Michigan
State Scorecard Rank
15
Michigan
26.0Scored out of 50Updated 12/2022
State Government
Score: 2.5 out of 4.5
State Government Summary List All
Michigan leads by example by setting energy requirements for public buildings, benchmarking energy use, and requiring the use of energy savings performance contracts. The state offers loan and grant programs for energy efficiency investments, including PACE financing.
Financial Incentives List All
The state of Michigan offers the following financial incentives to encourage energy efficiency improvements:
- Michigan Energy Codes Compliance Program: Provides funding for creation of guidance documents that will improve energy code compliance rates in Michigan for both residential and commercial customers.
- Building Operator Training Program: Provides funding for training of public and non-profit building operators to allow these operators to most efficiently operate the buildings they manage.
- Event Sponsorship Funding Opportunity: Provides funding assistance for workshops, conferences, or other events that increase awareness of energy efficiency and/or renewable energy technologies, applications, opportunities, and best practices in the state of Michigan.
- Community Energy Management Program: Funding program to assist community organizations improve the operation of their buildings. This can include energy audits, implementation efforts, and renewable energy installation.
- AgriEnergy and Sustainable Farming: Funding program to help agribusinesses and rural small businesses to implement energy efficiency work or renewable energy installation for onsite use.
- Small Manufacturer's Energy Waste Reduction Pilot Program: Funding program for manufacturers to implement process improvements that will improve the efficiency of their operation.
- Michigan 2030 Districts Program: Support for the three 2030 districts in Michigan (Grand Rapids, Detroit, Ann Arbor) has been done through sponsorships of the organizations responsible for acheiveing the goals for the 2030 district.
- Water Leak Pilot Program: Funding program to inform, recruit, enroll, then complete water efficiency work in two communities in Michigan. The work was required to be completed on supply side piping/fixtures that would reduce the water and energy use in these homes.
- Water Energy Nexus Program: Research project to quantify the energy losses associated with service line leaks in municipal water distribution systems. These energy losses are in the form of pumping and treatment energy from the extraction, treatment, and delivery of water to the service line leaks.
- Charge Up Michigan: Funding to support placement of EV chargers across Michigan. Charger locations should align with the EV Charger Placement Optimization Plan created by a grant through Michigan's State Energy Office. Ideally, costs would be split equally between EGLE, the electric utility, and the site host.
- Optimized EV Charger Placement Plan: Research to determine the optimized locations of EV chargers in Michigan to allow for travel throughout the state of Michigan with an EV. This has been done in several stages including, highways, tourism analysis, select cities, and the Lake Michigan circuit.
Further financial incentive information can be found in the Database of State Incentives for Renewables and Efficiency (DSIRE Michigan). In addition to these state-funded incentives, Michigan has enabled commercial Property Assessed Clean Energy (PACE) financing and has one active program. For additional information on PACE, visit PACENation.
Last Reviewed: August 2022
Equity Metrics and Workforce DevelopmentList All
In Executive Directive 2020-10, the Governor directed the Department of Environment, Great Lakes, and Energy, through its Office of Climate and Energy, to develop, issue, and oversee the implementation of the MI Healthy Climate Plan, which will serve as the action plan for this state to reduce greenhouse gas emissions and transition toward economywide carbon neutrality. In an effort to help achieve this, the Michigan Energy Office created the Five Pillars for a Just Transition. These five pillars are: Catalyst Communities, Moving Industry Towards a Low Carbon Future, Clean Energy for All, Just and Equitable Transportation, and Pay it Forward - Building an Inclusive Workforce.
While the 2008 Clean, Renewable, and Efficient Energy Act set the foundation for many, if not most, of Michigan's present day clean energy standards, the Act did not set any specific policy measures geared towards underserved customers. The Act does, however, call for broad inclusion of low-income customers in proposed energy optimization programs and specifically excludes low-income programs from being adjudicated on cost effectiveness. The most direct means of energy planning for underserved customers comes via the Low-Income Workgroup which was established by the Michigan Public Service Commission as a way to bring together State agencies, utility providers, and community stakeholders every month to address low-income specific issues with the goal of enhancing available initiatives so they may better serve the needs of low-income customers.
