Election Day yielded few bright spots for the transition to clean energy, but there was one in Ann Arbor, Michigan. The city of nearly 120,000 voted 79 percent in favor of a measure to create a ​“sustainable energy utility” (SEU) that will supplement the existing grid and help residents shift to cleaner, more reliable energy.

With that overwhelming approval, city officials will now figure out the governance, staffing, and leadership of the new local utility. They have already begun outreach to residents interested in participating; 600 customers had registered by Tuesday afternoon. The plan is to assemble an initial tranche of 20 megawatts worth of demand, at which point Ann Arbor will finance the purchase and installation of solar panels, batteries, and energy-efficiency upgrades to serve those customers.

Installations — on homes, sheds, schools, libraries — could happen in the next 18 to 24 months, Mayor Christopher Taylor told Canary Media. Longer term, the utility hopes to construct a district-level geothermal network to heat and cool buildings without fossil fuels.

“I’m incredibly gratified by the support that voters of Ann Arbor have given to the SEU,” Taylor said. ​“The SEU is going to be both great for our carbon future and great for the pocketbook.”

The effort to fast-track local clean energy installations serves Ann Arbor’s ambitious climate goals. But it’s also a response to an uptick in power outages as extreme weather collides with for-profit utility DTE’s aging distribution-grid infrastructure. Monopoly utilities, for the most part, have shown little interest in seizing the opportunities of decentralized energy, but that’s core to the new Ann Arbor utility’s mission.

The measure’s success marks the latest episode in a sporadic national trend of communities trying to break free from the century-old model of for-profit, monopoly utilities controlling local energy systems.

Such efforts typically provoke a scorched-earth response from the incumbent utility. Utilities elsewhere have waged lengthy legal battles and spent millions of dollars on political campaigns to stop these escape attempts. When localities win their energy autonomy, they often have to pay hefty exit fees as a reimbursement for grid infrastructure built on their behalf. Communities that make it through that ringer then have to shoulder the laborious task of operating and maintaining decades-old infrastructure while trying to push ahead with new technologies.

In a bracing and punchily worded 2021 report, Ann Arbor’s sustainability office made clear that it would take a different route.

“Every dollar we don’t spend in litigation or to buy the [investor owned utility]’s old, failing infrastructure is money we can spend on new infrastructure here in Ann Arbor to generate power, distribute power, and store power — dollars we can use to immediately provide reliable, clean, and affordable public power to everyone,” the city wrote.

In short, it’s a distributed energy wish list coming to life. Ann Arbor has created a clear pathway to building more clean, local, resilient, and publicly owned infrastructure. If the city can make electricity cheaper on top of that, it will demonstrate that a better electricity system is possible even without completely overhauling the existing utility industry.

Local action for local needs

In 2019, Ann Arbor set a 2030 deadline to deliver equitable, community-wide carbon neutrality. Meeting that target requires sourcing clean electricity, driving out fossil-fuel combustion in buildings, and cleaning up transportation.

But the city’s built environment poses some challenges. Ann Arbor spans about 49,000 households, 52 percent of which are rentals. Overall housing stock averages 48 years old. That necessitates a lot of retrofits to turn these buildings into efficient systems running on clean electricity.

The SEU thus prioritizes energy-efficiency upgrades for customers. Unlike a for-profit utility, the municipally owned nonprofit has no incentive to let customers keep wasting energy. Ann Arbor aims to make efficiency more accessible with tools like on-bill financing, ​“structured to match or be lower than the monthly utility bill savings, resulting in a positive cash-flow for the customer immediately,” per the 2021 report.

The utility can buy equipment like solar panels and batteries in bulk and finance these upgrades with its AAA municipal credit rating, accessing far cheaper capital than a bunch of lone homeowners negotiating separately with private lenders. And the on-bill charge stays with the house — if someone moves out, the new resident takes over paying for the improvements that will lower their bill.

Climate goals weren’t the only factor motivating the change. The area’s aging grid has suffered a number of outages lately.

“Ann Arbor is currently served by an investor-owned utility that has a history of reliability challenges in our area,” Taylor noted. ​“We expect the SEU to provide far more reliable service.”

The SEU plans to install and own solar panels on customers’ rooftops and batteries in their sheds and garages, selling those customers the power at cost, without a markup. That lets residents access solar power and backup power without dropping a load of cash up front for it or taking on debt. This kind of subscription is available from companies like Sunrun, but they do it to make money, not to sell at cost.

