DTE Electric and Consumers Energy will soon need to provide more detailed information to the public about how they plan to improve electric service reliability.
The Michigan Public Service Commission, which regulates investor-owned utilities, found the utilities’ distribution plans insufficient and ordered them to implement various actions to increase transparency around distribution and maintenance plans.
The order comes on the heels of an August power outage that stretched for thousands of metro Detroit customers for up to a week and caused multiple fatalities from contact with down wires.
The move is part of MPSC’s multi-year MI Power Grid initiative, which aims to shore up the state’s electricity grid as Michigan transitions to distributed clean energy, faces climate change-induced severe weather and sees increased demand brought on by electric vehicles. The order requires utilities to provide more data about their plans for tree trimming and track outages based on geography, among other items.
MPSC Chair Dan Scripps told Planet Detroit that while the order was not prompted directly by the August outages, it was timely.
“The weather that we saw in late August and the consequences, the number of outages, the fact that for tens of thousands of folks, they lasted nearly a week, and fatalities reported from down wire contact from both Consumers and DTE — unfortunately, it’s a highly relevant context and timing in terms of when we issued the order,” Scripps said. “I think the general sense is that the current reliability just isn’t adequate.”
Among the order’s measures, DTE must provide more information about how its tree-trimming program will help improve its reliability. In 2019, DTE agreed to spend $90 million on its distribution system for tree trimming. MPSC allowed DTE to securitize its tree-trimming costs to reach a seven-year trim cycle, according to Scripps.
Michigan law allows utilities to replace existing debt and equity with lower-cost debt in the form of securitization bonds with lower interest rates than the existing debt and equity. Securitization bonds are units of corporate debt that are issued by a utility to investors.
And in 2021, DTE agreed to spend some of the additional profits it gained from increased residential consumption during the COVID pandemic on tree trimming, according to Scripps. DTE ran a profit of $907 million in 2021.
In its rate increase request now before the MPSC, DTE is requesting accounting changes to allow it to treat tree trimming as a capital expense instead of an operating expense — thereby allowing it to grow its rate base and increase its profits.
“The performance isn’t good. We have too many outages. They last far too long,” Scripps said. “And the real frustration from both the commissioners and the public around safety concerns is these are not the first storm-related fatalities that we’ve seen, and we still have a system that poses real risks with wires down.”
In a statement to Planet Detroit, DTE said that fallen trees are responsible for nearly 70% of the time its customers spend without power and that it invested $90 million in 2021 to increase tree trimming across the service territory,
“Customers on these circuits have seen a 72% reduction in tree-related outages,” the statement read. “In combination with tree trimming, we have made significant investments in the last twelve months on some of our worst-performing circuits, upgrading aging infrastructure to improve reliability. Over 500 circuits across 88 communities have completed targeted reliability work since the fall of 2021.”
Tree trimming is an essential component of improving reliability, Scripps said. But despite these increased investments, Michigan and DTE continue to have among the worst reliability records in the country.
“I don’t want to say that nothing’s happening. But we had our first major storm, and it’s difficult based on what we saw to say that we passed the test,” Scripps said. “And so this is focused on getting better metrics around what we expect the grid to be able to handle, tying how proposed investments connect back to the improved performance. And what does that mean for customers to improve safety and reliability?”
The recent MPSC order also includes a requirement for more transparency in how utilities disclose outage and performance data from an equity lens.
Last month, independent consultant Jackson Koeppel and We The People Research Director Alex B. Hill co-authored a policy brief outlining what they call “utility redlining” — arguing that DTE’s hardening schedule and its modernization plan “favors wealthier areas of Detroit as opposed to lower-income areas.”
The MPSC order requires DTE Electric and Consumers Energy to release “accessible and usable reliability data compatible with the MiEJscreen: Environmental Justice Screening Tool” to allow stakeholders to evaluate reliability impacts as they relate to equity. MiEJScreen is one of several new tools that identify geographic areas where residents face environmental injustice.
“There are, unfortunately, areas where broader systemic issues get reflected in the quality of service. And I don’t think that’s a surprise to anybody, but [MPSC is] trying to actually get more detailed data that tracks against some of those things,” Scripps told Planet Detroit. Under the order, MPSC requests outage data based on zip codes, census tract-level data, and individual utility circuits.
“I think having it be reported in those formats helps the broader public and us dive in and say, ‘We’ve got particular challenges in these neighborhoods, these communities that, unfortunately, also track with broader systemic challenges,’” Scripps said. “Hopefully, that gives us more ammunition and more data that helps prioritize future investments.”
In its statement, DTE said it plans to comply with the order, anticipating its reliability data will be provided by both zip code and census tract by the first quarter of 2023.
“We are using the state’s MiEJ Screening tool … to better understand where our most impacted customers reside,” the statement read. “We will look at those customers from a lens of their reliability and will review our reliability programs and projects to ensure we are considering equity as part of our grid modernization work/priorities.”
We The People’s Hill, who authored the redlining brief, remains skeptical that simply requiring more data will make a material difference.
“Open data is always the best data, but data for the sake of data is meaningless. It’s all too easy to make reports, analyses, and lists of the ills that DTE has caused to people across Michigan, but we need to see the utilities be required to act on equity analyses,” he said. “We need to see them held to account for disinvestment in BIPOC communities and exorbitant spending on shareholder payouts, executive salaries, and using money for influence when DTE delivers one of the most substandard utility services in our country.”