Workforce Development
One of the five pillars of Michigan's Just Transition plan is the Pay it Forward - Building an Inclusive Workforce pillar. This pillar focuses on creating clean manufacturing jobs, expanding access to Building Operator Training, removing barriers to clean energy jobs, and utilizing students as a resource by partnering with Historical Black Colleges, Universities/Tribal Colleges and Universities/Hispanic Serving Institutions.
Last Reviewed: July 2021
Carbon Pricing PoliciesList All
The State of Michigan does not yet have carbon pricing policies in place.
Per EO 2020-182, Michigan does have a statewide emissions reduction goal in place, specifically to reduce emissions 100% by 2050 (baseline year 1990).
Last Reviewed: September 2022
Building Energy Disclosure List All
There is no disclosure policy in place.
Last Reviewed: July 2017
Public Building Requirements List All
Public Act 295 renewed and revised the state's commitment to energy efficiency in public buildings. In the area of state government energy efficiency, P.A. 295 sets a goal of reducing state government grid-based energy purchases 25% by 2015, from a 2002 baseline. The law directs the Department of Management and Budget (DMB), in consultation with the state Energy Office, to perform and oversee a number of tasks related to achieving this goal, including the establishment of an energy analysis program to evaluate each building owned or leased by the state at least every five years, as well as an assessment of the costs and benefits of using the LEED standard when constructing or renovating state buildings.
DTMB met the goals of P.A. 295 by achieving a 26% grid-based energy reduction in 2012 based on a 2002 baseline. Aside from P.A. 295, state-owned facilities are to utilize 100% renewable energy by 2025. The state is working with the three major utility companies (DTE, Consumers, and LBWL) to meet this goal.
The MI Healthy Climate Plan lays out goals of state-owned buildings, including carbon neutrality by 2040, reduce energy usage by 40% by 2040, and establish a Green Revolving Fund for renewable energy and energy efficiency projects at state facilities. Also included is a plan for siting solar across state-owned properties, use of water efficiency techniques, and a committment to electrify the state vehicle fleet.
Executive Directive 2007-22 requires that all state buildings occupied by state employees be benchmarked using the ENERGY STAR Portfolio Manager tool. The Governor has tasked the state energy office, Michigan Public Service Commission, and Department of Technology, Management & Budget to develop a plan to benchmark state-owned buildings. The State Energy Office also offers low-cost services to public building owners and others to determine energy savings opportunities. Services include energy audits, Energy Star Portfolio Manager account setup, and a project planning meeting to discuss project financing and implementation.
Last Reviewed: August 2022
Fleets List All
Michigan has committed to electrification of the state's vehicle fleet, starting with $10 million FY2023 budget proposal. However, no specific policy or target is in place or proposed.
Note: For state efficient fleet initiatives, policies listed must make a specific, mandatory requirement for increasing state fleet efficiency. State alternative-fuel vehicle procurement requirements that give a voluntary option to count efficient vehicles are thus not included.
Last Reviewed: August 2022
Energy Savings Performance Contracting List All
PA 625 was passed in 2012 and builds on previous EPC enabling legislation, including PA 122 of 1987, to encourage the use of energy savings performance contracts by state and local governmental units. The Michigan Department of Technology, Management and Budget (DTMB) has begun implementation of the legislation. The legislation designated DTMB as the lead agency in the development and promotion of energy performance contracts in governmental units, requiring DTMB to assemble a list of qualified energy service providers and develop a standardized energy performance contract process and standardized documents. The act also enables the department to charge fees for administrative support/technical assistance from the governmental units that use its services and outlines cost-savings measures that can be implemented including the maximum timeframe by which a measure must demonstrate cost-effectiveness. Municipalities have requested and received Michigan Energy Office technical assistance to plan a large building energy efficiency retrofit project using ESPC. ESPC training was also delivered.
The State Energy Office is participating on behalf of the State of Michigan in the U.S. Department of Energy Performance Contracting Accelerator. The goal is to increase the use of performance contracting in the State by targeting the K-12 and local government audiences. Through the Accelerator, the State Energy Office has participated in the update of model documents and testing of the e-Project Builder database. These tools will be made available to ESCOs and to the targeted audience to increase an understanding of PC. A $35 million ESPC was executed at a state correctional facility, substantially exceeding the state's 3-year investment goal for the Performance Contracting Accelerator.
