In Case U‑20757, the Michigan Public Service Commission (MPSC) recently approved a new statewide affordability framework to lower energy costs for low-income households. In a June 11 order, the Commission set a target to limit household energy bills to no more than 6% of income and directed stakeholders to redesign assistance programs to align with that goal.
This action is important because up until this point, Michigan was lagging other states in the robustness of programs to help low-income utility customers. The MPSC’s new order has the potential to set Michigan on the path to catching up to other states, but much will depend on exactly what follow-up actions the MPSC takes.
An April 2026 article from MLive noted that neighboring states like Ohio have “stronger affordability programs” compared to Michigan that limit utility bills to a percentage of income. Known as “Percentage of Income Payment Plans” or PIPPs,” these types of programs often limit utility bills to no more than 6% of household income.
In our report from 2025, Power Struggle: Energy Insecurity in Michigan’s Low-Income Communities, CUB recommended that the MPSC “require utilities to offer [PIPPs] using a 6% percentage-of-income target for combination customers and 4% for gas- or electric-only customers.” CUB also advocated for a timely implementation of Michigan PIPP programs through comments to the MPSC under the U-20757 docket.
The MPSC’s new order does not explicitly require PIPPs, but it does direct utilities to create “affordable payment plans” that would have elements of PIPPs and have the explicit goal of reducing household energy burden to no more than 6% of income.
Next, the MPSC staff will create a workgroup in which the utilities will participate. Among the goals of this workgroup is to develop a plan for transitioning customers away from the current Residential Income Assistance (RIA) Credit and Low-Income Assistance (LIA) Credit to an affordable payment plan. The LIA provides a monthly bill credit for low-income households with incomes at or below 60% of the state median income, while the RIA provides a monthly bill credit (typically limited to the monthly customer charge, usually less than $10) for low-income customers at or below 150% of the federal poverty line.
A limitation of the existing LIA and RIA programs is that they just provide flat credits, and don’t take a customer’s energy burden into account. As we stated in our Power Struggle report, for example, “a $50 LIA credit may reduce energy burden for a household at 150% of the federal poverty line, bringing their net energy costs below the 6% high energy burden mark discussed earlier. But a household at less than 50% of the federal poverty line would likely still pay more than 10% of household income toward utility bills, placing them in the category of a ‘severe’ energy burden and slipping inexorably closer to crisis.”
Moving instead toward an affordable payment plan that takes into account the 6% target is a potentially powerful step toward fixing this flaw in the existing programs.
But we don’t really know exactly what these plans will look like yet. “The Commission Staff shall file an implementation plan and draft Affordable Payment Plan tariff framework in this docket no later than January 31, 2027, consistent with Commission directives in this order,” the order stated.
While much more work needs to be done, this decision represents a significant shift in how Michigan approaches energy affordability. Instead of relying primarily on fragmented assistance programs, the Commission established a clear benchmark for what customers should reasonably be expected to pay, creating a more consistent and outcome-focused approach to affordability.