Organization: DTE Energy Co.

Year: 2015

Description: Whereas:
In May 2014, Barclays downgraded bonds for the entire U.S. electric utility sector due to risk of rapidly improving solar power and energy storage technologies.   
 
An August 2014 report by UBS highlights that solar systems and batteries will be disruptive technologies for utilities due to steeply declining costs and estimates that, by 2020, the unsubsidized payback time will be as low as 6-8 years for homeowners making a combined investment in an electric vehicle and a solar power system with battery storage.  
 
In a recent analysis, Deutsche Bank predicts solar PV will reach grid parity in 47 U.S. states as soon as 2016, assuming today’s 30 percent solar investment tax credit (ITC) is extended.
 
94% of international industry representatives surveyed by PricewaterhouseCoopers predict that the power utility business model will be either completely transformed or significantly changed between today and 2030.
 
A November 2014 Moody's report indicated that “a proactive regulatory response to distributed generation is credit positive as it gives utilities improved rate designs and helps in the long-term planning for their infrastructure.”
 
Navigant Research indicated that: "Utilities that proactively engage with their customers to accommodate distributed generation - and even participate in the market themselves - limit their risk and stand to benefit the most."
 
Utilities already capitalizing on providing distributed solar generation to customers include:  Duke Energy and NRG Energy.  Many other utilities work with third-party solar system providers to reduce electric bills for customers while also reducing greenhouse gas emissions.
 
The U.S. EPA recently released its proposed Clean Power Plan that would require states to achieve 30% greenhouse gas (GHG) reductions on average nationwide, listing renewable energy as a key pillar of the plan.
 
The IPCC estimates that a 50% reduction in GHG emissions globally is needed by 2050 (from 1990 levels) to stabilize global temperatures, entailing a U.S. target reduction of 80%.
 
In a recently released report ranking 32 of the largest investor-owned utilities in the U.S., DTE Energy ranked 16^th on renewable energy sales as a percentage of 2012 electricity sales, and 17^th on cumulative annual energy savings as a percentage of total retail sales due to investments in energy efficiency.
 
Resolved:  With board oversight, assess how DTE Energy is adapting (or could adapt) its business model to enable increased deployment of distributed low-carbon electricity generation resources as a means to reduce societal greenhouse gas emissions and protect shareholder value, and report to shareholders (at reasonable cost and omitting proprietary information) by September 1st, 2015.