The State Energy Office participates in the Michigan Chapter of the Energy Services Coalition, which provides education and outreach to entities interested in PC. In 2019, ESC-MI held its 9th Annual Awards event to highlight exceptional ESPC projects in Michigan. Planning for events in 2020 is currently underway.
Last Reviewed: July 2020
Research & Development List All
The Michigan NextEnergy Center is a 501(c)(3) non-profit organization focused on energy efficiency and battery storage that leases laboratory facilities, business incubator space, and other facilities to support the state's alternative energy industry. NextEnergy partners with Michigan Economic Development Corporation (MEDC) to provide energy related services to companies in the areas of energy storage, energy efficiency, mobility, and advanced transportation related issues for both mature and early stage companies. The MEDC has established a matching fund, the MATch (Michigan Accelerating Technologies) Energy Grant, for federal funding opportunities in the energy field from a variety of federal agencies.
NextEnergy also runs the I-Corps Energy and Transportation program in conjunction with UM who is an NSF I-Corp node, and helps with white papers, grant writing, and business plan development. They also provide services for the MEDC Business Development & Attraction teams with match making and generating leads, and they are working with the Automotive team on advanced mobility and Intelligent Transportation Systems (ITS).
The Clean Energy Research Center (CERC) at Oakland University in Rochester, Michigan conducts research to help deliver energy efficiency solutions, new clean energy jobs, and provide natural resource, environmental, and economic technologies. Research includes energy-efficient buildings, solar, CHP, biomass, and wind energy. The Center was first created in March 2011, funded by an initial grant from the Michigan Energy Office and its private sector partner, Energy Systems Group.
In the past, the state has provided funding for the Michigan NextEnergy Center and the Clean Energy Research Center. While these programs are still ongoing, they do not currently receive funding from the state.
Last Reviewed: July 2017
Important Links List All
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Michigan Agency for Energy (MAE) was created in May 2015 to enable better coordination among the Michigan Energy Office, Michigan Public Service Commission, and other energy-related staff/programs. The State Energy Program is administered by the Michigan Energy Office, within MAE.
Buildings
Score: 4 out of 12
Buildings Summary List All
Residential buildings are required to comply with an amended version of the 2015 IECC. Commercial buildings must comply with ASHRAE 90.1-2013 standards. The state has conducted a gap analysis and offers training and outreach.
Residential Codes List All
The 2015 Michigan Residential Code went into effect in February 2016 and is based on the 2015 IECC with Michigan-specific weakening amendments. The state is currently in the process of completing an update of the residential energy code to the most recent IECC 2021 code. Public comments were received during a series of meetings and through written comments and ended on 3/16/2022. There will be another draft released after consideration of the comments submitted and then there will be another public comment period for consideration before the final version is published. The Bureau of Construction Codes is planning to have this code finalized before the end of the calendar year.
Weakening amendments have been adopted for both the residential and commercial codes. Per analysis by the Midwest Energy Efficiency Alliance (MEEA), the Michigan-specific amendments to the residential code reduced the efficiency of the standard (2015 IECC) by 11%; the Michigan-specific amendments to the commercial code reduced the standard (ASHRAE 90.1-2013) by 1%.
Last Reviewed: June 2022
Commercial Code List All
Michigan is currently operating under the 2015c commercial energy code. The state is currently in the process of completing an update of the commercial energy code to the most recent IECC 2021 code. Public comments were received during a series of meetings and through written comments and ended on 3/16/2022. There will be another draft released after consideration of the comments submitted and then there will be another public comment period for consideration before the final version is published. The Bureau of Construction Codes is planning to have this code finalized before the end of the calendar year.
Weakening amendments have been adopted for both the residential and commercial codes. Per analysis by the Midwest Energy Efficiency Alliance (MEEA), the Michigan-specific amendments to the residential code reduced the efficiency of the standard (2015 IECC) by 11%; the Michigan-specific amendments to the commercial code reduced the standard (ASHRAE 90.1-2013) by 1%.
