Sustainable Heating Franchise


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Project Up​dates 

Thank you to everyone that attended a public forum or submitted public comments. A high-level summary of public comments will be coming shortly. For now, those​ interested can see all of the Requests for Ideas submitted through our RFI for Safe Healthy Clean Reliable Heating_4.21.23.pdf.  ​

Submitted responses to the Request for Ideas: 

If you'd like to share your thoughts on the City's work to advance sustainable heating, please send an email to [email protected]


On March 20, 2023, Ann Arbor City Council passed a resolution directing the administrator to negotiate a new heating franchise with interested providers, to initiate a responsible, careful transition to renewable energy choices for heat in Ann Arbor.

The City of Ann Arbor's methane gas franchise with a subsidiary of DTE is set to expire in 2027; so the time is now to chart a future toward our A2ZERO goal of becoming carbon neutral by 2030 and heating our homes and businesses with safe, clean, healthy, and reliable energy.​

1. How does the fo​ssil gas franchise relate to the City of Ann Arbor's work to reduce carbon emissions and increase renewable energy for heating?

The Ann Arbor City Council passed​ a resolution on March 20, 2023 calling on the City Administrator to begin negotiations with DTE, and potentially other interested providers, to facilitate a careful transition of heating services to renewable, sustainable and cleaner sources of energy.

We are taking this action because Ann Arbor residents are demanding energy that is affordable, clean, reliable, safe and healthy, and we need our utility providers to be aligned with that future. 

A central part of our A2ZERO goal is becoming carbon neutral in a just and equitable way by 2030 and that means reducing our dependence on fossil fuels by reducing energy waste and implementing clean renewable energy choices to heat our homes and businesses, while ensuring Ann Arbor can serve as a model for communities across the country.

The City has already taken many steps to reduce greenhouse gases in our community, and this is just the next step. You can learn more about our existing work by checking out our sustainability website ( as well as our annual reports (

2. What is Ann Arbor's A2ZERO ​plan?

In 2019, Ann Arbor approved the A2ZERO Climate Action Plan to achieve carbon neutrality by 2030. Our A2ZERO plan aims to improve public health, reduce dangerous indoor pollution and greenhouse gas emissions, and address climate change by taking action in the following areas:

  • Power our electrical grid with 100% renewable energy
  • Switch our appliances and vehicles from gasoline, diesel, propane, coal, and fossil gas to electric
  • Significantly improve energy efficiency in our homes, businesses, schools, places of worship, recreational sites, and government facilities
  • Reduce the miles we travel in our vehicles by at least 50%
  • Change the way we use, reuse, and dispose of materials
  • ​Enhance the resilience of our people and our place
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3. Why is the City of​ Ann Arbor looking to negotiate its methane gas franchise now?

The City of Ann Arbor's current franchise agreement with DTE, which provides the bulk of Ann Arbor's methane gas, is set to expire in 2027. This provides our community with a unique opportunity to reduce indoor pollution, protect public health, grow jobs in the clean energy economy and secure sustainable heating for our community. Moreover, fossil or methane gas (often called "natural gas") produces more than 25 percent of Ann Arbor's polluting emissions.  Studies show pollution from fossil fuels such as coal and gas causes cancer, as well as heart, lung and serious respiratory diseases, including increased rates of childhood asthma.

We shouldn't have to sacrifice our health to heat our homes and businesses.

Transitioning to cleaner energy sources would significantly reduce dangerous indoor pollution, while improving the resilience, safety and affordability of our energy. 

Moreover, reducing our dependence on methane gas can also help fight climate change, not just by reducing carbon from what we burn, but potentially by reducing potent and dangerous methane emissions in the fossil gas supply chain. 

This is the next step in a multi-part process outlined in our A2ZERO Plan to ensure a smooth, responsible and managed transition that can serve as a model for a safe, healthy, and resilient energy future.

4. What is a franchis​​e?

Under Michigan law, a franchise is a contract between a local unit of government and a utility that: (i) governs the use of the public rights of way, and (ii) sets the conditions under which the company may, for a set period, provide the specified utility service.

Franchises can also include additional terms and several local governments across the country (e.g., Chicago, Salt Lake City, and San Diego) have successfully advanced affordability, equity, and clean energy goals via franchise negotiations while optimizing use of the public rights of way.

