MI’s Climate Plan Must Deliver Affordable, Efficient Homes

On January 19th, 2022 Governor Whitmer’s Department of Environment, Great Lakes, and Energy (EGLE) released the first draft of its climate action plan, the MI Healthy Climate Plan. The draft is a roadmap for Michigan to reach carbon neutrality economy-wide by 2050. In a recent blog, NRDC’s Michigan Clean Energy Advocate and member of the Council on Climate Solutions Derrell Slaughter discusses the importance of all Michiganders to participate in the MI Healthy Climate Plan public comment period.

While the plan includes notable recommendations to reduce emissions in key sectors such as the power and transportation sectors, it simply does not go far enough in focus and ambition to meaningfully reduce emissions in buildings and homes and to establish equitable processes to inform decision-making and execution of the climate plan.

Energy Efficiency & Energy Affordability

Arguably, the main buildings-related climate commitment in the draft plan relates to energy efficiency. Under Michigan’s existing energy efficiency law, utility companies are required to achieve annual energy savings targets of at least 1% for electric utilities and 0.75% for gas utilities. The draft plan calls for increasing these annual savings targets to 2% and 1% respectively. However, DTE and Consumers Energy—the two largest investor-owned utilities in the state—have already been instructed by the state utility regulator to achieve similar savings levels. While it’s better to have those goals officially enshrined in law, the draft proposal doesn’t move the needle much beyond the status quo.

More broadly, the draft plan misses an opportunity to leverage energy efficiency investments to address energy affordability and equity. Energy efficiency and weatherization are one of the most effective means of ensuring long-term energy affordability for families struggling to pay utility bills. However, many efficiency programs fail to reach the households that experience the highest energy burdens (the portion of income paid toward energy bills), including lower-income households and households of color. In Detroit, for example, Black and low-income households face the highest median energy burdens. The median energy burden of Black households in the city is 54% higher than that of non-Hispanic white households. Despite this, energy efficiency programs have historically underserved Michigan’s most energy-burdened communities. According to a 2016 study by the University of Michigan’s Urban Energy Justice Lab, 35% of state residents qualify for low-income energy efficiency programs, but only about 12% and 17% of electric efficiency investments by Consumers Energy and DTE Energy went into programs aimed at low-income households. While these investments have increased incrementally since 2016, low-income households are still not equitably benefiting from energy efficiency programs in Michigan–especially when accounting for historical underinvestment.

To ensure energy efficiency efforts are prioritized in the most energy-burdened communities, it is essential that programs are designed to reach those communities. Yet, the state of Michigan has no utility requirement for low-income energy efficiency savings or spending, which many other states include. In addition, best practice programs intentionally target low-income households and multifamily buildings; focus on longer-lived, high-impact energy efficiency measures like air sealing, insulation, and heat pumps; dedicate funding to make home repairs that would otherwise prevent energy efficiency work;  and more. While utilities in Michigan have begun making case-by-case commitments to some of these items, the draft plan fails to include any sort of state-wide, long-term commitment to these key energy efficiency elements. Michigan must include concrete commitments to deep, innovative best energy efficiency as a pathway to energy affordability and equity in its climate plan.

Equitable Building Electrification  & the Transition Away from Fossil Fuels

In addition, the draft plan should lay out a long-term vision for equitable building decarbonization – replacing gas, propane and oil powered appliances in buildings with highly efficient electric appliances powered by 100% clean electricity in a way that prioritizes the most vulnerable communities. As the plan references, residential and commercial buildings account for approximately 20% of the state’s total energy related carbon emissions. Calling for a state-wide study on the impacts of building electrification is a start, but a path towards 52% emissions reductions by 2030 and net-zero emissions by 2050 requires bold and immediate action and an ambitious long-term plan.

Alongside recommending the adoption of the 2021 Model Energy Code with provisions to support renewable energy and building decarbonization in new construction, it is essential that the draft plan propose strategies to fully and equitably decarbonize existing buildings, particularly those in underserved and Black and Brown communities. Michigan should follow the lead of fellow Midwestern states Minnesota and Illinois and express explicit support for passing legislation that establishes incentive pathways for fuel-switching retrofits – switching from fossil fuel powered appliances to clean, efficient, electric appliances such as cold climate heat pumps – that will reduce greenhouse gas emissions, indoor air pollution, and energy bills for all Michiganders. It should prioritize these efforts in underserved communities by requiring a certain percentage of efficient electrification in low-income homes and couple these efforts with policies to ensure that renters are not displaced due to the increased value of their homes post retro-fit.

In concurrence with accelerating equitable building decarbonization efforts, the draft plan should also address strategies for pursuing an equitable transition away from our current fossil gas utility system. In the interest of people and communities–not gas companies–Michigan should look to meet the heating and cooking needs of its residents in the cleanest, healthiest, most affordable way. It should follow the lead of states such as Minnesota, California, and New York and present a vision for a stakeholder gas system planning process that will identify ways to decarbonize Michigan’s gas utility system in an affordable and equitable manner that mitigates impacts to customer bills and avoids wasting resources on new fossil fuel infrastructure incompatible with a liveable climate future.

Equitable and Just Processes/Solutions

In order for energy efficiency and building decarbonization programs to reach all Michigan communities, decision-making rooms and processes need to look and feel different. Decisions around climate and energy programs have been inaccessible and exclusive for too long. This is a key inflection point for Michigan’s elected leaders to shift who gets to decide what Michigan’s energy future looks like and who gets to benefit from new solutions. While the Plan has an environmental justice (EJ) section, and one listening session dedicated to EJ issues - the draft recommendations and Plan need to go much further on this.

Facilitating Power’s Spectrum of Community Engagement to Ownership, includes a guide for how to shift climate decision-making spaces, and states that “the key to closing equity gaps and resolving climate vulnerability is direct participation by impacted communities in the development and implementation of solutions and policy decisions that directly impact them.” If the MI Healthy Climate Plan is going to succeed, then collaborative, community-driven solutions must be prioritized throughout the final recommendations and implementation of the plan.

Summary Recommendations 

As the roadmap for Michigan’s path to a net-zero future, it is essential that the final plan lay out a long-term vision for equitably and fully decarbonizing Michigan’s buildings sector in a way that prioritizes and benefits the most vulnerable communities. Four explicit recommendations to incorporate in the final plan include:

• Ensure energy efficiency investments explicitly address energy affordability and equity
• Include incentive pathways for fuel-switching retrofits that electrify homes
• Present a vision for equitably decarbonizing Michigan’s gas utility system
• Integrate community-driven decision-making into the final plan and its execution

How to Share Feedback on the MI Healthy Climate Plan Draft

With the MI Healthy Climate Plan still in draft form, there’s an opportunity now to influence it. The shortcomings identified by us and others will go unaddressed without the voices of Michiganders. Start by reading through the draft plan, and then anyone can share feedback by:

• Submitting written comment on the draft plan via email by March 14 at EGLE-ClimateSolutions@Michigan.gov
• Participating in an upcoming virtual public hearing and give a verbal comment:
  • Public hearing Feb 8th (Link to Register)
  • Public hearing - Feb 14th (Environmental Justice focused) (Link to Register)