The state has also started a low carbon purchasing policy on state procurement (including appliances) and developed an aggressive QAP green building policy for low-income housing credits. In addition to these efforts, through Governor Whitmer's ED 2020-10 required DTMB to: investigate the cost-effectiveness of energy efficiency opportunities when planning or renovating a building owned or operated by the State; reduce energy use 40% by 2040; make all major renovations of buildings and facilities carbon neutral by 2040.
Last Reviewed: June 2022
Compliance List All
- Baseline & Updated Compliance Studies: A code compliance study was completed by DTE and Consumers in 2015 and 2016, following PNNL protocol.
- Utility Involvement: There are several utilities that participate in the Michigan Energy Code Compliance Collaborative described below.
- Stakeholder Advisory Group: The Michigan Energy Code Compliance Collaborative was established to identify gaps, issues and opportunities to enhance compliance. The collaborative is comprised of builders, contractors, code officials, state agencies, energy raters, utilities, and energy advocates. Total membership has grown to 38 individuals representing 32 organizations. The mission is to facilitate compliance with residential and commercial energy codes through a collaborative stakeholder effort. The group identified and prioritized steps needed to improve compliance with energy codes. The collaborative members have developed several guidance documents, met with leadership of several local jurisdictions, and orgaized and held several workshops and trainings to train local code inspectors/enforcement officials on the technical aspects of the codes. In 2019 there were 5 meetings of this group (two of these meetings were split into separate residential and commercial sub-comittees). There has been 1 meeting in 2020 so far.
- Training/Outreach: In 2020 the COVID-19 pandemic disrupted planned activities for codes education. COVID-19 restrictions did not allow for in person meetings. Uncertainties in how the pandemic would affect tax revenue led to statewide budget freezes. With no funding to support trainings or resource development there was no action taken on code education in 2020.
Last Reviewed: July 2022
CHP
CHP Summary List All
The state has an interconnection standard that applies to CHP and CHP is an eligible resource in the state's renewable energy standard. One new CHP systems came online in Michigan in 2018.
Interconnection StandardsList All
Policy: Michigan Public Service Commission Order, Case # U-13745
Description: Michigan’s interconnection standard delineates five separate tiers of interconnection, and covers systems of all sizes with the largest interconnection tier – 2MW systems and above. However, utilities are the final arbiters of which types of systems and sizes are suitable for their distribution systems. Fees for interconnection range from $100 to $500, depending on system size.
Last Updated: September 2018
Encouraging CHP as a ResourceList All
There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP.
Last Updated: September 2018
Deployment IncentivesList All
There are currently no state policies that provide additional incentives for CHP deployment.
Last Updated: September 2018
Additional Supportive PoliciesList All
Some additional supportive policies exist to encourage CHP in Michigan. In 2008, Michigan introduced its Renewable Energy Standard, requiring the state's utilities to generate 15% of their retail electricity sales from renewable energy resources by 2021. The standard allows utilities to use energy efficiency and advanced cleaner energy systems to meet a limited portion of the requirement. Eligible energy efficiency measures include both changes in equipment and changes in customer behavior directly attributable to an energy efficiency program or energy optimization plan. Advanced cleaner energy facilities are loosely defined as electric generating facilities using a new technology, but industrial CHP powered by renewable fuels is specifically identified as an eligible technology. The compliance period for the standard began in 2012.
The Michigan Agency for Energy and the US Department of Energy have partnered to fund the development of a comprehensive plan to optimize the adoption and implementation of CHP in Michigan. The plan will specifically identify and provide solutions to the barriers and market impediments to CHP adoption in Michigan and an initial assessment of these barriers is currently underway.
The Michigan Public Service Commission formed a working group to assess standby rates and form related recommendations. The final CHP-focused report laid out principles of fair standby rate design.
The Michigan Technical Assistance Pilot for Combined Heat and Power (TAP CHP) offers assistance to facilities to complete feasibility studies and trainings. A CHP training event targeting hospitals and universities drew 102 attendees.
Last Updated: August 2019
Utilities
Score: 13 out of 15
Utilities Summary List All
Michigan's energy efficiency efforts have seen strong growth and revival since 2008 legislation establishing an energy efficiency resource standard. Prior to that, Michigan had a history of fairly aggressive energy efficiency programs until 1995, when demand-side management and integrated resource planning were discontinued during the move toward electric restructuring. Michigan had essentially no utility-sector energy efficiency programs from 1996 to 2008.
