to rate base.
David Roberts
Grant funding that you have as cash money in your pocket?
Missy Stults
Some of it, yes. And some of it that is incumbent. Yeah, we signed those things real fast, just let you know, we were like, "Lock this down."
David Roberts
So you have some seed money. But the idea is eventually this will be paid for by rates?
Missy Stults
Yeah, yeah, yeah.
David Roberts
So when it comes to something like — I mean, I'm skipping ahead a little bit — but when it comes to something, when you're thinking bigger, you know, like a networked geothermal heating system — we've done several pods on that here at Volts, we love those — but those are big, big infrastructure projects. How do you get the money to do that before you are selling anything from that to ratepayers? Do you know what I mean? Like, how do you get money in advance up front?
Missy Stults
Yeah. So let's dive into this. And then I want to actually go into the network geo because that is an area of work for us too. So the funding I've secured is — think of it like startup capital. It's the funding to hire our executive director and a few other staff. It's the funding to get a billing system. It's the funding for your rate firm to help, you know, like, it's that kind of stuff. It's not the funding to go build the systems. So what we're looking to do in the first tranche is to buy existing systems from big users.
David Roberts
So, rooftop system?
Missy Stults
Or ground mount. Yeah. So the city, right. My job, I have a team member who's—we've gotten a bunch of solar installed at city facilities. What if the SEU acquires all of those right out the gate? And so, you know, day one, it offers a price, and it's got revenue coming in day two, because they already exist.
David Roberts
So wait, buys the solar systems from the city?
Missy Stults
Yep. And buys them from Ann Arbor Public Schools, who have a bunch of solar systems, and our housing commission because we partner to make sure affordable housing is sustainable. So we have somewhere between, I'm going to guess, 6 to 10 megawatts of solar already deployed in the community. And if we bought that first, we don't have to wait to build it. It already exists.
David Roberts
So if I'm a private homeowner with solar on my roof, why would I sell to you? What's my incentive to sell to you?
Missy Stults
Yeah, so we're not going to likely start with individual privates because it takes a lot of — we will eventually offer to buy those, but we want to start with big users. Think about it this way. I just gave you a lot of solar. Let's just, for math, say it's 10 megawatts, but only three clients, right? So your billing system goes to three people. You know, like, you figure things out, you kind of build your muscle a little bit pretty easily before you go to 10,000 households and you're like, "Uh oh, our billing system broke." Right. You don't want to do that.
So that's why we want to start with big users who have a lot of assets, quick. In terms of your value proposition, what you just asked, there's a few things. One, you may not ever have to worry about maintenance, right? Like, it's all the utility. Now, these systems don't really need a lot of maintenance, but for something like a school, you can't go down. You know, like, you got to have continuity. And these are more complex systems than a res system. Two, capital. I mean, if you spend 10 million on projects and it's depreciated today to 7, and I can walk in and cut you a check for $7 million — you got flex funding to do teacher salaries, whatever might be needed, right? And if your rates monthly are lower than your DTE rates for that portion, you can kind of have both things work. Something like a school, they're not in session when it's the sunniest, so it's not really doing much for them.
David Roberts
And they get nothing from owning — I mean, you know what I mean? As long as they're getting the cheap power, that's the benefit. Like, there's no additional benefit to having the deed to the solar panel.
Missy Stults
Other than the green attributes, but you still have them. Because we're not selling the RECs, like, for us, because our goals are tied. They get to say that they're still renewable. Because the RECs are theirs. So it meets a value goal of, like, financial value and perhaps of moral values. They get to check, check. It's educational. Students get to engage in it. So it's an easier win-win, I think, in that scenario, yeah.
David Roberts
School solar is such an obvious win for everyone. I can't believe there's not more attention on it. So you're going to start by buying up some existing solar, rooftop solar installations, maybe some ground mounts.
Missy Stults
We're working on that right now.
David Roberts
And then basically at that point, you will have supply available, and then people can subscribe and basically buy that solar.
Missy Stults
Not yet. So these are all behind-the-meter systems so far. So the idea is you start with behind-the-meter. So the idea of buying existing assets is more about getting the SEU up and operational. Because just like a water system — I mean, think if you're doing a water main replacement, that's a lot of capital you got to go get from the market to replace lots and lots of lines. But we do this all the time. And what they say is, "Okay, great, you've got revenue locked in. Yeah, we'll give you 50 million at a 2% interest rate, go forward."
It's the exact same thing. So once we have revenue, the markets know we're a utility. They understand that. And then you go to normal markets to get your future capital so I can deploy more.
David Roberts
I see. So you're trying to ladder up. And the vision when this is, you know, more fully up and running is that I'm a citizen of Ann Arbor. I can either buy a solar system myself for my roof and sell you my excess power — sell the SEU my excess power — or SEU will come to my house, install, own, and maintain the system, and I will just buy the power from SEU. Those are my two options. And that's going to be the bulk of the sort of initial offering.
