Michigan City Taps Budderfly and Schneider to Overhaul Energy Systems Without Taxpayer Money

A Michigan City’s Bet on Energy-as-a-Service

A small city in northern Michigan has chosen an unconventional route to modernise its energy systems — one that requires no upfront taxpayer dollars. Cadillac, with just over 10,000 residents, has signed a $4.4m deal with energy services firm Budderfly and automation giant Schneider Electric to equip seven critical public sites with microgrid capability, battery storage, solar generation, efficient lighting, HVAC upgrades and electric vehicle charging.

Budderfly will finance the entire project and retain ownership of the installed assets for the contract’s duration. Instead of an upfront payment, the city repays through the guaranteed energy savings the upgrades produce — a model known as Energy-as-a-Service (EaaS). Schneider Electric provides the digital backbone: software that gives Cadillac real-time oversight of how facilities consume and, eventually, generate power.

The decision is rooted in real-world pain. Michigan ranks among the worst US states for electricity outages, with 620 major events recorded between 2002 and 2022. This year alone, severe flooding swamped Cadillac’s wastewater infrastructure and forced a state of emergency. That incident made resilience non-negotiable for City Manager Marcus Peccia and his team, who say the project keeps water treatment, emergency response and other essential services running even when the wider grid fails.

Cadillac is one of the first communities to launch under Schneider Electric’s Accelerating Resilient Infrastructure Initiative, a programme designed to connect municipalities with private capital and technology through flexible financing. Other partners include Microsoft, Arcadis, Sunrock Distributed Generation and Zurich Resilience Solutions.

Why Cadillac’s Model Could Reshape Municipal Energy Funding

How the EaaS Model Unlocks Municipal Upgrades

The deal flips the traditional public-infrastructure playbook. Instead of issuing bonds or raising taxes for a capital project, Cadillac turns a future operating expense — its electricity bill — into the funding mechanism. Budderfly bears the performance risk: if the projected savings don’t materialise, the company’s return shrinks. This alignment creates a strong incentive for efficiency, and it explains why CEO Al Subbloie argues cities “shouldn’t have to choose between modernising critical infrastructure and managing limited budgets.”

Why Michigan’s Grid Problems Spur Action

Michigan’s outage rate is not principally about hurricanes or earthquakes; it’s about aging infrastructure, ice storms and high winds. To have over five hours of blackouts per year per average customer is a direct economic penalty for businesses and a safety hazard for public services. Cadillac’s response — microgrids that can island from the main grid — addresses the reliability gap at the point of consumption rather than waiting for utilities to harden transmission lines. The flood event in 2026 accelerated the timetable, but the underlying numbers were already stark.

Schneider Electric’s Broader Resilience Initiative

While Budderfly provides the financing and asset ownership, Schneider Electric contributes the software and integration heft that makes real-time energy management possible. Its Accelerating Resilient Infrastructure Initiative is a deliberate push to standardise this approach, bringing together a consortium of technology firms and risk-capital providers. For Schneider, the programme deepens its footprint in the public sector and creates a pipeline for its energy management software. For municipalities, it offers a pre-structured pathway that lowers the transaction costs of negotiating bespoke deals with individual vendors.

The model is not risk-free — contract terms, performance guarantees, and the long-term cost-of-capital implied by the savings-share need careful scrutiny. But Cadillac’s experience will be watched closely by other small and mid-sized cities facing the same fiscal vise: rising electricity costs, growing energy demand and deteriorating grid reliability.

For City Leaders: How to Evaluate an EaaS Partnership

• Map critical services first: Cadillac focused on water treatment and facilities that keep the city functioning during emergencies. City managers should identify which sites cause the greatest public harm when power fails and prioritise those in any EaaS scope.
• Demand guaranteed savings with clawback: Budderfly’s contract includes guaranteed savings. Municipalities need independent verification clauses and a mechanism to adjust payments if real savings fall short, ensuring the “repayment-from-savings” logic holds.
• Assess the partner’s balance-sheet strength: since the provider owns the assets, a city is effectively locked into a long-term service agreement. Scrutinise the EaaS company’s financial backing and track record — a bankruptcy could strand assets or interrupt critical services.
• Integrate real-time monitoring: Schneider’s software gives Cadillac transparency. Any EaaS deal should mandate a similar level of data access so the city can monitor performance, not just rely on the provider’s reports.