Ann Arbor OKs heating franchise with DTE, includes climate action commitments and geothermal pilots

The Ann Arbor City Council approved an ordinance replacing the city’s gas franchise with a new heating franchise and adopted a companion agreement outlining climate action cooperation with DTE Energy.

Supporters described the package as a step toward decarbonizing building heating and enabling new utility models. “For the first time, we are opening a door to a future beyond gas,” Council Member Iyer said during discussion, calling the agreement “about climate action, energy choice, and setting the stage for a new kind of utility partnership.”

Under the agreement, DTE and the city committed to cooperate on an initial two‑year work plan that includes funding for community geothermal installations, energy‑efficiency improvements in rental units, workforce development and a feasibility study for a biodigester at the city’s wastewater recovery facility. Council members said the agreement also creates a pathway for DTE to bid on city‑led geothermal district projects and to learn how district geothermal could operate locally.

Council members emphasized the agreement does not immediately remove gas service for customers. “The plan is not to rip something away,” Council Member Barrack said, describing the City’s intent to provide new, cleaner heating options while guiding any future changes through planning and public engagement.

Supporters said the approach could create a new business line for the incumbent utility while giving the city an instrument to test alternatives at scale. Opponents raised no formal motion to defeat the ordinance; the council voted to approve the franchise and climate agreement on a voice vote.

Ending: City staff will begin negotiating implementation details and pursue pilot projects; councilmembers said they expect additional reporting back as pilots and procurement proceed.