There's also this energy waste reduction. I'm assuming that means just like retrofit type of stuff. I mean, does DTE not offer — I thought even the dumb investor-owned utilities, they all have some kind of efficiency program.
Missy Stults
They do, yeah. This is an area where we are exploring a lot of collaboration with DTE because our markets can — some markets are easier to tap into and others are complicated. Ann Arbor is 55% rental.
David Roberts
Yeah.
Missy Stults
And rentals are real hard to get into with EWR. And so we're working with them right now to figure out — we also just passed a green rental policy that's going to require landlords to either do educational work and make some, like, perfunctory kind of changes or actually get a home energy rating score and show performance, so they have some flexibility. But we're working with DTE to say if we get some bad performers in here — we've got houses that have zero insulation — I can get you EWR, like, checkboxes. We can help make sure people are in safe, healthy, affordable homes.
Win-win. So we are looking at collaboration. The idea for us, though, is we can go further, faster. Right. So if we get stacked with DTE —
David Roberts
So as a customer, I check a box, "Yes, I would like XYZ." SEU sends someone to my house, and it's like — how do I pay for that? How does a ratepayer pay for that? Is that free for the ratepayer?
Missy Stults
So basic process, and then I'll tell you EWR. Right now, we have an expression of interest form because there isn't a service, right? So we have about a thousand households that are on this, like, "I want to know more." And we send them about biweekly updates on how things are progressing. Once we're ready to do intakes, we'll then follow up and have them do an intake form where they're telling us, what are you most looking to solve for? Is it cost? Is it resilience? Do you have a health issue? Maybe your grid goes down a lot?
Like, what are your pain points? What are your goals here? And then we'll come out and we'll do an assessment. We'll sit down with them. We, our office, the Office of Sustainability, already runs a free home energy assessment. That is, it's not really like — people are probably assuming a home energy assessment is really just looking at energy. We actually have — it's a decarbonization assessment. So it looks at everything you would have to do to get that home to zero greenhouse gas emissions. Like, it's pretty sweet. So we think we're going to use that assessment and then sit down with them and say, let's say you want solar. "Well, you're real leaky. We really think you should be doing some insulation, air sealing, whatever it is, first. Here are the rebates that are available. Here's the residual. We would on-bill finance that through the utility, right?" So you could stack — assuming there are federal programs and state programs and utility programs.
David Roberts
We say on-bill, we mean on SEU bill, right? You can't, you cannot mess with DTE's bills or billing systems?
Missy Stults
Yes. And DTE does not offer on-bill finance, so that's part of the perks here of us being able to offer it.
David Roberts
Interesting, interesting. So there will be some customer-owned — in your sort of vision here, there's some customer-owned solar, there's some SEU-owned solar, there's some community solar. And the idea eventually is that you want to keep that energy local so that people will be able to sell their excess solar within the community.
Missy Stults
Literally to their neighbors.
David Roberts
That is what SEU is for, basically, is to do that. Let's then talk about, like, if I'm a DTE customer — they're all DTE customers.
Missy Stults
Yeah, everyone is.
David Roberts
And I install a solar system, and currently I'm selling my excess solar to DTE, and you come along and say, "Hey, sell it to SEU instead." This is one of those things where I was like, well, it seems to me like DTE might have something to say about that.
Missy Stults
Well, you know, we got a few things going for us here. One, they have been pushing to have a cap on how much renewables you can sell back in their service territory.
David Roberts
Kidding. I've heard of lowering the price they'll pay you for it.
Missy Stults
Oh, they do that too.
David Roberts
But capping it?
Missy Stults
So we already do have a cap, and we lobbied pretty successfully to get that raised because Ann Arbor blew through the cap itself. Yay. So they're, you know, they would be talking out of both sides of their mouth.
David Roberts
The cap is at a household level or the city level?
Missy Stults
All of the above, actually. You can only generate 110% of your total usage on-site and be connected to DTE's system.
David Roberts
It's crazy pants.
Missy Stults
Exactly. And it gets complicated when someone's electrifying, right? Like if an EV is in your future, what do you do?
David Roberts
Yeah, yeah.
Missy Stults
So that's tricky. So you've got that cap, and then there's a service-wide cap, and I think it's 6% right now of their last year's generation, they cap at what they'll receive. And then they moved from net metering in 20 — I think 18 — to inflow/outflow. So our average rates, we have time-of-use rate, so that messes everything up. But, like, let's just say it's 19 cents. So that's what you're paying. When you overgenerate and you're pushing to the grid, you're getting about seven and a half to eight cents. So yeah, there's no incentive.
