Michigan Utilities Help Customers Save Energy and Money

All across Michigan, electric and natural gas utility customers are reaping the benefits of energy efficiency. As a result of Michigan’s 2008 Renewable Energy Act, utility companies statewide have been offering efficiency programs to their customers since November 2009.

According to a new report, these energy efficiency programs have exceeded expectations, and will result in lifetime savings of $404 million to utility customers. Michigan’s success demonstrates the potential of energy efficiency utility programs backed by state legislation.

Legislation Capitalizes on Efficiency

Michigan’s Renewable Energy Act, PA 295, requires utilities to aid consumers in reducing power use. According to supporters, this legislation will lessen the need for new electric generation statewide, which will save the state money in plant construction costs.

In response to this legislation, all 66 utilities throughout the state have implemented programs to incentivize energy efficiency. Residentially, these programs address lighting technology, heating and ventilation, weatherization, and energy education. On the commercial side, programs provide rebates for replacing antiquated equipment with efficient upgrades.

Savings Exceed Targets

A new analysis from the Michigan Public Service Commission (MPSC) finds that the program is working even better than expected. Utility spending on energy optimization programs has increased from $89 million in 2009 to $137 million in 2010. Additionally, the program savings for 2009 achieved 137 percent of the target savings. These savings translate into lower energy bills for Michiganders.

In addition to utility energy optimization programs, PA 295 also requires MPSC to establish revenue decoupling mechanisms for any utility that requests them and institutes energy optimization programs. These revenue decoupling mechanisms help utilities recover costs associated with lost revenue from a decline in energy use.