Public Act 295 of 2008 (enrolled SB 213) brought energy efficiency programs back to Michigan in the form of an EERS that requires all electric providers (other than alternative electric suppliers) and all rate-regulated natural gas utilities to file energy waste reduction programs with the Michigan Public Service Commission (MPSC or Commission). Public Act 295 offers multiple options for providers of energy efficiency program administration, including administration by the provider, joint administration with other providers, administration by a state agency, or administration by a competitively-selected nonprofit organization.
PA 341 and PA 342, passed in December 2016, carries forward current 1% electric and 0.75% natural gas efficiency targets. The legislation also removes a cap on spending and allows for higher financial performance incentives for exceeding mandated 1% targets. Recent IRPs approved for DTE and Consumers have targeted electric savings ramping up to 2% by 2021, significantly above the statutory minimum (link).
The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.
Last reviewed: August 2020
Customer Energy Efficiency Programs List All
Legislation passed in October 2008, Public Act 295, reestablished utility energy efficiency programs in Michigan. The state's previous programs had been discontinued in 1996. Public Act 295 gave the Michigan Public Service Commission (MPSC) the authority to approve or reject efficiency plan proposals. To approve a plan, the MPSC must determine that the plan meets the utility system resource cost test and is reasonable and prudent. In December 2016, the legislature passed PA 341/PA 342, carrying current 1% electric and 0.75% natural gas targets forward. However, recent IRPs for DTE and Consumers Energy have approved savings targets ramping up to 2% by 2021.
Utilities must offer programs to customers in all sectors (residential, low-income, commercial, and industrial). Eligible large electric customers can design and implement an energy efficiency plan for their own facilities and, if approved by their utilities, be exempt from paying the per-meter surcharge. The utilities may administer the programs themselves, administer the programs jointly with other providers, select a nonprofit to administer the programs, or opt to work with the MPSC-selected program administrator (the Independent Energy Waste Reduction Program Administrator).
Energy efficiency programs are supported by customer rates via a volumetric charge for residential customers and monthly "per meter" charges for commercial and industrial customers. Each utility specifies these charges in plans that are filed with the MPSC. To the extent feasible, the utilities must use the charges collected from each customer rate class to fund efficiency programs for that rate class. Utilities use customer rate classes to attribute costs to different categories of customers based on how those customers incur costs.
PA 295 had capped spending for each utility at 0.75% of total sales revenues in 2009, rising to 2.0% in 2012 and each year thereafter. However this cap was removed, effective April 2017, in the PA 341/PA 342 legislation package.
The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.
Last reviewed: August 2020
Energy Efficiency as a Resource List All
Under Act 295, an objective of the energy waste reduction programs is to reduce long-term costs to utility ratepayers—in particular, by delaying the need for additional power plants. A companion bill that passed at the same time (HB5524) incorporates energy efficiency into the integrated resource planning process. The MPSC has the authority to approve or reject the plans. Any utility seeking a “certificate of necessity” for a new power plant, transmission project, or major power purchase must have demonstrated the need for the capacity addition through an approved integrated resource plan.
In December 2016, the Michigan legislature passed a comprehensive energy bill package (PA 341/PA 342) extending energy savings targets. PA 341 (Section 6t) also enacted a new integrated resource plan (IRP) assessment process. The IRP will serve as the utilities’ short-, medium-, and long-range supply-side and demand-side energy capacity planning process. IRPs have since been approved for Consumers and DTE, both targeting 2% annual electric savings by 2021.
Last reviewed: August 2020
Energy Efficiency Resource Standards List All
Summary: Electric targets set at 1% annual incremental savings. Natural Gas goals require 0.75% annual incremental savings. Targets terminate in 2021 for non-rate regulated utilities, representing approximately 10% of Michigan's electric load. It should be noted utility financial incentives under PA 342 have spurred utilities to pursue upwards of 1.5% annual electric savings. And recent IRPs approved for Consumers and DTE call for 2% savings for 2021 and beyond.