5.  What is ​​​the cost of a transition to clean, reliable, safe, and healthy heat?

We shouldn't be forced to pay for energy that negatively impacts our health and is hazardous to our communities. That's why the City of Ann Arbor is exploring options to safely, affordably, reliably, and cleanly heat our homes and businesses. The March 20th resolution empowered the City Administrator to investigate options and present viable pathways to City Council for consideration.

The cost of doing nothing will have far more damaging negative consequences, in adverse health effects, more devastating climate disasters, and continued reliance on imported fossil fuels.

Transitioning to cleaner energy sources will significantly reduce dangerous indoor pollution and greenhouse gas emissions, while improving the reliability, resilience, safety and affordability of our heating and cooling systems.

6. Will homeo​​wners and businesses see higher heating and cooling bills?

Solar, wind, networked geothermal, and other forms of renewable energy are now usually cheaper than fossil fuels such as coal, gas and oil, and are not subject to the supply shocks and price hikes that we see in fossil fuels. Additionally, clean renewable energy can help us reduce indoor pollutants, which are linked to adverse health effects, including cancer, heart diseases, and serious chronic respiratory conditions such as asthma and bronchitis.

Combined with energy efficiency measures and proven technology such as high-efficiency heat pumps and geothermal, as well as other measures outlined in our A2ZERO plan, we can make our homes, businesses, and other buildings safer, healthier and more affordable to heat and cool.

7. How will the transition to renewable energy in homes and buildings affect reliability, resilience and sa​​fety?

Methane gas in homes and buildings is linked to cancer, heart diseases, asthma and other respiratory conditions, so transitioning towards renewable and clean forms of energy can help make homes and buildings safer and healthier.

Proven technology such as high-efficiency heat pumps and geothermal can reduce energy use to cool and heat homes, providing relief for the energy grid, saving money and improving reliability and resilience. Moreover, appliances such as highly efficient electric heat pumps can use electricity from rooftop solar to heat water and store it for over 24 hours, so families will have hot water even if the grid is experiencing an outage. 

We also know that fossil fuel gas is a significant liability because methane gas systems can take 30 times longer to restore than the electric system after natural disasters, and have caused dangerous and deadly explosions in Michigan. 

8. Does t​echnology exist to provide heat from renewable energy and not fossil fuels like gas?

Yes. In fact, the City of Ann Arbor is already working with organizations, such as Michigan Saves, that help homeowners and building owners transition to renewable energy and heat.

Many Michigan companies are working with communities across the state to provide renewable sustainable energy and heat to make homes and businesses safe, healthy and cost-efficient. A list of some of these contractors can be found on the Michigan Saves website​ (look for those with the Electrification Badge).

Moreover, cities such as Chicago, Salt Lake City, San Diego and Frankfurt, Germany – to name just a few – are already moving forward progressive clean energy strategies, inclusive of the technologies we are exploring in Ann Arbor. 

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9. How can a h​omeowner or building owner transition to clean renewable heating and cooling?

While the City is looking at pathways to help most residents make this transition, individuals ready to transition now are encouraged to check out programs offered through the Ann Arbor Office of Sustainability and Innovations, including our residential and commercial solar programs ( and our soon to be launched energy incentive program.

Individuals interested in moving forward can also check out “Electrification Badged" contractors listed on the Michigan Saves website to get quotes for various types of services. These contractors can help you move forward with proven technologies such as high-efficiency heat pumps, solar and battery storage systems, or many other clean energy opportunities.

Lastly, we encourage interested individuals to check out the list of Tax Credits available for making the transition to cleaner, safer, and more affordable homes and businesses, such as those listed on the U.S. Department of Energy's website​

10.  Is A​​nn Arbor's electricity franchise with DTE different from the fossil gas agreement?

Yes. The City of Ann Arbor has a separate electric franchise with DTE Electric. This electric franchise is established by state law and has no termination date. Any heating franchise, on the other hand, must be periodically re-negotiated. 

The resolution that City Council passed on March 20, 2023 tasked the Administrator with addressing the fossil gas franchise the City has with DTE Gas, which is slated to expire in 2027.

11. When do you expect neg​otiations to begin?

Council voted on and passed​ this proposal on March 20, 2023. We expect negotiations to begin in the near term. 

12.  What can I do to help move Ann Arbor toward a reliable, resilient, safe and affordable energy​ future?

You can be a champion for our community's energy future by: