Across the country, cities are starting to grapple with the fact that even the most ambitious goals around climate policy and infrastructure can stall out when the utilities controlling our energy systems move too slowly or prioritize shareholder returns over the public good. A new model emerging from Ann Arbor offers a different path that does not require cities to wait, beg, or take over existing utilities, but allows them to build something new alongside what already exists.

Ann Arbor is launching what it calls a Sustainable Energy Utility, or SEU, which operates in parallel with the private utility that already serves the city. For residents who choose to opt in, the city installs and owns clean energy infrastructure like rooftop solar, battery storage, and potentially neighborhood scale microgrids. Customers remain connected to the traditional grid but draw from these local systems first, paying the city for that service while still maintaining the existing utility. The result is a layered system that begins to shift control over energy generation and distribution back to the public, without requiring an immediate break from the private utility model.

The goal is to accelerate the transition to clean energy while lowering costs and increasing reliability, especially for low income households who are often the most burdened by utility bills. At the same time, it creates a way for cities to directly invest in the infrastructure they need, rather than relying entirely on investor owned utilities to determine the pace and direction of decarbonization. Full public takeovers of private utilities are politically difficult, legally complex, and financially risky, while doing nothing leaves cities dependent on companies that may not be aligned with local climate goals. The SEU model offers a way to act now and build toward a different system over time.

That idea has clear implications for Los Angeles, where the energy landscape is already split between public and private systems in ways that both create opportunity and expose gaps. Electricity is provided by the Los Angeles Department of Water and Power, the largest publicly owned utility in the country, while gas service is controlled by Southern California Gas Company, a private utility that continues to invest in fossil fuel infrastructure even as the city sets aggressive climate targets. This hybrid system means Los Angeles already has a degree of public control that many cities lack. But it also means that key parts of the energy system remain outside of local democratic oversight.

At first glance, LA might not seem to be a good candidate for Ann Arbor’s model because of its publicly owned electric utility, but that assumption misses something important about how the system actually functions on the ground. Having public power is not the same as having a modern, decentralized, and equitable energy system that reaches every neighborhood. LADWP still operates largely through centralized generation and distribution, and while programs for rooftop solar, battery storage, and building electrification exist, they are often fragmented, underfunded, or difficult for renters and low income households to access. At the same time, SoCalGas continues to lock in long term dependence on methane gas, creating both climate risks and financial liabilities for Angelenos.

The city has already taken some steps in the direction Ann Arbor is pursuing, but they remain incremental and disconnected. Through LADWP and state programs, residents can access incentives for rooftop solar and battery storage, including equity focused funding that helps lower income households install backup power systems. The city also offers rebates for electrification, from heat pumps to efficient appliances, and supports new construction standards that move buildings away from fossil fuels. Universities and local institutions are actively developing microgrid and distributed energy technologies, and pilot projects across the region have begun to test how these systems can improve reliability and reduce emissions.

All of this reflects real progress, but it is still a limited patchwork of programs that rely on individual uptake, require residents to navigate complicated applications, and often leave out renters and those without upfront resources. The city is encouraging change, but not yet building the system itself. An SEU style approach in Los Angeles could begin to connect those pieces into something more coherent by creating a city run program that allows residents to opt into a publicly financed clean energy system layered on top of existing infrastructure. The city could install solar panels and battery storage on homes, apartment buildings, schools, and community centers, retaining ownership of the equipment and charging a monthly fee that replaces or reduces traditional utility costs. Microgrids could be developed to keep neighborhoods powered during outages, which is becoming increasingly important in a region facing wildfires, extreme heat, and growing strain on aging infrastructure. By focusing on distributed energy systems, the city could improve reliability while also reducing overall demand on the grid.

Just as important is who such a system would serve. Renters, seniors on fixed incomes, and families in high energy burden neighborhoods could be prioritized, ensuring that the benefits of clean energy are not limited to homeowners with the capital to invest upfront. In a city where inequality shapes access to everything from housing to transportation, energy policy is no exception, and any serious climate strategy has to address that reality.

This approach would also provide a pathway to reduce reliance on SoCalGas without requiring an immediate and politically fraught effort to take over or dismantle the utility. By electrifying buildings, installing local generation, and building out distributed energy systems, the city could gradually make gas less necessary in everyday life. Over time, that parallel system could shrink the role of fossil fuels through steady public investment that shifts how energy is produced and consumed at the neighborhood level.

Ann Arbor’s model is showing that cities do not have to accept the pace or priorities of existing utilities, and they do not have to choose between doing nothing and taking on a major fight for public ownership. Los Angeles has begun to move in this direction through a series of smaller programs and incentives, but the next step is to bring those efforts together into a system that is intentional, coordinated, and built at scale.