Rising energy costs are putting pressure on household budgets in Michigan

Bills keep climbing for many Michigan homes

High utility bills can change a family’s whole budget in just one month. For some Michigan households, keeping the lights on and staying comfortable has become harder than ever. Even families trying to save energy every day say their monthly costs keep rising.

Now, state leaders are working on a new plan that could bring relief to some customers, but not everyone is expected to benefit from it. Many people are now watching closely to see if the changes will make energy bills more manageable for struggling households.

One family’s monthly struggle

Karen Johnson Moore and her husband, Columbus Moore, know how quickly utility costs can add up. The retired Detroit couple said their combined gas and electric bill climbed above $500 in February.

They carefully unplug appliances, switch off lights, and avoid wasting electricity, yet the savings have not been enough to lower their monthly bills.

Years ago, they even invested in solar panels, hoping to cut costs. According to the couple, the panels never worked as expected, leaving them with few options as energy expenses continued rising.

Everyday choices to save money

Like many families, the Moores have changed daily habits to stretch every dollar. During hot weather, they avoid running the air conditioner too much and try to keep the temperature below 80 degrees while staying comfortable.

They remember a time when even the highest electric bills were usually below $200. Karen Johnson Moore says paying around $175 instead of today’s higher bills would make a meaningful difference. Lower monthly costs would help free up money for other household needs.

A new affordability goal

Earlier this month, Michigan regulators approved an affordability goal aimed at helping lower-income households. The plan would limit combined gas and electric costs to no more than 6% of a qualifying household’s income.

Officials believe this could reduce financial pressure for families struggling to pay monthly utility bills. The program is still being designed, and regulators have not announced when it will begin. Many important details, including who qualifies, are still under review.

Help does not reach everyone

Michigan already offers several assistance programs to help residents avoid utility shutoffs. However, advocates say these programs often run out of funding and provide only temporary help instead of long-term solutions. Families may qualify for one year but still face high bills after assistance ends.

Many community leaders believe a permanent affordability program could provide more predictable support. They argue that stable monthly bills would make budgeting easier for households facing rising living costs.

A mother shares her experience

Detroit homeowner Joi Deshotel said she repeatedly tried to apply for emergency utility assistance but could not get through by phone. After finally reaching a representative, she learned that available funding had already been exhausted, leaving her without immediate financial help.

She later enrolled in DTE Energy’s payment plan to avoid service shutoffs. Even with that option, she owed about $1,700 by May, showing how quickly unpaid utility balances can grow.

Little-known fact: In 2024, about 90% of U.S. households reported using LED bulbs for at least some indoor lighting.

Payment plans still feel costly

Payment plans are designed to spread overdue balances over time, but some customers say the monthly amounts remain difficult to afford. State Representative Tonya Myers Phillips says many residents still struggle even after enrolling because their required payments remain higher than expected.

Phillips believes Michigan should focus on solving the affordability problem instead of relying mainly on emergency assistance. She says long-lasting solutions could help reduce utility shutoffs across the state.

Shutoffs remain a concern

According to state lawmakers, DTE reported more than 213,000 residential electric disconnections for nonpayment last year. Those numbers have raised concerns about how many families continue to face financial hardship despite existing assistance programs.

At the same time, the Michigan Public Service Commission approved a $242.4 million electric rate increase for DTE customers earlier this year. Higher rates can make it even harder for households already struggling with monthly expenses.

Pilot program showed promise

Michigan regulators based the new affordability goal on results from a DTE pilot program involving more than 2,000 customers. Participants paid no more than 6% of their income on one utility, or 10% for electricity and gas combined.

DTE reported that customers in the pilot experienced fewer service disconnections and made payments more consistently. Company officials said the discounted bills provided meaningful financial relief for participating households.

Measuring affordability is difficult

State officials say it is challenging to determine exactly how many customers spend more than 6% of their income on energy. Utilities generally do not collect detailed household income information, making statewide estimates difficult.

National research shows the issue extends beyond Michigan. The U.S. Energy Information Administration found that 33% of American households experienced energy insecurity in 2024, up from 27% in 2020, highlighting growing financial pressure nationwide.

Other states offer examples

Several states have already tested or adopted programs that tie utility costs to household income. Ohio, New York, and Minnesota have explored ways to automatically enroll eligible customers or cap bills at affordable levels.

Michigan regulators are studying similar ideas while creating their own program. Looking at results from other states may help shape a system that balances customer needs with long-term program funding.

Little-known fact: Ohio, New York, and Minnesota have all explored income-based utility affordability programs in different forms.

Some families may still miss out

Michigan expanded eligibility for its Energy Assistance Program last year to include households earning up to 60% of the state’s median income. If the future affordability program follows those same rules, some families like Joi Deshotel’s could receive significantly lower monthly bills.

Others, including the Moores, may still earn too much to qualify despite facing high utility costs. That possibility has left some residents uncertain about future relief.

Explore why the cancellation of a grant in Georgia and Alabama is raising concerns about higher household utility costs and the impact on residents.

Waiting for the next step

The Michigan Public Service Commission has directed staff to file an implementation plan for the affordability program by Jan. 31, 2027, but no launch date has been announced. Utility companies, regulators, lawmakers, and community groups will continue working through the remaining details before any statewide program begins.

For families watching every dollar, the hope is simple. They want utility bills that fit their budgets without forcing difficult choices between paying for energy and covering other everyday essentials.

Take a closer look at New York’s proposed $268 billion budget and how the planned second home tax could affect property owners.

Do you think utility bills should be capped based on household income? Share your thoughts in the comments.

This slideshow was made with AI assistance and human editing.

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