David Roberts
This is not like DTE is jealously hoarding the excess solar energy. They don't care and don't seem to want it. Don't even seem to want anyone to build it.
Missy Stults
So we'll take it.
David Roberts
Part of what — yeah, part of what SEU is doing is basically like removing that cap, right?
Missy Stults
That's exactly right.
David Roberts
You can install as much as you want, and we'll take it.
Missy Stults
And even if the economics don't let me, for some reason, get to net metering, I can do better than seven and a half to eight cents, right?
David Roberts
But you don't know yet how much you're going to pay for that.
Missy Stults
That's right. So we did a preliminary rate analysis with Strategy and Consulting where we looked at the variables in the ecosystem and we were testing the sensitivities to figure out, you know, like, "Great, can this work?" Like, can this economically work? Right. Like, really, really, really. And all of those analyses came back that, "Yes, it certainly can. And it can be cost parity, if not cheaper." Now, of course, the federal administration's got some shenanigans afoot, and we're working through that, too.
David Roberts
So if I have solar on my roof and I'm making excess solar, I would likely have every incentive to sell it to you instead of DTE. And you have no reason to believe that DTE is going to stick their beak in that or object to that or mess with that in any way?
Missy Stults
Maybe. You know, we have some really good lawyers at the city, and they're right beside us on this. I mean, it's possible at any point. But, you know, the utility hasn't shown a strong proclivity to want this energy.
David Roberts
Right. So starting up, you'll have a solar offering, solar on roofs with battery storage, obviously. I mean, I'm assuming that, like, the storage is optional.
Missy Stults
That's right.
David Roberts
Because I would kind of think if your goal is resilience, batteries are the thing. Batteries are the magic sauce that make grids better. So I would think that you would be pushing storage everywhere you could.
Missy Stults
This is sort of the kick. I mean, from a sustainability director standpoint, yes. But from a ratepayer standpoint, and if your primary motivation is affordability, you know, if I was in a low-income neighborhood. Right. Like, I can get you solar, no questions asked, for cheaper. Because solar already has an ROI over the life of the asset. So that's not a question. The battery is really when we're talking about resilience or health issues or, or, or. And so that's what we're trying to — at least when the behind-the-meter systems are our start, we've got to really be responsive to what the end users are looking for in their system.
David Roberts
Yeah. And if you don't have a ton of blackouts, like, that's the main customer motivation.
Missy Stults
I mean, we lose power a lot. We just — for short periods of time, and the utility is getting its hand slapped. Like, we're in a performance-based rate-making case right now where we're pushing because of the amount of outages we've had too.
David Roberts
So interesting.
Missy Stults
Like, we're playing both sides.
David Roberts
But you could theoretically fund and build a community battery installation. Theoretically, yes?
Missy Stults
Yeah. As long as I have — I mean, I'd have to build parallel distribution.
David Roberts
I want to get there in a second. I am going to get there in a second. I want to go back to this thing about networked geothermal because, like, financially it makes sense to me, laddering up with solar because those are relatively small increments, small rungs that you can climb. But when you're talking about doing something like networked geothermal, for that you need a big, big, big chunk of capital up front. And ratepayers are not going to advance you money. So again, like, when you run into these big chunks of money that you need, these upfront capital expenditures that you need, where do you get that?
Is it just like you just borrow it like other utilities do?
Missy Stults
That's exactly right. Yeah, exactly right. And for us, we were lucky enough to be one of the communities that won the geothermal, both planning grant and implementation grant. Yeah. So we won $10 million from the US Department of Energy to actually build a networked geothermal system in a neighborhood that we've been working for about four years to make America's first carbon-neutral existing neighborhood.
David Roberts
Oh, interesting.
Missy Stults
Yeah. So that one is one we're waiting on the funds to be released for. But that'll be our first. It's going to happen. It's going to happen. This girl's optimistic.
David Roberts
How confident do you feel about that $10 million?
Missy Stults
Right now, 92% confidence it's coming. It's going to come. We're going to fight.
David Roberts
Knocking on wood. Okay, so, but you think once you have revenue and you're sort of, you know, you've taken your baby steps and you're up and walking, that you will have access to cheap capital in the way that utilities do?
Missy Stults
Yeah, I think that more than that, we have a few things that the utilities don't. We're a triple bond-A-rated city. Investors really like those words. We have no shareholders. So more of the money goes directly back to assets. So our cost of capital is generally notably lower than the utilities.
David Roberts
Really interesting.
So this brings us then to the wires. And this is another main question I have. Love me some wires. Love a distribution grid. But running the distribution grid is sort of definitionally what the investor-owned utility is doing, what DTE is doing.
So you say that's fine. We're not interested in the grid. We're just interested in more clean energy being generated and sent to these households. But if you want to network these solar systems together, that requires wires.
Missy Stults
Yeah, it does.
