By James Windell
A new Michigan law went into effect this year which requires the City of South Haven to decide whether to be part of the Michigan Energy Assistance Program (MEAP).
At a Special Meeting of the Board of Public Utilities on Tuesday, March 4, 2025, the Board had to decide what they would recommend to the South Haven City Council.
The Michigan Public Service Commission (MPSC) administers MEAP in partnership with the Michigan Department of Health and Human Services by approving grants to nonprofit organ-izations that provide direct assistance to qualifying customers.
“The MEAP program has been around a long time,” Dana Burd, Director of Public Works for South Haven said after the meeting. “But starting in October there will be expanded eligibility for customers seeking assistance with electric and home heating bills. There will still be an assistance program regardless of whether the City opts in or out.”
What is new, Burd went on to say, is that the City’s Electrical Utility must now partici-pate in the State program or develop our own program that meets the State’s criteria. “As a result, electrical customers will have to pay a set amount per month on their electric bills starting in Oc-tober,” he explained.
The purpose of the MEAP is to establish and administer programs statewide that provide energy assistance and self-sufficiency services to eligible low-income households. Selfsufficiency services include assisting participants with paying their energy bills on time; budgeting for and contributing to their ability to provide for energy expenses, which may include enrollment in an affordable payment plan; and utilizing energy services to optimize energy efficiency. MEAP works with households to provide supplemental bill payment assistance and self-sufficiency services to low-income residents statewide.
By opting into the state program, a surcharge would be added to customers’ bills that would go into a statewide fund to support energy assistance statewide. “The Michigan Public Service Commission has proposed this rate at $1.25 per meter per month,” Burd said.
This results in less local control of funds collected from customers and allows the state to determine the surcharge rate. However, the advantages of opting-in would mean there would be no new administrative burdens on South Haven’s Department of Public Works’ staff and it would allow time to gather data and evaluate how the state program is benefiting customers.
If the city opted out of MEAP, the city would have to create and administer its own en-ergy assistance program and fund that program (likely by adding a surcharge to customer’s bills). This would retain local control of funds collected but would also create a significant increase in new administrative responsibility for staff having to create and run a program while adding additional annual reporting requirements.
Legislation approved by the Michigan State Legislature and signed by Governor Gretch-en Whitmer in 2024 raised the income eligibility threshold for Michigan households to be eligible to receive MEAP support and the amount that may be raised for it. With higher income eligibility, MEAP could provide energy assistance to as many as 335,000 households. MEAP has assisted an average of around 50,000 households per year in recent years.
MEAP is funded through the state’s Low-Income Energy Assistance Fund (LIEAF), through a permeter charge assessed on retail electric billing meters. Before this year, the maximum that could be assessed per customer was $1 per month, with a cap on total funding raised through the assessment set at $50 million. The legislation signed by Gov. Whitmer raises the permeter assessment to $2 over time. The revamped MEAP also eliminates the total cap on how much annual funding the meter charge can raise.
Eligible household income guidelines were expanded under the new law. Previously, a family of four was eligible if it made up to 150% of the federal poverty guideline, or $46,800. Now, that same family is eligible if it makes 60% of the median state income, or $61,861, beginning Oct. 1, 2025.
After extensive discussion, the Board of Public Utilities voted to recommend to the South Haven City Council to opt in for this coming year.
“It would be a lot for us to create our own program from scratch,” Burd said. “So, opting out is more complex.”
Burd told the Board that in the future they can consider whether it is better for South Haven area residents if the city opts out and creates its own energy assistance program.
