Public Power Group’s Legal Analysis Contests Feasibility Study Results
Ann Arbor, Michigan, March 14, 2024. Ann Arbor for Public Power (A2P2), a nonprofit that advocates for a municipal electric utility to replace DTE, recently commissioned an independent legal analysis of the city’s “100% Renewable Energy Options Analysis,” conducted by 5Lakes Energy. This analysis found many errors in the study, which distorted its conclusions regarding the feasibility of a municipal electric utility (MEU). Importantly, the study vastly overestimates the high end acquisition cost. Also, the study’s assumption that the MEU cannot be accomplished by 2030 is not supported by evidence, and the basis of the MEU’s equity & justice rating is incorrect. Environmental attorney Chris Bzdok, of Troposphere Legal PLC, conducted the review on behalf of A2P2. Click here for legal analysis.
“Mr. Bzdok’s analysis confirms our earlier doubts about the report’s conclusions, in particular its high end cost estimates” says A2P2 president Greg Woodring.
A2P2 sent its findings to the city and to 5Lakes, which have stood by the study, but have not refuted the substance of Mr. Bzdok’s analysis. “We regret that the city and its contractor have chosen not to correct the study,” Woodring says.
The main errors in the report:
- Ann Arbor’s high end “stranded cost” obligation (compensation to DTE for assets that will earn less after Ann Arbor leaves DTE’s service area), is inflated due to improper application of the Federal Energy Regulatory Commission (FERC) stranded cost rule.
- The study’s authors, in their stranded cost calculations, included not only stranded generation costs, which are allowed, but also distribution costs, which almost certainly are not, according to the FERC rule and a Michigan legal precedent.
- The study assumed 20 years of stranded generation at a time when DTE is planning to add substantial capacity to replace its retiring coal plants. There is no realistic scenario where DTE would be stranding any capacity for 20 years after Ann Arbor leaves.
- The study presents no evidence to support its assumption that Ann Arbor cannot municipalize by 2030. Several cities have accomplished this in less time.
- The “poor to fair” equity & justice rating that the study assigns to the MEU is largely based on the utility’s assumed inability to provide lower rates to low income customers. In fact, there is nothing keeping MEU from offering low income assistance.
Despite these errors, the 5Lakes study does recommend a phase 2 MEU feasibility study. “A2P2 should be involved in designing phase 2, selecting the contractor, and evaluating the results,” Woodring says. “We continue to strive for a partnership with the city with the shared goal of achieving decarbonization, and part of that is ensuring a fair and accurate phase 2 study”.
Contact: Greg Woodring
President, Ann Arbor for Public Power
annarborpublicpower@gmail.com
(231) 288-7228
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Executive Director – Ann Arbor for Public Power
734-330-3795
brian.geiringer@gmail.com
Greg Woodring
President – Ann Arbor for Public Power
231-288-7228
woodringg95@gmail.com