News Story

Want to sell control of your water heater to Consumers Energy?

Monopoly power utility offers Michigan customers small-time money for shutoff privileges

Consumers Energy is offering incentives to customers who give the utility remote control of their water heaters. The energy company is offering a one-time $25 gift card and $38 in cash back annually to customers who allow it to install devices on their water heaters. The company could then shut off their hot water in the event it does not have enough energy to meet consumer demand.

“On a few high-demand days a year we will automatically switch off your water heater for a short time. You can still use hot water in the tank,” reads an explainer on the Consumers Energy website. It calls the remote control the “Electric Water Heater Program.”

“It’s obvious why the big monopoly utilities are offering customers cash cards and rebate programs like this,” said Jason Hayes, director of energy and environmental policy at the Mackinac Center. “They have to get you to sign up for these programs because they know the renewable energy that they are building can’t be trusted to keep the power on in the heat of the summer or the dead of winter.”

Consumers is working to get customers into demand response programs that enable the company to cut power in order to reduce use, Hayes said. This in turn may help Consumers avoid “having to impose larger blackouts or outages when reliably unreliable wind and solar inevitably fail.”

Consumers countered that its primary goal is to deliver safe, reliable, affordable energy.

“The rebates and incentives to reduce energy usage have existed in some iteration for years at Consumers Energy, regardless of the type of energy being utilized, as customer affordability has always been one of our top priorities,” a company representative wrote in an email to Michigan Capitol Confidential. “There are numerous programs available through Consumers to help customers manage their energy costs in a way that works best for them — we are one of the only consumer companies out there that actually wants customers to use less of their product! Doing so not only saves customers money on their bills; it is better for the environment and better for customers — reducing energy usage at peak times is more affordable than building new power plants or buying from the market.”

Consumers and DTE Energy, which hold regional power monopolies under state law, are moving away from reliable sources such as clean nuclear energy to wind and solar, which are not reliable. Consumers has asked for rate hikes in the past to implement its new energy plan. Attorney General Dana Nessel intervened after Consumers attempted a 14% rate hike in 2021, limiting the increase to 9%.

Hundreds of thousands of DTE customers experienced the future the demand response programs aim to prevent during the prolonged energy outage that followed February’s winter storm. Rolling blackouts are frequent events in California, which also mandates heavy use of renewable energy. 

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.