Michigan has the 11th highest average energy burden in the US

A new factsheet reveals Michigan ranks 11th worst for energy affordability in the US. That's in the top quarter of the country as having the least affordable energy (gas + electric) bills. As discussed in the previous article, the Energy Equity Project (EEP) is a Michigan based collaborative that supports frontline organizations across the country advocating for environmental justice communities, eliminiating shutoffs, increasing access to clean energy and lowering energy burden. Earlier this month EEP hosted a webinar presenting their findings concerning the overall trends in residential utility rates.

Energy Equity Project Factsheets Webinar Graphic

As industrial customers enjoy steady rates that allow them to build wealth and plan for the future, residential ratepayers continue to experience mounting increases in their gas and electric bills. EEP reported a residential rate increase of 44% in Michigan and Ohio from 2010 to 2023, a 238% increase over that of industrial rates.

There's a direct correlation between rate hikes for residential customers and shutoffs. There were more than half of a million shutoffs in Michigan (321,000) and Ohio (344,000) since 2010. As utility companies tout a need for increased revenues to increase reliability in their rate proposals, unaffordability continues to decrease utility access for a growing number of customers. 

Temporary shutoff moratoriums during the covid pandemic restricted shutoffs across seventeen states and required shutoff reporting in order to protect customers. As soon as three years following the pandemic, less than half of states continue reporting as shutoffs increase nationwide. This not only leaves customers vulnerable but also creates data gaps for those frontline advocacy organizations that support those customers. EEP exists to close these gaps while inciting regulatory change that mandates timely, community specific, transparent reporting. Utilities should be required to provide the data needed in order for them to be held accountable, companies cannot continue to bulldoze customers while using shutoffs as a way to bully the most vulnerable often disabled, elderly and impoverished ratepayers. 

As DTE proposes a $574 million rate hike for resident ratepayers, Michiganders are already drowning in what feels like an economic crisis nationwide. Industrial prices aren't even increasing at half the rate. Electric rates for residential customers ($0.19/kWh) have increased 51% since 2010 while industrial customer rates ($0.08/kWh) have only increased 15%. EEP's findings also show that 25% of Michigan households have an unaffordable energy burden, meaning one in every four families are spending much more on gas and electricity costs than the 6% that DOE recommends. That's nearly one million households!

EEP reports show Michigan's energy affordability crisis is a more than $14 billion gap with 998,578 households crushing under a $1.25 billion deficit in energy affordability while 3,010,663 households are floating above an excess of $12.90 billion before exceeding the affordability threshold. Cost sharing across income classes would address this by passing the surplus from energy affordability stable households on to service those with high energy burdens. This would increase costs for households that can afford it in order to alleviate the quarter of Michigan households suffering with unaffordable energy bills. 

Another strategy that EEP recommends is establishing an equitable rate for commercial and industrial sales. Balancing the weight of rates between residential, commercial and industrial customers would reduce the burden on residential customers by increasing rates for larger ratepayers. This would naturally lower residential unaffordability and shutoffs as a result. 

EEPs research puts the numbers behind the advocacy work that frontline organizations like WWGT do everyday. EEP's data is critical in regulatory spaces where numbers around shutoffs, increased rates and energy burden calculations have more of an influences on regulators than personal stories told by impacted people. However data reporting is becoming less frequent putting this type of advocacy work in jeopardy. EEP is combatting this with resources, supporting non profit organizations, advocacy groups and regulatory intervenors like WWGT combining these stories with the data in order to have the most powerful impact towards advancing critical environmental justice change.