Illustrative Case: Michigan Class C Grower Funds LED Retrofit Through DTE and Consumers Rebates

The facility and starting situation

Assume a Class C adult-use grower in Oakland County on DTE Electric full service in MISO Local Resource Zone 7 [dte-rate-book]. Class C licenses allow up to 2,000 plants; industry trackers citing CRA data reported 800 active Class C grower licenses statewide as of July 2026 [growgoyle-mi-q3-2026]. This facility runs 1,600 plants in a 45,000-square-foot building with 18,000 square feet of flowering canopy under double-ended HPS.

At energization the account took DTE Rate D4 Large General Service on secondary voltage. Distribution demand is $27.10 per kW of monthly billing demand, plus a $9.18 per kW capacity demand charge and $7.48 per kW non-capacity demand charge on full service [dte-rate-book]. Summer peak demand hit 520 kW with every flower room on the same photoperiod. Michigan averages 6,745 heating degree days and 579 cooling degree days, so winter heat rejection from lighting dominates HVAC load [noaa-cag-michigan].

The operator entered DTE's electric choice queue at service application. The MPSC reported the choice program fully subscribed in 2025 with 5,517 customers on choice and 5,101 waiting [mpsc-choice-2025-report]. Consumers Energy's September 2026 cap tracker showed only 42,004 MWh of allotments open against 5.3 million MWh of queued load [consumers-electric-choice]. Supplier shopping was a long-term option, not a near-term bill fix.

What the baseline bills showed

The table mixes cited DTE tariff rates with assumed usage. Only the rates are facts; kWh, kW, and totals are inputs.

Line item	Assumption or rate	Monthly (winter)	Monthly (summer)	Notes
Flower HPS	380 kW on 12 h/day	138,700 kWh	138,700 kWh	Assumed load
Veg and mother	55 kW on 18 h/day	30,100 kWh	30,100 kWh	Assumed load
HVAC and dehumid	140 kW winter / 165 kW summer avg	100,800 kWh	118,800 kWh	Assumed load
Measured peak demand	520 kW / 490 kW	520 kW	490 kW	D4 billing demand
Distribution demand (D4)	$27.10 per kW [dte-rate-book]	$14,092	$13,279	Delivery
Capacity demand (D4)	$9.18 per kW [dte-rate-book]	$4,774	$4,498	Full service
Non-capacity demand (D4)	$7.48 per kW [dte-rate-book]	$3,890	$3,665	Full service
Energy + riders	Assume 7.1 cents per kWh	~$19,200	~$20,400	Modeled supply
Approximate total		~$56,000	~$58,000	Excludes taxes

Annualized demand charges on D4 alone were about $300,000: twelve months averaging $25,000 in per-kW lines. At the EIA June 2026 Michigan commercial average of 16.63 cents per kWh on roughly 3.4 million kWh, all-in spend would land near $565,000 [eia-epm-5-6-a]. The operator had capital for expansion but not for a primary-voltage transformer until rebates changed the math.

What changed

Three projects ran from February through July 2026.

Room-by-room LED retrofit with DTE reservations. The operator reserved DTE measure AG-30/31 LED grow lights before purchase [dte-ee-catalog-2026]. Fixtures had to meet at least 2.10 micromoles per joule photosynthetic photon efficacy. With 6,500 operating hours per year in flower, the project qualified for Tier 2 rebates in the catalog [dte-ee-catalog-2026]. AG-35 HVAC-reduction rebates applied where documented watt reduction lowered grow-room cooling load; the catalog states year-round indoor cannabis grow rooms are eligible [dte-ee-catalog-2026]. Custom rebates cap at 75 percent of implementation cost [dte-ee-catalog-2026].

Staggered photoperiods. Four flower rooms moved to two start times, cutting coincident lighting step from 380 kW to 310 kW in the model. See peak demand vs. peak usage for why interval shape matters on DTE's on-peak billing-demand ratchet [dte-rate-book].

Primary-voltage feasibility study. After LED and stagger work, peak demand modeled at 395 kW. An engineer priced a pad-mounted transformer for Rate D11 Primary Supply, which bills distribution at $7.15 per kW at primary voltage under 24 kV versus $27.10 on D4 secondary [dte-rate-book]. D11 requires a 50 kW minimum contract capacity [dte-rate-book]. The operator deferred transformer purchase until rebate cash landed.

A sister facility on Consumers Energy in Grand Rapids ran the parallel AG211 agricultural LED measure with pre-notification [consumers-ee-business]. That site is outside this bill model but shared procurement specs.

The math after

Assume LED and stagger cut peak demand from 520 kW to 395 kW on D4 through the first year, then D11 primary service in year two after transformer install.

