Dive Brief:

• DTE Energy will add almost $40 million to its energy efficiency budget for income-qualified customers in 2022 and 2023 and has committed to addressing high energy burdens in Detroit, particularly in African American neighborhoods, under a settlement approved Jan. 20 by the Michigan Public Service Commission.
• The median energy burden of Black households in Detroit —  the percentage of a household’s income spent on energy bills — is 54% higher than non-Hispanic white households, according to the Sierra Club and other consumer advocacy groups who pushed for DTE to make a greater commitment to energy equity.
• The settlement includes the development of a geographic targeting initiative beginning 2023 to concentrate efficiency upgrades in historically underserved neighborhoods, said Elena Saxonhouse, managing attorney of Sierra Club's Environmental Law Program. "We're hoping that it becomes a model so that you're really prioritizing the areas where there's the greatest need and the greatest vulnerability," she said.

Dive Insight:

Generations of discriminatory housing and lending practices have left some Detroit neighborhoods with energy inefficient homes and extremely high energy burdens, say advocates. The settlement with DTE calls for a new approach, tackling upgrades in underserved neighborhoods rather than on a house-by-house basis.

"You can get a higher participation rate, if people are talking about having these kinds of services done with their neighbors," Saxonhouse said. "They can gain a little more trust."

Under the settlement, according to Sierra Club, DTE will increase its budget for income-qualified gas efficiency programs by $3 million in 2022 and $5 million in 2023, and for income-qualified electric programs by $750,000 in 2022 and $1.75 million in 2023. The budget is set every two years and the settlement is $10.5 million above what DTE originally filed for 2022-2023.

DTE's gas and electric efficiency budgets for income-qualified customers in 2022-2023 will total $99.1 million, Saxonhouse said, compared with $60.8 million in the 2020-2021 budget.

The additional funds will be redirected from lower priority programs for market-rate customers, according to Sierra Club, and will not impact bills.

Under the settlement, up to $1 million of the income-qualified budget will be dedicated to developing DTE's new neighborhood approach. Areas of focus will be determined through a set of research studies, after which DTE will implement the geographic targeting initiative beginning in 2023.

DTE also agreed to work with Sierra Club and other stakeholders during the development of both the research metrics and the implementation plan for the initiative. The utility did not respond to requests for comment.

The settlement, which also included several other conservation groups, "is an example of putting equity principles into practice on the ground," said Saxonhouse. "I think that utilities are looking for examples."

"There is a lot of talk about equity, and I think there's less action," she added. "So hopefully, we'll see more action. This could be one example."

Other pieces of the settlement call for DTE to implement new metrics that will help advocates understand the equity of the utility's efficiency investments by census tract. DTE will also pair a new bill-assistance pilot with an energy efficiency offering involving a home energy assessment. And the utility will train home assessors to identify mold, asbestos, lead and wiring issues, along with the need for energy efficiency upgrades.

In older homes, it is not uncommon for energy efficiency upgrades to be deferred because of health and safety issues. A growing number of efficiency programs, however, include funds to address health and safety measures along with energy issues.

"We have already seen tremendous success with investments in health and safety interventions," Alexis Blizman, Ecology Center’s legislative and policy director, said in a statement. "The continuation and expansion of this program puts it on track to be incorporated as a permanent part of utility programs.”

Earthjustice, Natural Resources Defense Council and the National Housing Trust, were also interveners in the case.

"DTE customers deserve to live in safe, healthy, and energy efficient homes,” Chinyere Osuala, senior attorney in the clean energy program at Earthjustice, said in a statement. "This settlement is a major step toward ensuring that all of their customers, especially underserved communities and Black and Brown Communities, can have access to that opportunity.”