Officials in Ann Arbor, Michigan, are working with local legislators on a bill that would give cities greater control over where their electricity comes from.
Ann Arbor leaders have expressed frustration with investor-owned utility DTE Energy for years over reliability issues and the pace of its clean energy transition, as well as a dispute over the value of generation from the city’s hydroelectric dams. Some local leaders have floated the idea of a municipal utility to take over DTE’s operations in the city, but a report last year downplayed that option as too risky and expensive.
Instead, the city’s sustainability team endorsed a different concept: community choice aggregation.
Community choice aggregation allows cities to purchase electricity on behalf of local residents and businesses, but it leaves the existing utility in place to continue managing billing, distribution, and other functions. Unlike municipalization, it doesn’t require cities to buy and take over a utility’s infrastructure.
Ann Arbor was among a wave of communities across the nation that in recent years have explored how to establish publicly owned utilities as an alternative to the investor-owned model. Municipalities that take over local transmission lines, distribution lines and other infrastructure are required by law to fairly compensate the utility, which can cost hundreds of millions of dollars.
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