Line item	Before (month, D4)	After year 1 (D4)	After year 2 (D11)	Notes
Peak demand	520 kW	395 kW	395 kW	Modeled
Distribution demand $/kW	$27.10	$27.10	$7.15	[dte-rate-book]
Distribution demand charge	$14,092	$10,705	$2,824
Capacity + non-capacity demand	$8,664	$6,579	Modeled similar	D11 differs on choice
Annual kWh	3.4M	2.85M	2.85M	LED savings
DTE rebates (one-time)	$0	~$210,000		Assumed reservation
Modeled annual all-in	~$672,000	~$520,000	~$455,000

Simple payback on $680,000 LED capital minus $210,000 rebates: year-one savings of roughly $152,000 imply about 3.1 years on energy alone, before D11 primary savings in year two. Transformer capital of $180,000 in the model adds payback time but cuts monthly demand by another ~$7,500 on the distribution line alone [dte-rate-book].

At the EIA Michigan industrial average of 9.24 cents per kWh, the same kWh would look cheaper on paper [eia-epm-5-6-a], but DTE still bills demand on D4 until rate class changes [dte-rate-book].

What did not work

Buying LEDs before DTE reservation. The first 200 fixtures purchased without pre-approval were ineligible for AG-30/31 rebates [dte-ee-catalog-2026]. The operator reordered after reservation numbers issued.

Waiting for choice to open. Queue position did not move in 18 months [mpsc-choice-2025-report]. Supply quotes at 6.4 cents per kWh could not beat tariff plus demand work while still on full service.

Night-only photoperiod for demand shaving. DTE bills monthly billing demand on the highest interval in the month, not a time-of-use split on D4 [dte-rate-book]. Staffing cost ended the experiment after one cycle.

Undersized dehumidification after LED. Lower sensible heat raised relative humidity. Two rooms needed AG-listed dehumidifier upgrades in the custom track [dte-ee-catalog-2026].

Michigan choice cap and efficiency timing

Michigan caps competitive supply at ten percent of utility load with a waiting queue [mi-mpsc-choice-2025]. Efficiency rebates through DTE or Consumers programs proceed independently of choice enrollment. Sequence rebate pre-approval before fixture purchase even if supply stays on default while queued.

DTE and Consumers efficiency programs parallel to choice queue

Michigan choice cap limits supplier options but not utility efficiency rebates. DTE and Consumers business programs may fund horticultural LED measures under prescriptive rules while the account waits in the choice queue [mi-mpsc-choice-2025]. Pre-approval before purchase remains mandatory.

Queue status check quarterly

MPSC publishes choice program status reports [mi-mpsc-choice-2025]. If queue position does not move, default supply remains the supply-side baseline while rebates still reduce kWh. Do not delay LED projects waiting for cap space unless supplier savings exceed rebate plus kWh savings combined.

Default supply while queued: still shop efficiency

Choice queue does not block DTE or Consumers rebate applications. LED savings accrue on default supply rates until supplier enrollment clears [mi-mpsc-choice-2025].

Choice queue and supplier RFP timing

Run supplier RFP when cap space opens or when MPSC reports attrition, not only at initial energization. LED retrofit savings accrue on default supply while waiting [mi-mpsc-choice-2025]. Document queue position in board materials so supply savings are not assumed in year-one pro forma.

Efficiency first while queued for choice

DTE and Consumers efficiency programs accept applications while accounts wait in the Michigan choice queue [mi-mpsc-choice-2025]. LED savings reduce kWh on default supply immediately; supplier savings wait on cap space.

DTE versus Consumers rebate portals

Michigan utilities run separate business efficiency portals. Fixture pre-approval must match the serving utility territory even when the operator holds licenses statewide [mi-mpsc-choice-2025].

Queue check before supplier LOI

Verify MPSC queue status before signing supplier letter of intent; cap space may not open before LOI expiration [mi-mpsc-choice-2025].

Queue check before supplier LOI

Verify MPSC queue status before signing supplier letter of intent; cap space may not open before LOI expiration [mi-mpsc-choice-2025].

Lessons that transfer to other Michigan cultivators

Reserve DTE AG-30/31 or Consumers AG211 before you buy fixtures [dte-ee-catalog-2026] [consumers-ee-business]. Treat choice as a queue: optimize tariff and load on full service first [mpsc-choice-2025-report]. Compare D4 secondary to D11 primary when peak demand exceeds a few hundred kW [dte-rate-book]. Stagger flower rooms before capital upgrades; scheduling is free. Read the Michigan cultivation energy page and the FAQ on lowering grow bills.