David Roberts
And it requires wires going across property lines. And traditionally, distributed energy developers bang their heads against this wall everywhere, as I'm sure you know. They can't link their own projects together because only the utility is allowed to string wires across property lines. So what is the legal status there? Are you allowed legally to run your own distribution lines?
Missy Stults
You remember when I led, and I told you we were a municipal utility?
David Roberts
Yeah.
Missy Stults
Who's allowed to run wires? Utilities are. So we win. That's it, right?
David Roberts
But, like, the core — the whole point of the utility franchise, like, literally the whole origin of the utility franchise is that this is a natural monopoly, that wires are a natural monopoly. So if, like, somebody decided, hey, maybe we can just have two [entities] doing wires, that seems like a notable new chapter in the utility story.
Missy Stults
This is unequivocally the story, right? That no one has thought about this because of exactly what you just said. The idea that one side of the street has one, like, line running down it and the other side has another line — well, basically you are taking, you're doubling your cost but halving your rate base. Like, it makes zero sense, right? Like, economics won't work.
But when what you're talking about is, "I'm not running big-scale distribution. I'm connecting 20 homes together in a microgrid." And microgrid is a weird term because I'm not — we haven't figured out what this really is because microgrids always backfeed, or historically do backfeed, to the grid.
So we're trying to figure it out. But work with me here. So you have small-scale distribution such that I have 100 neighborhoods that are their own little grids. That's it, right? I don't have a big-scale grid because, again, the grid's not the goal. That's a pretty expensive proposition. It's also, in every case I've seen, the most vulnerable part of our electric system is the grid.
David Roberts
Sure. I mean, I'm all for the resilience benefits of microgrids. I love a microgrid. I'm just like, it's the legal status of all this that is baffling to me. So you have in Ann Arbor, as far as I know, alone in the United States, two entities that are legally allowed to build distribution infrastructure.
Missy Stults
It is, like, signed, sealed, and delivered in November, when the voters authorized it.
David Roberts
Wild.
Missy Stults
We clearly got permission to become an electric utility. So, we are a municipal utility. We have just chosen for it to be supplemental as to a full replacement.
David Roberts
So your restraint here — we're just going to link houses together, we're not going to try to build any sort of real distribution infrastructure, that's just —
Missy Stults
It's still real. It's just different.
David Roberts
I mean, it's still real. Yeah, it's different. But that's just voluntary restraint. You could, legally, you could build all the distribution infrastructure you want. And here again in my notes, I have, "What does DTE think about this?" Like, I can imagine them making peace with you owning solar systems, but once you're building a competing distribution system, I can see conflicts cropping up there. Are you worried about that at all?
Missy Stults
I mean, a bit. This is, in fact, where we talked about kind of going in on a grant together to really understand these dynamics. Because, if you will, you could imagine that the microgrid really comes into play when the central grid is not operating effectively. And so then you have, from a utility perspective, less crisis. So the way I have conceptualized and thought about this is it's unlikely in most cases that we're providing 100% of someone's electrical usage minute of every day through the SEU, right? I mean, that's not how we're going to start.
We've really thought a lot about starting with critical load. You know, like, my kid doesn't need to have an electric toothbrush going when the power's out, right? We need our refrigerator to not lose all of the items in it. So if we can size the system to do kind of critical-load-plus, that means that it's kind of a win-win for everyone in the ecosystem. DTE is not having to do huge payouts, they're not having to harden in certain ways yet, there's just — all of this is a kind of convoluted way of saying we think that this is actually a value proposition for most stakeholders in the ecosystem that's pretty unique and small-scale distribution.
David Roberts
Including for DTE?
Missy Stults
Yeah. Which is, like, bonkers, eh?
David Roberts
Yeah, it is a little, it is a little bonkers. And again, I would love to hear the words, "I agree with that," out of the mouth of someone at DTE before I, you know, before I take that to the bank. But I mean, that would be nice if it was happy and cooperative.
Missy Stults
I mean, we're not singing kumbaya around a campfire. I do want to be clear about that, like, that there are things that are true. For example, we just signed on Earth Day this year the first heating franchise, traditionally known as gas franchises, in the country that has a climate commitment with DTE. They have agreed if we build network geothermal systems, they will bid and bring the capital to make those systems happen because they see the value as they're trying to figure out their own decarbonization goals on the gas side. This gives them real low-risk opportunity to learn, understand the economics.
Right. So, like, we are trying to find win-wins because of what we started with, this idea of transferability. If I solve this in Ann Arbor, good for me, give me a high five. But, like, we didn't transform the world. If we help an IOU figure out how to become a heating utility — holy crap, right? Like, good job. That's notable.
David Roberts
In a sane world —
Missy Stults
I don't even know where to go with that, but okay.
David Roberts
Immediately you've got to project your mind far away from our current circumstances.
