Ann Arbor City Council voted unanimously Monday to begin negotiations with DTE Energy (NYSE: DTE) immediately on a new gas franchise agreement aligned with the city’s A2ZERO plan to reach carbon neutrality by 2030.
DTE’s 30-year franchise agreement, which allows the utility to use the city’s rights of way and provide gas service to its residents, expires in 2027 but can be revoked by the city before then.
The resolution authorizing the renegotiation process (R-23-101) directs city staff to “ensure that any new or amended proposed franchise is aligned, to the fullest extent possible, with the city’s A2ZERO goals and best practices regarding uses of the city’s rights of way, without compromising the ability of community members to heat or cook in their homes and businesses.”
It notes that local governments, including Chicago, Salt Lake City and San Diego, have “successfully advanced affordability, equity, and clean energy goals” in their franchise negotiations.
City Sustainability Director Missy Stults has said the city is also watching efforts in Massachusetts to replace gas service with district-level geothermal systems to provide heating and cooling.
Ann Arbor Mayor Christopher Taylor said negotiating a new agreement made sense, and is, “consistent with the wishes of Ann Arbor voters who overwhelmingly passed a proposal in November to provide more clean energy choices and reduce dangerous pollution. Using clean, renewable energy to heat our homes and businesses will improve public health, reduce dangerous pollution that causes asthma, cancer and lung diseases, and save lives.”
City officials also said they will hold public listening sessions to get feedback from city residents as officials move forward with the negotiations. No dates for those public meetings have been set.
DTE spokesman Chris Lamphear said the utility “looks forward to having productive discussions with Ann Arbor leaders as we plot a course toward a cleaner energy future, which is a goal we both share. We are pleased to see the city continuing to collect feedback from its residents and businesses on the best paths forward, and we believe we can explore a range of possibilities that ensure the Ann Arbor community continues to have the safe and affordable energy it needs for decades to come.”
Lamphear said the company is working to reduce carbon dioxide and methane emissions in natural gas by 80% by 2040. With its renewable energy sources and local participation in the company’s MiGreen program, Lamphear said DTE has helped Ann Arbor reach 30% of its overall carbon reduction goal.
Ann Arbor has taken the most aggressive actions to reach carbon neutrality in Michigan. It has considered a local ordinance prohibiting new buildings from using natural gas but not acted on the proposal.
The city finds itself in a bit of a conundrum because it also is looking to develop new housing and has given initial approval for plans for a major housing development that would use natural gas for heating, drawing opposition from some city residents opposed to continued gas use.
DTE has said it would oppose a city ban on using natural gas in new construction, and Republicans in the Michigan legislature have introduced a bill barring local governments from preventing the use of natural gas.