Michigan Senators Propose Legalizing Virtual Power Plants

Bills would create framework for aggregating distributed energy resources to help manage grid demand

Published on Feb. 26, 2026

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Two Michigan state senators have introduced bills that would establish a legal framework for virtual power plants, which are networks of distributed energy resources like solar panels and smart thermostats that can be aggregated to help manage grid demand. The senators argue these virtual power plants could provide reliability and cost benefits, but the Michigan Chamber of Commerce has raised concerns about the potential disruption to utilities' grid management role.

Why it matters

As energy costs and reliability remain top concerns for Michigan residents, virtual power plants could offer a way to better manage grid demand and potentially lower energy bills. However, the proposal faces opposition from the state's business lobby, which is concerned about the impact on utilities.

The details

Senators Sue Shink (D-Northfield Township) and Jeff Irwin (D-Ann Arbor) introduced Senate Bills 731 and 732, which would prompt energy regulators to create a program allowing virtual power plant aggregators and owners of connected energy resources to be compensated for the benefits they provide to the grid. This could include networks of solar panels or smart thermostats that can discharge energy during times of high demand. The senators argue this could help reduce strain on grid infrastructure and provide cost savings, but the Michigan Chamber of Commerce has raised concerns about the potential disruption to utilities' core functions.

  • In December 2025, Senators Shink and Irwin introduced Senate Bills 731 and 732.
  • The Senate Energy and Environment committee held a hearing on the bills in February 2026, but did not hold a vote.

The players

Sue Shink

Democratic state senator representing Northfield Township.

Jeff Irwin

Democratic state senator representing Ann Arbor.

Michigan Chamber of Commerce

The state's largest business advocacy organization, which has opposed the virtual power plant bills.

DTE Energy

One of Michigan's two major utility companies, which has been a regular donor to the Michigan Chamber of Commerce.

Consumers Energy

The other major utility in Michigan, which submitted a card opposing the virtual power plant bills.

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What they’re saying

“A lot of folks are installing batteries in our homes now and those batteries can be filled when energy demand is low, and then discharge and energy demand is high, that can do a lot to bring down our bills. And these customers who participate in this can also get paid themselves as a part of voluntarily agreeing to allow their thermostat or their own battery to be deployed in this way.”

— Jeff Irwin, State Senator (Michigan Advance)

“The proposed legislation further adds uncertainty to Michigan's energy regulatory landscape by creating new mandates that undermines utilities' essential role in providing grid management. Inserting third parties in this core utility function, these bills could create significant disruption where utilities are forced to bear additional risk for uncertain benefits.”

— Mike Alaimo, Senior Director of Legislative and External Affairs, Michigan Chamber of Commerce (Michigan Advance)

What’s next

The Senate Energy and Environment committee did not hold a vote on whether to refer the virtual power plant bills to the full Senate floor after the February 2026 hearing.

The takeaway

The debate over virtual power plants in Michigan highlights the tension between enabling new distributed energy technologies and maintaining the traditional utility-centric model of grid management. As energy costs and reliability remain top concerns, finding the right balance will be crucial for policymakers.