The most radical dimension of the plan is to use the city’s utility franchise rights to build wires between properties, so that they can share excess solar power locally. Most everywhere in the country, customer-led upgrades have to stay on the customer side of the utility meter; crossing that boundary to sell power to a neighbor violates the utility’s legally enforced monopoly. This stands in the way of visions for interconnected neighborhoods generating and selling power with each other based on who needs it at a given moment.

But Ann Arbor officials tracked down a century-old precedent that makes sharing power possible: ​“The Michigan Constitution preserves the rights of cities and villages to form their own utility or to supplement an existing utility,” Missy Stults, the city’s sustainability and innovation director, told me.

Thus, the SEU will link up different properties if the people living there want it. If a home generates more solar than it can use, it could run a line to a neighboring house that’s shaded by trees, allowing it to buy surplus power.

“We’ll be able to connect homes with each other, schools with homes, schools with each other,” Taylor said. ​“We’re going to do this in a way that is cost-effective and fully opt-in.”

This plan assumes people will be happy to offer up their roof space for panels that the SEU will own and use for broader community benefit. But doing so will let that household buy cheaper, cleaner power for itself. The battery controls present some additional complications: Will the host customer get first dibs on backup power, or will that be split among the locally connected homes as well? This is new territory for distributed energy in the U.S.

That said, the strong show of support at the ballot box demonstrates the local community is fully on board with the general direction of the SEU. It’s no accident that this idea is coming to fruition in a college town like Ann Arbor, said Liesl Clark, a former state climate leader who now serves as director of climate action engagement at the University of Michigan.

“There are a lot of people who are innovative and also are interested in having agency,” she said. ​“It is a community that was ripe for a solution like this.”

Furthermore, the city structured the plan in a way to minimize any downside for residents who don’t want to jump on the decentralized power opportunity.

“You haven’t asked me how much it’s going to cost the taxpayer,” Taylor told me as I was about to wrap up our phone call. He answered the rhetorical question: ​“Nothing!”

That pledge veers into too-good-to-be-true territory, but the SEU structure makes it possible. The city won’t levy any new taxes because it’s not buying out DTE’s assets. Instead, it’s installing new equipment based on voluntary customer commitments, and those customers pay their way, while saving themselves money.

Breaking free from utilities without all the hassle

The outcome of this effort remains far from certain. But so far, Ann Arbor has managed to pursue a low-drama, low-conflict way to break up with a monopoly utility, in contrast to high-profile recent attempts elsewhere.

The city of Boulder, Colorado, famously fought for a decade to peel off from Xcel Energy, and ultimately gave up. In 2010, California mega-utility PG&E spent $46 million to make it harder for communities to source their own electricity, though even that gargantuan sum failed to stop the rise of community choice aggregators.

Maine has grappled for years with its deeply unpopular monopoly utilities. Last year, voters nonetheless soundly rejected a ballot referendum to seize utility assets under a new public power entity. The utilities spent $40 million to fight it, and independent experts raised concerns about how the public entity would deliver on promises of a cheaper, more efficient grid after saddling itself with billions of dollars of debt.

Activists in Ann Arbor have also pushed for full municipalization — a city-level version of what Maine considered and rejected. The city is working on a second study to dig into the details of what purchasing the grid infrastructure would entail. That conversation will continue as the SEU implementation moves forward, Taylor noted.

For its part, Michigan utility DTE hasn’t declared war on Ann Arbor. Following the vote, the company stated that it will continue to invest in making the city’s grid more resilient and clean — a recent Michigan climate law requires ramping to 60 percent renewable power by 2035 and 100 percent clean electricity by 2040.

The public interest in full municipalization may explain the muted response from the utility: The SEU allows DTE to go on with business as usual, and its distribution grid will continue to play a crucial role even if kilowatt-hour sales decline from the new local solar generation.

Instead of fighting the utility colossus head on, Ann Arbor is taking a live-and-let-live approach. It’s a case where avoiding head-on conflict could make it possible to deliver the benefits of clean, local energy far more quickly.

Voters in Ann Arbor, Michigan, create a local clean energy utility is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

The presidential election may well decide the future of the United States’ ambitious new clean energy agenda, but a handful of smaller, less-discussed races will have a more immediate and direct impact on the energy transition in several different states.

