City Council Opts-in to Michigan Low-Income Energy Assistance Fund

Michigan’s recently passed law requiring cities to either establish a low-income energy assistance fund or opt-in to the currently existing state fund set a deadline for the decision as April 1. At Chelsea City Council’s March 17 meeting, the council voted to opt-in to the state fund.

Concerns were raised by council members about the utility increase being put in a state fund instead of a localized city fund, not guaranteeing that funds collected in Chelsea would be kept in the city. However, according to City Manager Marty Colburn, the state is “making an effort” to keep funds collected from cities in the same county it comes from.

The new law also changed the threshold for those that can apply for the energy assistance fund to include all households making less than the 60% of the average median Michigan income, which at the time of reporting is $61,861 per year. This makes the threshold $37,116.60.

“We also recognize that that may enlarge the base relying on that particular fund,” Colburn said. “Another reason to maybe fall back on the state versus doing it alone.”

Colburn recommended opting into the fund at least temporarily, so the city has more time to analyze the costs and benefits of allowing the state to handle the fund compared to a city-run bureaucratic institution.

The current state fund requires an increase of $1.25 per meter per month across residential, commercial and industrial properties. For residences with more than one meter, the increase will be a maximum of $1.25 per property.

Because the decision was required to be made by the beginning of April, Colburn believed it would be more beneficial to allow the state to handle the program it already has a history of running and return to the decision at a later date for the city of Chelsea to decide if it would be more beneficial to create a local fund instead.

For now, since the fund will be state-run, residents who wish to apply must do so through the state instead of the city.

A public hearing regarding this adopted resolution will be held at the council’s April 21 meeting.

In accordance with state law this new program will be initiated by October 1.