In a sane world, DTE would be doing all this, right? I mean, in a sane world, this is stuff that we want utilities doing everywhere. The only reason you have to do this is that they're not, basically. I mean, we can agree on that, right? Like, theoretically, all of this is, like, absolutely in a utility's remit and makes sense for them to do it, just, like, they'd have to be led straight up to the trough, I guess.
But in a perfect world, DTE would be doing this.
Missy Stults
Exactly. And you know what? I will even throw them an olive branch and say, it's not just DTE. Why isn't every manufacturer doing, like, take back? Why are we responsible for end of life when they're making profit on it? We have people who dump contaminants into our rivers, and then we have to clean it up. They should be — like, "polluter pays" should be rules. If folks are choosing to take the commons and use them in ways that are hurting our health, our safety, and our vitality and viability for future life, they should be held accountable, right?
And so this is an option where we're sort of saying, "We are going to hold you accountable, and we are going to help you get to the level of accountability we want, if you want to come beside us."
David Roberts
Well, obviously you're going to start small, ladder up with small increments. This is a big thing to take on. It will take some time to get it up and running, but in the fullness of time, how much of Ann Arbor's electricity do you aspire to provide? Can you imagine a world where you eventually provide all of it?
Missy Stults
That's a good question. So the math is what I can give you, and then I can — I'll go from — I am known in the office, my team often says, "She's got that look, she's got a Missy-ism." So I will give you the Missy-ism after that. Our analysis shows that we can generate about 400 megawatts of power locally if we use all viable roof space that we have, garages, parking garages, etc. We use around 440, 450 megawatts. Now, to be clear, not every ounce of that 400 is really good. You know, it includes my neighbor's roof, which is like, it's questionable if the economics pencil.
They pencil at scale. They may not pencil individually. But we're doing efficiency, right? So we're trying to drive that number down. But I'm electrifying.
David Roberts
But you're in the same order of magnitude. You're in the ballpark.
Missy Stults
For sure. And then if I, like, gosh, if I start moving heating to geo, that efficiency, like, we're playing ball. Like, we're real close.
David Roberts
That is interesting. And then again, like, again, in my notes, "What would DTE think if, like, eventually a competing utility took all its customers?" More or less, or, like, you know, it'll still have the customers, I guess, but they'll just be sending in, like, what, like a nominal grid fee in the end?
Missy Stults
Yes, if they're still connected. I mean, that's right.
David Roberts
I wonder how they think about that.
Missy Stults
I mean, I'm sure they're not like, "High five, great job, Missy." But the other thing is, the way this works is it's our franchise footprint, so we can only ever be the City of Ann Arbor.
David Roberts
In the actual literal city boundary.
Missy Stults
So worst case, they're losing the city of Ann Arbor.
David Roberts
Right. And they serve millions.
Missy Stults
I think we're like 4% of their usage, maybe 5%. So, yeah, it's not great.
David Roberts
But of course, like — and this brings us to something else I want to talk about, which is, like, you're not just you.
Missy Stults
Exactly. Yeah.
David Roberts
People know what you're doing. It's right there in the newspaper. And plenty of other — you know, I can't imagine that other municipal leaders are not watching this with immense curiosity. Are you hearing from other people?
Missy Stults
Sure am. I spend a lot of time with my peers. Yeah, you betcha. Yeah.
David Roberts
I mean, it's really crazy to me that this is legal —
Missy Stults
Why not?
David Roberts
but never been done.
Missy Stults
I think it wouldn't have been done but for the advancements in distributed energy, right? Because you would have had to have that big centralized system. And so it's only been probably, like, from an economic perspective, only really possible the last 10, maybe 15 years.
David Roberts
And you have no aspirations of going beyond, like, what could you imagine, like, what's the biggest — within the city boundaries you could build, you know, community solar. Is there room for anything big, you know, like wind or, like, a bigger solar plant? Is there any — is there room for anything utility-scale in the city boundaries or are we strictly talking distributed here?
Missy Stults
Yeah, we're pretty built out, and we are doing right now a comprehensive land use plan and exploring things like almost a doubling of population through smart density. So parcels of land are not going to be — I guess this gets to the sustainability director portion. Like, I get to work on energy, but I also have to think about mobility and economic development that's smart in line, right?
So yeah, the connection here is, is how do I get all new developments to have geothermal as opposed to gas connections? How am I getting them to subscribe to the SEU? I'm thinking about those things in terms of development, and how do I bring mixed-use housing so that I can get my next project?
I'm going to speak truth to it because it's going to happen: We're going to launch the largest returnable container program in the country. We're working on it. We don't know how we're going to fund it. We're going to figure it out. But that's going to need a cleaning station, right? And so, how do I have good-paying, family-sustaining jobs but in the city? So I'm not outsourcing sustainability to surrounding areas.