Public utility commissions regulate the monopoly utilities that operate in each state, voting on such matters as what power plants utilities can build and how much money they can charge their captive customers. Each state’s PUC contains three to five commissioners, making the officials some of the most powerful people in the U.S. energy transition. In most states, governors appoint these leaders — but in 10 states, voters elect them.

This November, eight of those states have active races for at least one PUC commissioner: Alabama, Arizona, Louisiana, Montana, Nebraska, North Dakota, Oklahoma, and South Dakota. Georgia canceled its 2024 PUC elections because the state’s bizarre hybrid structure for PUC elections has resulted in a lawsuit claiming voter discrimination: PUC commissioners each represent one of five districts, but they are elected statewide, so the members of each district don’t get to decide who represents them.

Utilities recognize the importance of supporting candidates who share their interests, and spend money accordingly. But most regular people often feel little personal connection to the races or the arcane bureaucracy that unfolds at the commissions, and it can be hard to focus on these details against the raucous political backdrop of a general election.

“These PUC commissioners have the power to determine people’s utility bills, the quality of their utility service, and how their utilities are making investments in different forms of energy,” PUC advocate Charles Hua told Canary Media. ​“Yet, few people can name their state’s PUC commissioners or explain what they do.”

After stints at the Department of Energy and Lawrence Berkeley National Lab, Hua launched a nonprofit called PowerLines this fall to promote greater public awareness of the pivotal roles PUCs play in the clean energy transition. As a nonpartisan entity, PowerLines can’t endorse candidates, but Hua sees plenty of value in simply increasing participation in PUC elections.

That information gap around PUCs leads to ​“down-ballot dropoff,” in which voters select candidates in the better-known races but leave the PUC section blank, Hua said. That means voters miss out on ​“a democratic vehicle to engage with the public officials that are meant to serve the public interest through effective utility regulation.”

The implications for good utility regulation are especially high this year for anyone interested in the transition to cleaner energy, not to mention equity and affordability.

Commissioners control how much electric and gas utilities can charge customers, at a time of soaring energy bills. They’re also uniquely positioned to help get the U.S. grid on track to meet climate goals, at least on a state-by-state level, by approving more cheap, clean energy instead of letting utilities continue to expand fossil-fueled infrastructure. And PUCs can direct utilities to rebuild their grids in a more resilient way following destructive extreme weather like hurricanes Helene and Milton.

PUC commissioners wade through the technocratic morass of utility regulation and make choices that affect Americans’ pocketbooks. That’s why Hua says it’s so important for those who have the opportunity to vote in PUC races to do so, and to keep an eye on what their commission does the rest of the time.

With that in mind, let’s take a closer look at Arizona and Louisiana, two states where the stakes for the clean energy transition are particularly high this year.

Arizona could return to ambitious clean energy policy

Three of five seats are up for the Grand Canyon State’s PUC, which is called the Arizona Corporation Commission. Anna Tovar, the lone Democrat on the commission, is not running for reelection, nor is Republican James O’Connor. Republican Lea Márquez Peterson is running for another four-year term.

Arizonans get to vote statewide for the slate of PUC commissioners, and the top three vote-getters each win a seat. There are three Democrats and three Republicans running, and Arizona’s closely contested recent election cycles mean anything could happen — the commission could swing in a more pro–clean energy direction, or toward more fossil-friendly regulation.

That’s significant, because the ACC’s recent past illustrates the power of elected PUCs more clearly than perhaps in any other state. In 2018, the all-Republican commission boldly rebuked the planning proposal from the state’s largest utility, Arizona Public Service. Then the commissioners went further, imposing a moratorium on new gas plant construction, based on conservative principles: With the energy sector changing so quickly, they wouldn’t let utilities charge their customers for a bunch of expensive gas plants when other quickly maturing options could prove more cost-effective.

Those commissioners later developed their own clean energy standard, and nearly approved it, which would have been a rare instance of a proactive clean energy target coming from a PUC instead of a legislature. But the commission’s debate dragged on as state politics became increasingly contentious, and the proposal was ultimately voted down 3-2 in January 2022. Early this year, the commission voted to end the meager renewable energy standard that had been on the books for 15 years.

In AZ Central’s survey of PUC candidate views, Democrats Ylenia Aguilar, Jonathon Hill, and Joshua Polacheck each affirmed that they want Arizona to tap into more of its renewable power potential. If elected, they could push to revive the clean electricity standard, although that would be a long shot. They could also push to strengthen policies for energy efficiency and distributed energy.

