OPINION: Energy assistance programs don’t keep t...

OPINION: Energy assistance programs don’t keep the lights on. Energy affordability will.

calculator on a piece of graph paper

When Michigan’s utility shutoff protections expired June 12th, over 225,000 families in DTE Energy’s service territory became vulnerable to losing their lights, the contents of their refrigerators, and the ability to charge their cell phones because of past-due bills.

The Michigan Public Service Commission (MPSC), who ordered utilities to establish temporary shutoff protections, have insisted struggling customers should “be proactive, seek help.” However, the state funds and federal tax dollars that subsidize DTE’s bloated prices through programs like the Michigan Energy Assistance Program (MEAP) are not enough to meet families’ needs. 

Bridget Vial

Case in point — The Heat and Warmth Fund (THAW) and the United Way recently hosted a webinar on how to access energy assistance funds. While listening, I typed up a long list of assistance programs, each with their own eligibility requirements and phone numbers, and posted it on Facebook. Comments started appearing: “They said the program is out of funds.”

Let’s put the funding into perspective:

  • The CARES federal stimulus package sent an additional $35.1 million in assistance funds to Michigan’s many utilities.
  • DTE’s customers alone are on the hook for months of past-due bills worth $220 million.
  • On the backs of struggling customers and fast-rising rates, DTE’s investors receive annual payouts worth $650 million.

Mass shutoffs aren’t just a pandemic problem, however. According to data from the Michigan Public Service Commission, DTE has performed roughly 200,000 shutoffs per year to enforce bill collection since 2014 – while raising residential rates by more than $775 million and performing little more than emergency upgrades on failing infrastructure.

This is a picture of an energy affordability crisis. Addressing the crisis requires making a few acknowledgements:

  • Energy bills are unaffordable to low-income families
  • State funds and federal assistance dollars aren’t enough to meet the need
  • Regularly shutting off families’ power for their inability to afford fast-rising bills is both unconscionable and ineffective at addressing the core problem

How can we make energy truly affordable, and make the system economically viable?  Charge low-income families based on their ability to pay. When customers are charged an affordable percentage of their income, they tend to stay current on bills –– and utilities actually collect more money. Percentage-of-income payment plans like those in Ohio, New Jersey, and other states can serve as models for administration. 

Michigan’s own direct payment pilot program, through which MDHHS is issuing direct utility payments on behalf of some 19,000 customers with past-due bills, could serve as a funding model; although discreet and insufficiently funded, this unnamed program requires the utilities benefitting to contribute 25% of program costs. 

Compared to the bureaucratic patchwork of energy assistance programs, percentage-of-income payment plans could streamline our approach to addressing egregious income inequality and decades of racist housing policies that leave many low-income customers, particularly in Black communities and communities of color, in older, less-efficient homes with higher utility bills and extractive rent and mortgage payments.

Capping the amount that utilities can collect from low-income customers could have benefits for everyone. It would require our elected officials, who distribute energy assistance dollars, to reckon more seriously with a utility profit model that incentivizes large capital investment projects instead of more cost-effective and resilient solutions like energy efficiency upgrades and distributed, renewable power generation. 

With hundreds of thousands of families facing pending shutoffs, and DTE gearing up to recover pandemic losses for their shareholders — now is a critical moment. We must end shutoffs, and insist that the MPSC and our elected officials establish income-based payment systems that affirm the necessity of energy in our daily lives and our collective stake in long-term, justice-based energy solutions.

Want to take action? Support the Work for Me DTE! Campaign’s calls for a shutoff moratorium and income-based energy bills, and sign up to get in touch.
Bridget Vial, Energy Democracy Organizer with the Michigan Environmental Justice Coalition