So, like, that's the kind of discussion that I get to have, in addition.
David Roberts
Well, this is, of course, if you talk to people who — local energy proponents, I guess I would say, like, I had Lorenzo Kristov on the pod last year from California, big into this. Precisely what they're advocating, precisely what Lorenzo Kristov is advocating, is having an entity at the local level doing utility work, basically like doing the equivalent of regional planning at the local level: A DSO, a Distribution System Operator, like they have in the UK now, I think.
It sounds like this SEU is in the neighborhood of a DSO, a Distribution System Operator. Although, as we said, you're not technically — you're not operating the wires, but, like, it's in the neighborhood.
But part of the value proposition is that you can integrate local energy planning with local transportation planning and local housing planning and local economic growth planning. Like, you can make all these things work together.
Missy Stults
Yeah. Even local food production, right? Because you need — well, I mean, we need shade in certain areas, but we also have energy intensity of certain things. I mean, here, this one's random: marijuana, right? Like, and as we have data centers that are popping up in the country, these are huge energy hogs, right? Marijuana is actually a shockingly huge energy hog.
David Roberts
I know, I know. It comes up in more and more of the pods.
Missy Stults
That's funny.
David Roberts
Are there things you're not legally allowed to do? Like, what are the limits here? Like, what can you legally not do? You can't operate anything outside of the boundaries of the city.
Missy Stults
That's the franchise. Yeah, there's that. What else? I don't know. I'm sure the lawyers don't want me to answer this question.
David Roberts
Yeah, you probably shouldn't speculate wildly on a podcast about that. But I'm just sort of curious, like, what are the, you know, what are the limits?
Missy Stults
Well, I think we're probably figuring some of them out because just like you were head-scratching as you were reading materials like this. What, what about this? When we talk to our friends at the Public Service Commission, they're like, "Is this even a utility?" We're like, "Yes, here's utility law." They're also trying to think through, "Well, what would we regulate and how would this look?" And, you know, we do energy waste reduction in Michigan is paid by the meter, but households in Ann Arbor will have two meters. So, do they have to pay twice?
We think that's silly. So, what would we do? You know, those are the kinds of questions we've actually submitted filings to the Public Service Commission saying, help us think through it.
David Roberts
Presumably, you have to do a rate case, right? You have rates you want to charge.
Missy Stults
So that we don't have to. Rate cases do not have to, for municipal utilities, go through the Public Service Commission.
David Roberts
Ah, interesting. Do they go through something? City council?
Missy Stults
Yeah, city council.
David Roberts
Interesting. And I was wondering, are there any of these laws in Michigan that prohibit local areas from, like, banning gas and stuff like that? You know, these laws in various states around the country because local people are starting to do the kinds of things you're doing. And state-level people don't always love it.
Missy Stults
We have that dynamic. Yes, they have not passed anything, but also this is an opt-in, so they would have to — one, the Michigan Constitution preserves this right. So they'd have to have a constitutional amendment to take away choice from everyone. That seems like a hard sell. Our franchise — a franchise is a contract. So I did not give you this history, but this is important: Ann Arbor, our electric franchise is so old and there's a wonkiness in Michigan that it's been ruled in perpetuity. So I can't negotiate. Like, Minneapolis is in negotiations right now with Xcel, or they might have just finished them on their franchise — the terms, the conditions, they get a franchise fee, all these great things. I don't get to negotiate. I can't change DTE, like, it is, the courts have ruled time and again it's in perpetuity.
But that is not true on the gas side. So we negotiated that franchise, and we signaled we see an end to gas. A franchise is a contract. So our legislature would have to take away the right of us to contract, right? And goodness gracious, can you imagine the disaster that would be?
David Roberts
I mean, I can imagine a lot of things that I couldn't imagine —
Missy Stults
I guess that's true.
David Roberts
a few years ago.
Missy Stults
That's true. You couldn't do a road contract. You couldn't do a union contract, right? Like, what? So it's, you know, what we're saying here is we believe people have the right to have choice in their system, and most people don't have that right today.
David Roberts
What is, concretely, the GOP murder budget that they just passed — concretely, how does that hurt you? Are there specific grants you're losing or are there regulations? Does it materially affect you?
Missy Stults
I think we're all figuring out the specifics. I can say what we know now in this moment: most of our grants are encumbered. They're signed, we're working on them. They are pretty safe. And the budget didn't take away money that was encumbered. It was unencumbered funds, largely, at least for the things we have. So we're staying the course there. The ITC is not great, you know, losing the tax credits.
David Roberts
Yes. So that's the tax credit for rooftop solar, right? So you're gonna, as of a year from now or whatever, the final deadline — I think it was a year — you're gonna be paying full freight for these rooftop solar. That's a 30% boost in the price. That seems material.
