Michigan Commission Establishes Energy Affordability Goal for Low-Income Households

The Michigan Public Service Commission on June 11 established a statewide energy affordability goal that aims to reduce the energy burden of low-income households to no more than 6 percent of annual income, creating a new framework for utility assistance programs and customer bill support. The target allocates up to 4 percent of household income for electricity costs and 2 percent for natural gas expenses, consistent with national affordability benchmarks.

The decision follows five years of analysis by commission staff and stakeholder groups examining ways to improve access to energy assistance and strengthen household energy security. Regulators determined that income-based affordable payment plans can provide more consistent support for customers struggling to pay utility bills while simplifying access to available assistance programs.

The commission cited results from pilot programs operated by DTE Energy Company and Consumers Energy Company, which showed that customers were more likely to make on-time payments when their energy costs were reduced closer to the 6 percent affordability threshold. Regulators concluded that broader adoption of affordable payment plans could help reduce arrearages and lessen the need for households to choose between utility bills and other essential expenses.

The action builds on recommendations outlined in a September 2025 energy affordability report developed through the Energy Affordability and Accessibility Collaborative. The report recommended replacing existing utility assistance credits with affordable payment plans supported through the Michigan Energy Assistance Program. The commission directed staff to work with utilities, assistance agencies, and other stakeholders on implementation plans and program design changes by Jan. 31, 2027.

The policy shift comes as Michigan expands funding and eligibility for energy assistance programs following legislation enacted in 2024. State officials estimate the enhanced Michigan Energy Assistance Program could eventually serve up to 150,000 households, compared with roughly 50,000 households historically. The affordability initiative also complements broader commission efforts to manage customer costs while supporting grid modernization, reliability improvements, and expanded energy efficiency programs targeted toward households with the highest energy burdens.