Michigan adopted an EERS in October 2008, when the Clean, Renewable, and Efficient Energy Act was signed into law, requiring all electric and natural gas utilities to provide energy waste reduction programs. PA 295 required electric utilities to achieve 0.3% savings in 2009; 0.5% in 2010; 0.75% in 2011; and 1.0% in each year from 2012 to 2015. Targets continued each year thereafter at 1% incremental electricity savings relative to the prior year’s total retail electricity sales. Targets for natural gas utilities started in 2009 at 0.1% savings as a percent of annual retail natural gas sales, eventually ramping up to 0.75% in each year from 2012 to 2015. PA 342, passed in December 2016, maintains the 1.0% (electric) and 0.75% (gas) targets in perpetuity for most utilities, except for non-rate regulated utilities for which targets extend through 2021. An earlier 2% spending cap for electric and natural gas utilities was also removed by the legislation.
Each MWh of savings achieved by a utility in a given year qualifies for one energy waste reduction credit. Excess credits can be "banked", i.e., can be used to meet up to one-third of the required energy savings in the year following the year in which they were achieved. Excess credits cannot be banked if a utility has opted to receive incentive payments for exceeding its savings targets in a particular year.
Regulated investor-owned utilities are responsible for 88.9% of the statewide electric savings targets; municipal utilities represent 7.8% of savings; and electric cooperatives, 3.4%. Most efficiency programs are administered by the utilities, although some have opted to fund a state-selected program administrator, Efficiency United, through an alternative compliance payment mechanism specified in Act 295. Although Efficiency United program services are not subject to the statutory savings targets, equivalent contractual targets were imposed by the Commission. Large electric customers, as determined by their peak use, may administer their own programs.
Last reviewed: August 2020
Utility Business Model List All
With the passage of Act 342, electric utility providers serving less than 100,000 customers are now eligible to propose a decoupling mechanism for energy efficiency programs.
Previously, Act 295 had been the relevant decoupling legislation. Act 295 mandated that the Commission consider decoupling mechanisms proposed by the state's electric utilities. Consumers Energy and Detroit Edison had decoupling in place (U-15768 and U-15751), but Commission orders on electric utilities were overturned in court on basis of lack of statutory authority (See Michigan Court of Appeals Association of Businesses Advocating Tariff Equity v. Michigan Public Service Commission, April 10, 2012). In light of the Court’s determination, the Commission dismissed all pending cases involving electric revenue decoupling.
Act 295 also authorized natural gas decoupling, which has been implemented in a series of Commission orders. The Commission has approved natural gas decoupling for Michigan Consolidated Gas Company (Docket No. U-15985), Consumers Energy (Docket No. U-15986), and Michigan Gas Utilities (U-15990). Natural gas decoupling was not overturned in the 2012 court case above.
For the period 2017 through 2021, Act 342 allows for a provider to collect a financial performance incentive of up to 20% of program spending if that provider achieves 50% more than the mandated energy savings target. It is a sliding scale from 100% of target up to 150%, and the incentive level spreads from 15% to 20% of program spending.
The Commission approved performance incentives for DTE-Electric and DTE-Gas for program years 2009 through 2013 (U-16358, U-16359, U-16737, U-17282, U-17602, U-16289, U-16290, U-16751, U-17288, U-17608). The Commission has also approved performance incentives for Consumers Energy for program years 2009 through 2013 (U-16302, U-16303, U-16736, U-17281, U-17601). The Commission also approved a performance incentive for SEMCO Gas (U-17362) and Indiana Michigan Power Company (U-17353) for program years 2014 and 2015.
PA 295 (2008) contained two provisions whereby utilities could receive an economic incentive for implementing energy efficiency programs. First, they were allowed to request that energy efficiency program costs be capitalized and earn a normal rate of return. Second, they were allowed to request a performance incentive for shareholders if the utilities exceed the annual energy savings target. Performance incentives could not exceed 15% of the total cost of the energy efficiency programs nor 25% of net benefits. The Commission had approved performance incentives for DTE - Electric and Gas (U-17352, U-17358), and Consumers Energy (U-17351). The Commission also approved a performance incentive for SEMCO gas (U-17362). The Commission approved a performance incentive for Indiana Michigan Power Company (U-17353).
