Michigan law likely doesn’t allow for income-based energy bills

While DTE Energy CEO Jerry Norcia takes a personal interest in income-based energy bills, any such program would likely require a change in state law, Michigan’s energy regulator says.

Norcia told the Michigan House Energy Committee last month that energy affordability is a personal passion. He explained his affordability vision in two parts:

• Income-based energy bills
• Lower usage rates by low-income households

Read more about Norcia’s plan here.

Related reading: DTE boss warns ‘sometimes you can’t count on’ wind and solar

But Norcia’s perfect world smacks up against reality. Michigan, for the most part, only allows customers to be charged for the energy they use.

“Under Michigan law, utility rates traditionally have been required to be based on cost of service principles,” Matt Helms, a spokesman for the Michigan Public Service Commission, told Michigan Capitol Confidential in an email Tuesday. “The (commission) has in limited circumstances approved limited pilot programs that cap the amount of customer bills based on a percentage of income. A broader change such as setting rates based on income levels or a percentage of income would likely require statutory change, which is a matter for the Legislature to address.”

That means Michigan’s energy regulator does not have the unilateral power to allow income-based energy bills. That would take an act of state law.

California last year passed a law empowering its energy regulator to set rates for income-based energy bills, per media reports. That plan is due July 1, 2024, and bills are expected to reflect the new rates by 2025.