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Michigan officials sign off on special electric rates to retain, attract EV industry

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State officials recently approved special discounted rates for industrial customers of Michigan’s two largest electric utilities, an effort to keep manufacturing here and encourage more economic development.

The Michigan Public Service Commission last week approved requests from both DTE Energy and Consumers Energy for special rates for high-volume industrial customers. The goal is to bolster the state’s ability to compete for electric vehicle production opportunities and other high-tech manufacturing, officials said.

The utility companies in November applied for the special rates not just for EV producers, but also electric battery storage, semiconductor, chip, and other high-tech manufacturers. Officials said they also want to encourage existing industry to remain in Michigan as technology changes and power needs increase.

Brian Rich, Consumers Energy’s chief customer officer, said the company appreciates the MPSC’s quick approval of the special industrial power rates. He said they want to “go the extra mile to bring new jobs to Michigan.”

The company – the state’s largest energy provider – said in its rate application officials knew of 10 projects for which Michigan was actively being considered, to the tune of $65 billion in investment and about 21,000 new jobs.

Consumers officials argued rather than negotiating with each additional industrial customer, the new rate category for energy-intensive customers would be attractive for manufacturers who need incremental electric loads at a minimum 35 megawatts on at least 15-year contracts. The company was previously authorized by the MPSC to offer two similar special rate programs for industry and intensive users.

The MPSC also signed off on DTE Electric’s request for a high-load rate for current or advanced manufacturers like those setting up EV production lines. That special rate would be for large-volume customers that add incremental loads of 50 megawatts, also on at least 15-year contracts.

An industry association leader said the approved special rates will be good for the state’s economy.

“We think it’s an important move to help make Michigan more competitive because we all have to be in it to win it in terms of our competition with other states who want what Michigan has – that is our manufacturing might as we transition from the internal combustion engine to electrification,” said Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association.

“Billions of dollars are going to be invested. And the question is, will they be invested here in Michigan?”

Johnston said the MMA believes it’s an important move to use electric rates as part of the effort to attract such “transformational investment.”

The move has its critics, though.

Charlotte Jameson, program director for legislative affairs, energy and drinking water for nonprofit Michigan Environmental Council, said residential customers have shouldered the burden of ever-increasing rates for more than a decade while the grid provided some of the worst reliability.

“It is galling that while residential ratepayers have been suffering from high rates with no relief, the second industrial customers complain about high rates the commission leaps to action to give them a large discount,” Jameson said.

The MPSC recently approved hikes to regular customer rates for both DTE and Consumers, both with action plans meant to improve the company’s systems and reduce the number and length of power outages.

The recent summer’s series of strong and damaging thunderstorms proved how vulnerable the state’s power grid is to outages, particularly from fallen branches and toppled trees in heavily forested Michigan. Approximately 2.4 million customers were left without electricity at some point during the stormy summer, some for as many or more than seven days.

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DTE Energy to stop burning coal at Belle River Power Plant in 2028, earlier than planned

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