Last reviewed: July 2019
Evaluation, Measurement, & Verification List All
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Primary cost-effectiveness test(s) used: utility cost test
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Secondary cost-effectiveness test(s) used: total resource cost, ratepayer impact measure, participant cost test
The evaluation of ratepayer-funded energy efficiency programs in Michigan relies on legislative mandates under Act 242. Evaluations are administered by the utilities, and Michigan has established formal rules and procedures for evaluation. The state maintains the Michigan Energy Measures Database (MEMD) as a basis for the development of energy efficiency savings calculations.
According to the Database of State Efficiency Screening Practices (DSESP), the primary measure used in Michigan to determine cost effectiveness is the Utility Cost Test (UCT). Secondary tests are TRC, RIM, and PCT. The rules for benefit-cost tests are stated in PA 342.
Further information on cost-effectiveness screening practices for Michigan is available in the Database of State Efficiency Screening Practices (DSESP), a resource of the National Efficiency Screening Project (NESP).
Last Updated: January 2019
Guidelines for Low-Income Energy Efficiency Programs List All
Requirements for State and Utility Support of Low-Income Energy Efficiency Programs
SB 438, approved in December 2016, carried forward the state’s 1% annual energy savings requirement for utilities. The bill does not specify a minimum required level of spending or savings for low-income energy efficiency programs, other than to direct that distribution customers’ funding responsibilities for low-income residential programs be proportionate to the distribution customers’ funding of the total energy waste reduction program: “The established funding level for low-income residential programs shall be provided from each customer rate class in proportion to that customer rate class’s funding” of total energy efficiency programs.
Through a contested case process, utilities which are eligible to receive an incentive payment based on performance, have low income program goals. Some are based on lifetime savings and some are based on increased spending. DTE Energy and Consumers Energy also have a separate metric that assesses additional multi-family housing upgrades.
Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs
Sec. 71 (4)(g) of SB 438 appears to exempt low-income programs from demonstrating cost-effectiveness. To demonstrate that the provider’s energy waste reduction programs, excluding program offerings to low-income residential customers, will collectively be cost effective, SB 438 states: “An energy waste reduction plan shall…demonstrate that the provider’s energy waste reduction programs, excluding program offerings to low-income residential customers, will collectively be cost-effective.”
Coordination of Ratepayer-Funded Low-Income Programs with WAP Services
The Bureau of Community Action and Economic Opportunity (BCAEO) within the Michigan Department of Health and Human Services (DHHS) is responsible for administration of the federal Weatherization Assistance Program (WAP) for the state and for overseeing activities of Michigan Community Action Agencies (CAAs). The CAAs, utilities, and other agencies coordinate at the local level with utility EO programs directly supplementing WAP to streamline efforts and leverage available funding.
MPSC staff, stakeholders and the utilities reached a settlement on plan filings for programs beginning in 2018, which included additional incentive payment percentages based on increased low income programming. MPSC staff meet monthly with low income advocates including other state departments, advocacy groups, housing developers, and utilities to coordinate low-income energy-efficiency resources.
Michigan also distributes funds through the Michigan Energy Assistance Program, which are grants to non-profit organizations who assist the low income with bill payment. Many utilities coordinate their energy efficiency programs with these organizations to further assist low-income households with their home energy needs.
Last reviewed: August 2020
Self Direct and Opt-Out Programs List All
Self-direct is available statewide. Customers must have had an annual peak demand in the preceding year of at least 1 megawatt in the aggregate at all sites. The customer may use the amount of funds that would otherwise have been paid to the utility provider for energy efficiency programs. They must, however, submit the portion of the EE funds that would have been collected and used for low-income programs to their utility provider. They then calculate the energy savings achieved and provide it to their utility provider. In 2018, there were 15 customers self-directing.
Last reviewed: August 2020
Data AccessList All
Guidelines for Third Party Access
In November 2017, the MPSC updated its administrative rules pertaining to data privacy and data accessibility (R 460.101-460.169). These rules took effect in December 2017 and call for utilities to have in place data privacy procedures that assure customers that their personal information will not be distributed to third parties without a customer's knowledge or consent.
R 460.153 calls for all regulated utilities to submit a data privacy policy in the form of a tariff to the Commission. Per R 460.153 (g) the policy must provide clear instructions regarding the method by which a customer and a third party (authorized by the customer) may obtain customer usage data in a timely manner and in a readily accessible format. Order U-18485-0002 in Case No. U-18485 directs regulated utilities to comply with R 460.153 administrative rules by June 8, 2018. . The Commission’s response to the filed data privacy tariffs will be provided in this docket following the June 8 filing deadline.