Missy Stults
Yeah. But the thing that we're figuring out is that's true for everyone, right? And our utilities also have renewable portfolio standards and requirements. And so we're trying to understand what's it going to do to energy, period, right? Pricing across the board. So how much it impacts the SEU, we don't know, right? It will obviously be an impact, but will that impact be equal to what the rest of the industry feels? Will it be disproportionately high? Will it be modestly high? So we're still running that one to ground.
David Roberts
I mean, they did specifically go after renewable energy, and you are specifically a renewable energy-only utility. So it would be shocking if you got away completely unscathed.
Missy Stults
Oh, we won't get away unscathed. I just think the reality of the bill is everyone's scathed. I mean, like, we're all injured from it. So it's the question of how deep is our wound in comparison to my brother who's losing his medical insurance, right?
David Roberts
Yes, I know. Or, you know, people getting rounded up. Trouble's all over.
You mentioned renters, that Ann Arbor is 52% renters. I meant to ask this earlier, but just—let's just briefly touch on how renters can benefit from the SEU. Obviously, they can't buy or install solar systems on buildings they don't own. You have some city laws that basically prod rental owners into doing this stuff. What else can renters sort of get out of this? What's the value proposition for renters?
Missy Stults
I think this might be one of the things about the SEU that's — maybe it's one of the top five things that I'm excited about.
David Roberts
Renters always get left behind. They always get screwed by energy policy.
Missy Stults
Right. But we have this split incentive that you clearly know of, right? A landlord's not going to make these investments because, in most cases, they're not paying the utility bills. The tenant's not going to make them because they don't own the property.
Well, the SEU pays all the upfront capital, so the landlord has to expend nothing. The tenants pay those utility bills. That landlord gets to state that their apartment, their home, whatever it is they're renting, now has more resilient power and — ta da.
David Roberts
So you're basically boosting the value of their building for no upfront cost to them.
Missy Stults
And giving the tenants safe, affordable, like, locked-in power.
David Roberts
So why wouldn't they, why wouldn't they all just do it?
Missy Stults
Okay, well, I know that's rhetorical, but I will tell you the number one reason we've heard, and this passed with about 78.78% —
David Roberts
78.78% to form this thing?
Missy Stults
Yeah, it was 78.9% of the voters authorized it. So that tells you 21% were like, "No, thank you." And we talked to them and their answer—it was one of two things. They were confused that this was a full municipalization effort. And so they were like, "I don't want you buying the grid. The grid's not working." And we were like, "Well, that's not it." They're like, "Thank goodness." Or it was, "I don't trust my government to fix the roads. I'm not going to trust it to run a utility."
David Roberts
Yeah, but like, who else is?
Missy Stults
Well, but that said, so, like, there's going to be that landlord, right, who is just going to choose not to do it. And so it doesn't solve it. Like, it doesn't give the tenant full autonomy to go move forward. But it does solve a lot of the problems we see in the system.
David Roberts
Yeah. Interesting. I'll be really curious to see how that plays out.
Missy Stults
Me too.
David Roberts
I find that class of people difficult to predict. I don't totally understand them.
Well, we're short on time. But I did want to get to and let you say a few words about the equity angle on all this. I'm guessing that is not something that DTE excels at, taking care of low-income ratepayers. So what is — how are you integrating that into this setup?
Missy Stults
Yeah, well, this is core to the work that we're doing. In A²ZERO, we have three values: it's sustainability in all of its facets, it's equity, and it's transformation. And transforming our system means doing things like this. It's really questioning why we operate the way we operate and if there's a better way to do it. So equity for us can't be like a lens that I choose to look at problems because that's privileged, right? I happen to be wearing glasses right now; I can take them off and not see the problem if I don't want to.
So we're trying to figure out how it's centered in the work that we do. And so we worked with residents to ask these questions to really understand: What are the pain points in the energy system? What are the barriers to accessing renewables?
David Roberts
Can I ask about Ann Arbor's economic makeup? Like, what is the population we're talking about here?
Missy Stults
Yeah. So we are a pretty darn diverse community. We've grown more diverse over the years, largely thanks to the University of Michigan and the retention of — I think we're, I forget the actual colloquial term they use. It's like the Silicon Valley of the Midwest, because we have just a lot of startups, right, that, like, spun off from the U. So we are, I think, 65-ish percent white, Asian, Black, Latinx, sort of, like, break across the other demographic profiles, or that remaining 35% kind of splits. Income-wise, pretty affluent. Poverty hides really well in Ann Arbor. There's a lot of poverty.
David Roberts
Yeah. Is this one of those situations where urban housing has gotten very expensive, and so a lot of the low-income people end up being driven out to the suburbs, outside city limits type of thing?
Missy Stults
Or what happened is housing has gone up so much that people are aging. So they're house-rich but, like, income poor.
