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Distributed Generation Program Implementation

The energy laws passed in 2016 include a new distributed generation program to replace Michigan’s existing net metering program and directs the Commission to conduct a distributed generation study and develop an equitable cost of service based distributed generation tariff for the program.  The law specifies that these activities must be completed by April 20, 2018. 

Under the law, the distributed generation program is for customers who install certain on-site grid-connected, renewable generation.  Qualifying renewable generation projects must be no larger than 150 kW; however, methane digester generation projects as large as 550 kW may also participate. The project may generate up to 100% of a customer’s annual electricity consumption.

In July 2017, after a comment period, the Commission issued an order establishing the distributed generation program and finding that the current net metering program should continue as the interim distributed generation program until the new distributed generation program tariffs are approved in rate cases filed after June 1, 2018.  The order also clarified that customers who enter the distributed generation program prior to the new distributed generation tariff effective date may continue to net meter for 10 years from the date of their enrollment.

On behalf of the Commission, the Staff convened the Distributed Generation Workgroup to primarily focus on cost of service considerations and develop the new distributed generation tariff.  The Workgroup met 7 times.  During the Workgroup process, Staff requested input on how to calculate cost of service for distributed generation customers and comments on its proposed distributed generation tariff and Report on the MPSC Staff Study to Develop a Cost of Service-Based Distributed Generation Program Tariff

The Report recommends a tariff mechanism called “Inflow/Outflow.” Inflow represents the kWh delivered by the utility to the customer and Outflow represent the kWh generated by the customer’s distributed generation project and that is not used behind the meter and is exported to the distribution grid.  Under the proposed Inflow/Outflow tariff, distributed generation customers pay for all Inflow electricity delivered by the utility according to their regular cost of service-based retail rate schedule.  Outflow kwh receive a credit. 

On February 22, 2018, the Commission issued an order finding the report to be comprehensive however, the Commission requested comments on several key issues relating to the tariff development, approval and implementation process. Please see the order for information about the process for filing comments.

In its April 18, 2018 order in Case No. U-18383, the Commission adopted a tariff based upon the inflow/outflow billing mechanism that regulated electric utilities are expected to submit in any rate case filed after June 1, 2018. A utility may file its own distributed generation tariff, if desired.

DTE Electric is the first utility to file a rate case which includes a proposed distributed generation (DG) program tariff.  The proposed tariff is called Rider 18 Distributed Generation Program.  As directed by the Commission in its April 18, 2018 order in MPSC Case No. U-18383, the rate case filing also included the DG tariff proposed by Staff in its Report on the MPSC Staff Study to Develop a Cost of Service-Based Distributed Generation Program Tariff.  Upper Peninsula Power Company (UPPCO) has also filed a rate case with a proposed DG program tariff.  The proposed tariffs will be reviewed as part of the rate case proceedings.  Parties who have intervened will have an opportunity to file testimony about the tariff and may also file their own proposed tariff.  Information about how to comment on a rate case without intervening on our Get Involved page .  For general information about rate cases, please see the Commission’s Rate Case Issue Brief.

Rate cases are required, by law, to conclude within 10 months of the filing date.  DTE Electric’s rate case (MPSC Case No. U- 20162) was filed on July 6, 2018 with an order due in early May 2019 and UPPCO’s rate case (MPSC Case No. U-20276) was filed on September 21, 2018 with an order due in late July 2019. 

The distributed generation program is available to customers of Alpena Power, Consumers Energy, DTE Electric, Indiana Michigan Power, Northern States Power, Upper Peninsula Power Company, Upper Michigan Energy Resources Company and alternative electric suppliers.


Staff Leads

Julie Baldwin


  • Held seven stakeholder workgroup meetings
  • Two orders issued
  • One round of informal comment and reply comment
  • Staff issued a draft DG Tariff report to the DG stakeholder workgroup
  • Final Staff DG Tariff filed in U-18383 docket on February 21, 2018

Additional Steps

  • Commission issued order establishing DG tariff  April 18, 2018
  • Utilities include tariff with rate cases filed after June 1, 2018
  • DG tariff goes into effect when the tariff receives Commission approval in a utility’s rate case filed after June 1, 2018

Task Reports

DG Proposal Tariff Comments

Concept Tariff

Comments of Chart House Energy

Comments of Institute for Energy Innovation

Comments of Michigan EIBC

Comments of Great Lakes Renewable Energy Association

Comments of Alain Godeau

Comments of David LaRoy
   Summary of Comments
   Presentation to DG Workgroup
   LaRoy Guidebook
   LaRoy Potential Rate Impacts
   LaRoy Value of Solar
   LaRoy PV Valuation
   LaRoy Designing Tariffs
   LaRoy Solar PV Benefit and Cost
   LaRoy Rooftop Solar
   LaRoy Solar and Grid Stability
   LaRoy Solar in MI
   LaRoy Valuing Solar DG in MI

Comments of Danny McGee

Comments of Soulardarity

Comments of the Environmental Law and Policy Center and Vote Solar

Joint Utility Comments

Task Data

DTE Residential Net Metering Inflow 8760

DTE Residential D1 8760

Task Events

December 19, 2017

Agenda | Draft Report | Godeau Presentation

November 7, 2017

Agenda | Godeau Presentation | LaRoy Presentation | Soulardarity Presentation

October 18, 2017

Agenda | Concept Tariff | Staff Presentation | Charthouse Presentation | Charthouse Study | EEI Presentation | Evaluating Net Metering

August 15, 2017

Agenda | 5 Lakes Energy | Staff Presentation | ELPC Presentation

June 28, 2017

Agenda | Staff's Summary of Comments | CE Presentation

May 10, 2017

Agenda | Microgrid Solutions | Consumers Energy COSS U-17990

April 19, 2017

AgendaMPSC Staff Inflow Outflow MechanismEnphase Presentation

March 22, 2017

Agenda | Staff Overview | Staff COSS | Background Rate Info


Task Related Documents

U-18383 April 18, 2018 Order

U-18383 July 12, 2017 Order

U-18383 Request for Comments Order

U-18383 DG Docket

IEEE 1547a Work Group Document