Back-to-back rate hikes illustrate DTE Energy’s entrenched power in Michigan

DTE Energy headquarters (by JK Nair, via Wikimedia Commons)

After Michigan community activists convinced regulators to reduce a $388 million electric rate hike request by the private utility corporation DTE Energy down to a $30.5 million in 2022, the company initiated another rate hike proceeding almost immediately, eventually winning an additional $368 million rate hike that – combined with the smaller hike approved in 2022 – totaled more money than the corporation had initially asked for. 

The back-to-back rate hikes underscore the amount of power and influence that DTE Energy has amassed over Michigan’s government, which has allowed the corporation to extract record profits from its captive customer base even as it fails to provide reliable electric service, especially in poor cities like Detroit. In fact, shortly after being awarded its 2023 rate hike of $368 million, DTE offered buyouts to nearly 30% of its workforce, allowing the corporation to extract even more profits while employing fewer workers for DTE to deliver reliable energy.

DTE’s back-to-back rate hikes will extract more than $398 million

In January 2022, DTE requested a $388 million hike in electric rates from the Michigan Public Service Commission, the state’s utilities regulator. The rate hike was opposed by community organizations like We the People Michigan, the Michigan Environmental Justice Coalition, and Soulardarity, which had been organizing for years for an clean, affordable, and democratically-controlled energy system. Community members mobilized to demand that the Michigan Public Service Commission hold a public hearing on DTE’s rate hike – a historic first for the regulatory body. Organizers mobilized more than two hundred people to attend the hearing and speak out against the rate hike. 

Before the hearing We the People Michigan, Michigan Environmental Justice Coalition, and LittleSis published the report “The Public’s Case Against DTE Energy”, a report detailing how DTE’s profiteering has come at the expense of the public’s health, Michigan’s environment, and the economic security of the people who depend on DTE for energy. The report also spotlighted DTE’s elaborate political influence apparatus, comprising millions of dollars in donations to a majority of state legislators, millions of dollars in lobbying expenditures, and a network of dark money groups coordinating millions more in political spending – including political ads and donations to nonprofit groups tied to Michigan politicians. 

On November 18, 2022, the MPSC issued its ruling on the rate case rejecting DTE’s request for $388 million in new funding from its customers and instead approving a much smaller $30.5 million rate hike.

The victory, however, was short-lived. In March 2023, just three and a half months after the MPSC granted DTE a $30.5 million rate hike, the company came back to the regulator asking for another rate hike for $622 million, nearly twice what the corporation sought in its January 2022 filing. This request moved through the regulatory process faster than the previous rate case, and notably the MPSC did not convene a public hearing this time, despite the much larger rate hike requested by the corporation. On December 1, 2023, the MPSC announced its decision approving a $368 million rate hike on DTE customers, less than what DTE requested in its March rate case filing, but nearly as much as what DTE had originally asked for in the rate case that had been decided in November 2022.

Added to the $30.5 million hike that had been granted in that previous case, DTE was ultimately awarded $398.5 million in rate hikes from November 2022 through December 2023.

This blitz of back-to-back rate hikes is a testament to the force of DTE Energy’s political influence, and a stark example of the wide dynamic of utility industry capture of the governmental agencies that regulate it.

DTEs multi-million dollar political machine

As mentioned above, Michigan groups along with LittleSis published a report in August 2022 that investigated how DTE exerts influence over Michigan politics and government, allowing the corporation to continue to extract hundreds of millions of dollars in profits from the communities that rely on it for power and heating and cooking fuel, while continuing to pollute the environment and stymie efforts to transition away from fossil fuels. This political influence operation includes donating millions of dollars to favored politicians through a political action committee (PAC) and individual campaign donations, a dark money machine that has channeled millions of dollars into electoral and public relations campaigns in support of DTE and its anti-renewable energy positions, hundreds of thousands of dollars spent on lobbying to influence politicians once they take office, and a greenwashing campaign to give the corporation an environmentally-conscious public image.

Political donations

In our 2022 report, we found that DTE Energy employees, board members, and the corporation’s PAC had contributed $2.4 million to Michigan political candidates and committees from 2019 through 2022. Though donations mostly favored Republicans, like many corporations that rely on close relationships to government, DTE gave to politicians from both major political parties, including Democratic Governor Gretchen Whitmer. In fact, DTE’s political giving is so pervasive that in 2021 the Detroit News reported that DTE and Consumers Energy (another major Michigan utility corporation) had donated to 140 out of 146 members of Michigan’s legislature. Prior to hearings investigating widespread power outages in 2021, DTE donated more than $23,000 to 11 out of 16 members of the Michigan House Energy Committee, according to another Detroit News report.