That’s not to say the Republicans oppose clean energy — they just equate binding clean energy targets with adding costs for customers, which they oppose.

For instance, Márquez Peterson says she ​“supports the voluntary commitments made by our utilities for 100 percent clean and affordable energy by 2050 for Arizona.” She also wants to ​“avoid costly mandates and corporate subsidies.” Republican Rachel Walden told AZ Central that ​“forced energy investments and climate goals put the ratepayer last and thwart free market principles.”

This line of argument leaves it to utilities to pursue their own corporate targets. As it happens, solar power in dry, sunny Arizona is ridiculously cheap, and the utilities have jumped on the trend. But the lack of a long-term roadmap for the state leaves room for more gas construction in the meantime, and complicates the kind of long-term planning needed to achieve a carbon-free grid in the coming decades.

Whoever wins, the commission is sure to face capacious gas-plant proposals from utilities to meet soaring demand for data centers and new chip factories (plus some lithium-ion battery manufacturing) in the Phoenix area.

Louisiana to replace swing vote on energy issues

Louisiana’s PUC just did something the state government never accomplished: pass a modern energy-efficiency program to save households money. Now one of the architects of that program is retiring, and voters can pick his replacement.

Advocates had pushed for such a program for years, but it finally passed thanks to two commissioners with seemingly dissimilar perspectives: progressive Democrat Davante Lewis, who campaigned on climate justice; and Republican Craig Greene, a former LSU football player and orthopedic surgeon who supports market-based reforms. They both found common ground in the desire to push the state’s monopoly utility to invest in measures to reduce wasteful energy consumption and thereby save customers money. The commissioners recently selected a third-party administrator to run this program.

“Commissioner Greene has been an important champion for things like energy efficiency, and has even taken steps to move renewable energy forward in the state,” said Logan Burke, executive director of the Louisiana consumer advocacy nonprofit Alliance for Affordable Energy. ​“The seat he is in has historically been considered a ​‘swing’ vote between the two red and two blue districts.”

But Greene decided not to seek reelection as a commissioner, which in Louisiana is a part-time role. That means his seat in District 2 is up for grabs: If Greene’s successor doesn’t share his support for the efficiency measures, it could jeopardize the fledgling, long-awaited program. And this swing vote could prove decisive in decisions on new power-plant construction to meet an expected surge in electricity demand.

Democrat Nick Laborde is competing with Republicans Jean-Paul Coussan and Julie Quinn for the seat. Some 70 percent of voters in this district picked Donald Trump for president in 2020, according to the local outlet Louisiana Illuminator.

Laborde has business experience running a consulting firm and serving as product manager at NOLA Crawfish Bread, an unusually delicious experience for a prospective utility regulator. He has said he supports more renewables and wants to ​“make utilities pay more instead of raising your bill.”

Coussan’s campaign website doesn’t say much about his views on the energy system, but he does promise to regulate as ​“a true conservative watchdog, and someone who understands the importance of the role that affordable and reliable energy plays in bringing jobs to our state.” That assertion could mean Coussan would stand up to utility attempts to raise rates on customers; then again, utilities in Louisiana and elsewhere have used an emphasis on ​“reliability” to push for expensive gas-plant construction in circumstances of dubious value.

Quinn promises to ​“rein in unnecessary utility company spending that results in rising utility rates,” and to ​“oppose liberal-thinking Green New Deal initiatives that are unrealistic and costly.” But one target of Biden administration clean energy funding has piqued her interest: Quinn would like to ​“explore micro-nuclear facilities to lower utility rates.” No commercial microreactor has been built on the U.S. grid, much less lowered anyone’s rates, despite years of trying.

The Alliance for Affordable Energy does not endorse candidates, per the rules governing 501(c)(3) nonprofits. Instead, the group focuses on get-out-the-vote efforts and education about the commission, Burke told Canary Media. She’s also keeping an eye on what candidates say about transmission planning and expansion, which could open up vast new supplies of clean energy for the state.

“If we don’t get the transmission planning we need, we’ll just get 40 more years of new gas plants,” Burke said. ​“That won’t help anyone but Entergy,” the state’s largest monopoly utility.

Clean energy is on the ballot in these utility regulator races is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.