As of March 2018, Michigan's two largest IOUs have already filed data privacy tariffs per earlier Commission order in Docket U-17102, but are expected to file amended data privacy tariffs in response to the new administrative rules.
Last reviewed: July 2019
Important Links List All
Transportation
Score: 5 out of 13
Transportation Summary List All
Michigan has legislation in place that funnels vehicle registration revenues toward public transportation and transit demand management programs. The state integrates transportation and land use planning, devotes a significant amount of funding to transportation, and has complete streets legislation in place.
Transportation System Efficiency List All
Transportation and Land use Integration: The Michigan Planning Enabling Act of 2008 requires all municipalities to create comprehensive master plans as a guide for future development. In creating these plans, each municipality must consult with adjacent local governments to avoid conflicts in zoning and planning and must also coordinate with all state and federal governments responsible for programs that affect the economic, social and physical aspects of the respective municipality.
VMT Targets: No policy in place or proposed.
Complete Streets: In 2010, Michigan passed HB 135, creating a complete streets advisory council within the state Department of Transportation that was tasked with formulating a complete streets policy for the state by 2012. Municipalities must also address this complete streets policy before finalizing capital infrastructure projects.
FAST Freight Plans and Goals: Michigan has a state freight plan that identifies a multimodal freight network, but it does not include freight energy or greenhouse gas reduction goals.
Last Reviewed: November 2022
Transit Funding List All
The Comprehensive Transportation Fund for Public Transit Programs is funded by 10% of the total Michigan Transportation Fund, however, after deductions, that number was roughly 8.63% for Fiscal Year 2019. These dollars are sourced from fuel tax revenue, vehicle registration revenue, and sales tax on automotive related items.
Last Reviewed: November 2022
Incentives for High-Efficiency Vehicles List All
No policy in place or proposed. However, Executive Directive 2020-01 created the Office of Future Mobility and Electrification in 2020, with a mission of enhancing Michigan’s mobility ecosystem, including developing dynamic mobility and electrification policies and supporting the startup and scale up of emerging technologies and businesses. Among the office's objectives is supporting the transition from internal combustion engine vehicles to EVs and expanding access to charging infrastructure.
Last Reviewed: November 2022
Equitable Access to TransportationList All
Public transit access
Michigan does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, but it does consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners.
MDOT’s Office of Passenger Transportation is directly involved in helping transit providers in southeast Michigan harmonize fare collections as a means of making transit use easier for clients. While this by itself does not expand the coverage area of a transit agency, it does make access easier, and hopefully will encourage greater utilization by clients who have been discouraged by complexity of navigating different systems and payments.
Equity in transportation electrification
- Michigan does not presently impose mandates on the purchase of EVs or requirements for their access to people of underserved communities. However, Governor Whitmer established the Council on Future Mobility and Electrification in 2020 to recommend policies to the legislature. The Council is actively discussing recommendations on incentives for purchase of electric vehicles and ways to structure payments to avoid high initial costs.
- State departments under the guidance of the former Energy Office (now Department of Environment, Great Lakes and Energy) commissioned a comprehensive study of electric charging station optimal placement from Michigan State University. The report has identified the initial places for optimal charging locations to avoid gaps in availability and reduce range anxiety. The report has been embraced by industry partners in planning for new stations. The challenge will be to steadily expand this beginning network to reach more and more communities even where there are not presently EV owners. The Michigan Department of Transportation (MDOT) is researching new options for charging stations on public property as a result of recent guidance from the Federal Highway Administration (FHWA).
- The Office of Future Mobility and Electrification (OFME)is working with colleagues in other midwestern states to develop agreements for multi-state charging routes particularly for freight and commercial movements. While not immediately linked to efforts on equity, these efforts will hopefully bring the benefits of climate responses even in areas of low EV ownership, and will hasten the overall adoption of alternate fuel vehicles.
- The OFME is also developing a guidebook for local units of government to prepare for “EV readiness”. Hopefully, this guide will smooth the decision process at the local level, and begin efforts to incorporate EV use at the local level and in unreached neighborhoods.
Last Reviewed: November 2022