The top five recipients of campaign donations from DTE Energy board members, employees, and corporate PAC from 2019 through 2022 included:

  • Senate Republican Campaign Committee: $130,000
  • House Republican Campaign Committee: $124,475
  • Gretchen Whitmer: $108,910
  • Michigan Senate Democratic Fund: $99,515
  • Michigan House Democratic Fund: $83,500

Dark money

In addition to direct political donations to Michigan politicians and political committees, DTE Energy also operates a dark money machine to influence elections and policy debates. These dark money expenditures dwarf DTE’s spending on direct political contributions – a DTE dark money group gave over $5 million to more than a dozen different groups in 2020 alone. Further, these expenditures are designed to hide DTE Energy’s hand behind innocuously-named front groups like Michigan Energy First. These grants included donations to organizations seeking to influence specific policies as well as organizations supporting candidates and groups with connections to powerful Michigan politicians.

Some key recipients of DTE Energy money channeled through Michigan Energy First include:

  • Detroiters for Change, a dark money group supporting political candidates backed by Detroit Mayor Mike Duggan, which received $750,000 from 2018 through 2020
  • Michigan Citizens for Fiscal Responsibility, which bankrolled efforts to limit the Michigan Governor’s power to extend a state of emergency, which received $600,000 from 2016 through 2020.
  • The Peninsula Fund, a non-profit controlled by staffers of now-former House Speaker Lee Chatfield, which received $125,000 from 2019 through 2020.

DTE’s dark money group also spends money directly to influence policy. For example, the Energy & Policy Institute reported in 2021 that a front called Alliance for Michigan Power – an assumed name of Michigan Energy First – was running misleading ads against proposed legislation to encourage distributed solar power generation.

Lobbying

The third arm of DTE’s political influence apparatus is lobbying. On top of the millions of dollars in expenditures to influence the electoral process and astroturf support for its policy priorities, the corporation also spends hundreds of thousands of dollars per year on lobbying elected officials to influence their decision-making.

We found in our 2022 report that DTE reported more than $894,000 in lobbying expenses from 2019 through 2021.

Greenwashing

Beyond the millions of dollars the corporation spends to influence electoral outcomes and the voting decisions of elected officials, DTE also invests in a greenwashing campaign designed to paint the corporation with a climate-conscious brand image, even as it spends furiously to keep Michigan dependent on dirty energy.

We found that, through its philanthropic arm the DTE Energy Foundation, the corporation had given at least $1.2 million to Michigan environmental organizations. While seemingly at odds with DTE’s role as a fossil fuel polluter, these donations are a form of soft power that can buy DTE good will in the eyes of the public and the philanthropic community as well as giving the corporation political cover to offset its more nefarious activities.

This campaign – and the depth of DTE’s influence – is also evident in DTE executives’ presence on the boards of prominent non-profit organizations across the state. As we reported in 2022, the presence of DTE executives on these boards gives DTE even more influence, legitimacy, and reach, as this notorious corporate actor is presented as an active member of various community spaces. DTE’s board memberships include roles at a variety of institutions, including the United Way of Southeast Michigan, the YMCA of Metropolitan Detroit, and the Nature Conservancy Michigan. These relationships and others can be seen in the map below, from our 2022 report with We the People Michigan.

DTE Executives’ roles on philanthropic and nonprofit boards, from our 2022 report “The People’s Case Against DTE Energy”

Additionally, DTE sponsors climate conferences, touts decorative solar projects in local newspapers, and emails its customers about energy efficiency opportunities all in service of burnishing the corporation’s public image.

Conclusion

Thanks to the billions of dollars DTE and other utility corporations extract from the communities they serve, they are able to invest millions to ensure the allegiance of elected officials who make policy decisions about how energy is controlled and who appoint the regulators that oversee the utility industry. 

What’s more, the corporate capture of the governmental bodies that oversee private utilities extends even further than the complex influence machine described above. In a 2023 investigation, the Detroit Free Press detailed a pervasive revolving door between the utility industry and the Michigan Public Service Commission through which 79% of commissioners whose service ended after 1990 “went on to work in jobs related to energy, electricity, and/or how such fields are regulated” and cozy relationships where utility corporations and their lobbying groups underwrite travel, accommodations, and hotel stays for utility regulators at regulatory conferences.

Utility corporation spending on deep political influence and close relationship with government regulators ultimately enables the corporation to spin off hundreds of millions of dollars in profit for shareholders. 

As illustrated by DTE’s back-to-back rate hikes, this deeply entrenched power enables these corporations to come out on top, even when dealt setbacks by effective community opposition. Despite this power imbalance, movements in Michigan and around the United States continue to organize and fight for clean, affordable, and reliable energy under community ownership and control.