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DTE's Distributed Energy Tariff

On May 2, 2019, the Michigan Public Service Commission (PSC) made its decision on the rate case filed by DTE Energy (U-20162) that determined the new 'net metering' policy for DTE customers which is now called the 'distributed energy tariff.' This was the conclusion of a 10 month process where GLREA was speaking up for solar users and for the general public that is interested in solar in the future.


The Public Service Commission rejected DTE's proposal and adopted a new net-metering policy much closer to what GLREA and others recommended.


The PSC adopted a new approach called the 'In-Flow / Out-Flow’ billing mechanism.  When a homeowner (solar or non-solar) buys electricity from a utility they will pay the normal retail rate (this is In-Flow).  But if a solar owner sells excess electricity from their solar system back to the utility, this is 'Out-Flow.'  The Public Service Commssion on May 2, 2019 decided that this Out-Flow electricity should be compensated at 7.44 cents per kilowatt-hour to solar customers. This amount is less than the older net metering amount where a solar owner is compensated at the retail rate for selling electricity back to the utility.

But this rate is a lot better than what DTE wanted to pay which was the 'locational marginal price' which essentially means the wholesale price of about 3 cents per kilowatt-hour. 


On top of that, DTE wanted solar owners to pay a new monthly fee called a 'system access charge.'  The amount of this new fee would have depended on the size of your solar system.  This new fee would have been $2.30 per kilowatt.  So for a homeowner with a 6 to 8 kilowatt system, they would have paid an additional $13.80 to $18.40 every month. But the Public Service Commissioners flatly rejected this saying that DTE had no data to justify this fee.

If DTE's proposal had been approved, the combination of these two changes proposed by DTE would have undermined the economic rationale for installing a solar system, which must have been the goal of DTE.  They are trying to make homeowners and business think twice about installing their own energy system.  DTE doesn't want rate payers generating their own electricity and not buying from them because they want to maintain their monopoly control on generating and selling electricity. The Great Lakes Renewable Energy Association (GLREA) believes this is flat-out wrong and that all individuals, homeowners and business should have the freedom and the right to install a renewable energy system to generate their own electricity. 

This process of changing the 'net-metering' law in Michigan began in 2016 when the Michigan Legislature enacted a new energy law Public Act 341, which required the Public Service Commission (PSC) to conduct a study to determine the value of solar energy and then propose a ‘distributed energy tariff’ to replace the net-metering law that had been in place since 2008.  The PSC completed this study in April 2018 and then began working with utilities to determine the final 'distributed energy tariff.'

DTE was the first utility to file a rate-case and propose what they wanted for a 'distributed energy tariff.' Unfortunately DTE's proposal was really bad and if it had been approved by the Public Service Commission, it would have slowed down the expansion of solar for homeowners and small business in DTE's service area. But after GLREA and other organizations strongly argued that homeowners and business have the right to purchase and own their own renewable energy system and that what DTE proposed wasn't based on real data as to the cost for a renewable energy owner to use the 'grid,' the Public Service Commissioners on May 2, 2019 rejected DTE's proposal and adopted the 7.44 cents distributed energy tariff.

The key issue in this rate case is whether solar owners are paying their fair share to maintain the ‘grid’ (the network of electrical wires that distribute electricity), or not.  DTE argues that solar owners are not paying their fair share, whereas solar advocates contend that DTE is not being honest about the true value of solar electricity they get from solar owners.  DTE takes this extra electricity they receive from solar owners and turn right around and sell it to other homeowners at full retail rate.  This means that DTE may not have to bring on the older, expensive and in many cases dirtier power plants when the demand for electricity is high in the summer months when people are running their air conditioners. This is when solar energy is most productive and most helpful to DTE and they continue to deny that this has much value.

The decision on May 2, 2019 by the Public Service Commission only applies to DTE customers.


Consumers Energy will have to go through their own ten month long process in front of the Public Service Commission of determining what the 'distributed energy tariff' should be for Consumers customers. This process will begin when Consumers files their next rate-case which we expect will be in early 2020.


The utilities should be careful because the law of 'unintended consequences' could take effect if they continue to disrespect individuals and business that want to exercise their right to generate their own electricity through a solar energy system. If the big monopoly utilities keep pushing to pay the least amount to solar owners for their extra electricity, solar owners could add battery storage to their solar system so rather than selling their extra electricity to the utility, they just store it in batteries and use it at night and cut out the utility all together! It is becoming more feasible for individuals and business to leave the grid as the cost of battery storage is coming down dramatically in price.

GLREA is working very hard to represent solar owners and the public in front of the Public Service Commission to oppose these bad proposals by utilities. We need your help and support for the upcoming Consumers case.

Please become a Member of GLREA if you are not already so we will have the resources to take on the utilities! Click on Become a Member this will take you to the Membership page on this website and you can sign up. 

Thanks for all your help.  If you have any questions please contact John Freeman at Jfreeman13@comcast.net.

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