David Roberts
Yes, yes. Classic NIMBYs, those folks.
Missy Stults
It's tough, man. It's rough. So we do say we have a climate crisis and an affordability crisis in Ann Arbor, which is why sometimes, like, this one makes me bristle when people say, "We either can build more housing or we can work on sustainability." And I was like, "Wrong answer." Like, that's a lose-lose proposition.
David Roberts
They are one and the same, are they not? More housing is sustainable.
Missy Stults
Yeah. And building crap housing that is not safe and healthy for people is a terrible solution. Plus, like, I don't know, the climate crisis is real, we're living it. So I work really closely with the head of our affordable housing. We actually fund them to do fully carbon-neutral buildings. We just installed geothermal at a new build. We're working with them on geo at another building, right? Because you got — another image I talk about a lot is when you're in a flood, the first thing you do is turn off the spigot. Yeah, right. Like, you got to stop.
David Roberts
Well, speaking of the spigot, do you have city-level laws on new construction? Like, is new construction required to be geothermal hooked up?
Missy Stults
That'd be nice.
David Roberts
Solar-ready, electric, all-electric, etc.?
Missy Stults
Nah. So here's where I get to, like, be in envy of everyone else. Michigan's building code and energy code are at the state level. They're the floor and the ceiling. So I have no authority. I can only incent people. I cannot require.
David Roberts
Interesting.
Missy Stults
Yay.
David Roberts
I mean, but at a certain point, like, if the whole city is set up to reward renewable energy, you got to think that, like, it would just be perverse at some point to go in there and build a — I mean, presumably you're going to be winding down your gas.
Missy Stults
I mean, the hope is — we are doing a study right now with Stantec of other locations to do our next network geothermal deploys. So we've just done a desktop analysis looking at demographics and variables and heating loads. And now we're getting ready to go put drills in the ground to understand thermal connectivity at three different sites. So we can actually build what comes next, right? Like, what system are we going to move and move and move? We can't take away something without giving someone a really viable alternative. So we're trying to figure out what does this look like?
What's the time horizon, what's the cost? All those things are in play.
David Roberts
And the networked geothermal system, once it's up and running, because DTE has a gas side, which would be the natural or would be the sort of obvious people to be in charge of that — would SEU own and run it, or would you hand it off to DTE in some way at some point?
Missy Stults
No, SEU would own. What we talked to DTE about is we will need someone to bid in, right? We don't know how to run networked geo yet. We haven't done it yet.
David Roberts
I mean, nobody, right? Everybody's figuring that out.
Missy Stults
Exactly. So we would — we're going to have someone who runs that system, and we've encouraged them to really explore if they want to be beside us as that unfolds, to understand the nuances of how they operate, how they could scale it, etc.
David Roberts
Interesting, interesting, interesting. What a fun job you have.
Missy Stults
Well, I spend some time, like, crying.
David Roberts
I know. When you're not feeling traumatized, I bet you feel lucky.
Missy Stults
It's a gift, actually. What a great place to be. It truly is a gift.
David Roberts
Yeah, you're right in the center of so many systems. Well, like, I have to believe that if this works —
Missy Stults
When it works.
David Roberts
when this works, when you pull this off, it's such an obvious thing for other cities to do. I mean, it seems obvious to me if it works, if it's financially viable. Because this is, like, one of the central dilemmas that this pod and that people in clean energy run into again and again and again is: the utility is big and you're small, your city is small, your neighborhood, your house. You have limited power over the utility.
So the idea that it was like, "Well, if you're not going to do it, we're just going to build a second utility and do it." That's a very new thing in the world. And if it catches on, seems like it might be one of the things that, like, spurs utilities to get with it, lest they sit back and watch local utilities pop up all over their territory. You know what I mean? I just wonder how much this is going to spread, whether it's going to spread.
Missy Stults
Well, you know, game on. I would say the highest form of flattery is, you know, obviously, replicating. So the other thing we have in our office a lot right now is "Light shines the brightest in the dark." And so we don't have an option. There is no Planet B, right? Like, we've got to solve for this.
Local governments in the US have always led on climate. We just had an anomaly in the last president, that we had a supporter. I mean, that's the anomaly here. And so, it sucks to be in this position. I really wish we weren't.
We're the places that flood. We're the places that have the extreme heat. We're the places where you shop at the grocery store with your elected leaders. Like, we are the places that will find solutions.
David Roberts
Beautiful and inspiring. Thank you. Thanks for coming on and talking through this, and thanks for — geez — running this fascinating experiment for the rest of us to learn from and maybe copy someday.
Missy Stults
Game on. I appreciate it.
David Roberts
Thank you.
Missy Stults
Yeah, thanks for having me.
David Roberts
Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I'll see you next time.
