Michigan PSC prioritizes utility intentions for $550B in Infrastructure Investment and Jobs Act funds

Since it was signed into law in November 2021, the Infrastructure Investment and Jobs Act (IIJA) has offered $550 billion for infrastructure improvements – and the Michigan Public Service Commission (MPSC) has officially urged electric and natural gas utilities to take advantage of the offer.

In May, the commission directed Michigan’s regulated utilities to file comments demonstrating how they are or could benefit from grants, loan programs, funds, and assistance from the IIJA. Funding offered by the bill could be used for electric generation, grid reliability, clean energy transmission and deployment, electric vehicle infrastructure, energy efficiency, and cybersecurity, among others.

This week, the MPSC summarized the response to this directive. In particular, there were some notable areas of overlap and potential collaboration, including rural grid flexibility, reliability, resilience, and accessibility; renewable energy and storage investment and deployment; transportation electrification, electric vehicle (EV) and EV infrastructure funding; electric transmission investments; Smart Grid investment matching and Smart Grid flexibility; energy efficiency; along with physical and cybersecurity.

This applies to many companies operating in-state, including Michigan’s two biggest utilities – Consumers Energy Co. and DTE Gas Co. – and others such as Alpena Power Co., Detroit Thermal LLC; DTE Gas Co.; Indiana Michigan Power Co.; Northern States Power Co.; Upper Michigan Energy Resources Corp.; Upper Peninsula Power Co.; Michigan Gas Utilities Corp. and SEMCO Energy Gas Corp.

The MPSC noted that in addition to the IIJA funds, rate-regulated utilities could also benefit from the nearly $370 billion for energy security and climate change authorized through the recently enacted Inflation Reduction Act. In both cases, the commission sees such federal funding opportunities as ways to help the state meet decarbonization, electrification, and overall greener goals set out by Gov. Gretchen Whitmer’s MI Healthy Climate Plan. Particularly, the MPSC is interested in opportunities to maximize the benefits of the transition to clean, distributed energy resources, as well as those pertaining to improving outage prevention and advancing equity and environmental justice concerns.

Now, utilities have been asked to update progress on funding or assistance opportunities twice yearly until further notice. They may also file requests for approval of pilot programs and similar concerns relevant to the IIJA.

At the same time, the MPSC this week began developing program guidelines and implementing an application process for $25 million in low-carbon energy infrastructure enhancement and development grants, with an RFP set for launch this September. The commission also eliminated a mechanism by which rate-regulated utilities could defer uncollectible debt over the amount used to set then-current rates – a policy put in place in April 2020 in response to the COVID-19 pandemic.