As power outages plague Michigan, League of Conservation Voters calls for investigation, rate freeze
This has been a tough year for power outages in Michigan. On Thursday, high winds knocked out power for well over 170,000 utility customers. That's less than a week after about a quarter of a million customers lost their electricity when strong winds blew across the Lower Peninsula. Storms in mid-August affected more than a million customers.
The Michigan League of Conservation Voters believes the state’s two biggest utility companies, Consumers Energy and DTE Energy, need to be held accountable. The group has called for a statewide investigation into the companies and their handling of outages.
Michigan Radio's Morning Edition spoke to the league's deputy director Bob Allison about the group's demands and concerns.
"A question that many Michiganders are asking right now is, why are we paying the highest rates in the Midwest? [That's been] proven now by a new report released this week from federally compiled data. And where is all the money going? It's clearly not going towards reliability and performance," Allison said. "The Legislature is supposed to be regulating DTE and Consumers. We have not yet seen that kind of accountability."
Allison acknowledged that the Michigan Public Service Commission, which oversees and regulates utilities and their rates, has held some meetings and hearings, but Allison argued those haven't "gone to the level of really getting to the bottom of why this keeps happening over and over again."
Calling for a rate freeze
After the latest wave of outages, the league also called on the MPSC to freeze electric rates DTE and Consumers charge their customers.
"In the last five years, DTE Energy has jacked up our rates four times. Consumers Energy, which just got a rate increase in January, is back at it again, asking for another. For some reason in 2020, both companies paid zero dollars in federal taxes," Allison said. "Our utilities here in the state are regulated by us and receive a guaranteed profit of a 10% return on their investments, no matter what kind of service they provide."
The group Climate Central found that Michigan led all states with 111 major weather-related power outages between 2000 and 2019, affecting an average of at least 160,000 customers each year.
Responding to the Michigan LCV's concerns, DTE spokesperson Pete Ternes told Michigan Radio the company has not raised electricity rates since 2020. After a rate increase that year, the company made a commitment to hold rates steady until 2022.
Consumers Energy spokesperson Katie Carey said the company works "aggressively to reduce costs, achieving over $100 million in operational savings for our customers in 2020 alone."
The Citizens Utility Board of Michigan is a nonprofit, nonpartisan organization that advocates for residential energy customers. They released a report this week ranking Michigan against other states in many energy-related categories. The Michigan LCV cited the report in its call for an investigation and rate freeze.
"Michigan utilities have the third worst restoration time, of getting our power back on, in the nation, even on days without major storm events. They're also the third worst when factoring in kind of major storms, and in the Great Lakes region, we experience the most amount of minutes out of power on average annually," he said.
Old problem, newer solutions?
The concerns raised by the Michigan LCV aren't new. The group Climate Central found that between 2000 and 2019 Michigan experienced more major weather related outages than any other state. The American Society of Civil Engineers gave Michigan's energy grid a C- in 2018.
In a statement to Michigan Radio, DTE said it filed a "distribution grid plan" with the MPSC in September.
"The plan outlines a $7-billion, five-year investment in southeast Michigan’s electric grid, preparing the state for the 21st century demands posed by increasingly severe weather trends, automobility/electrification, and the fast-evolving needs of consumers and businesses," DTE said.
In its statement, Consumers mentioned the company's own plans to improve its grid.
"We filed a $5.4-billion electric reliability plan with the Michigan Public Service Commission back in June. To work to prevent outages, we’ve already more than doubled our investment in grid hardening reliability and increased our forestry investment by more than 60% since 2018," Consumers spokesperson Katie Carey said.
When asked what changes the league wants to see to the companies' operations, Allison turned to the issue of residential rooftop solar power.
"One of the things that goes unnoticed a little bit is the lobbying power of DTE and Consumers in Lansing to stand really against bipartisan legislation that will expand more affordable, reliable energy. That's happening right now in the form of a bill that's before the House Energy Committee. It would get rid of a 1% cap on rooftop solar in this state," he said.
"We're the only state in the country with this kind of cap, and it's stifling investment. It's preventing families and businesses from investing in rooftop solar."
There has been a long and ongoing debate over rooftop solar and its effects on the energy marketplace. Utility companies frequently claim when customers generate their own electricity and are paid for returning the excess to the grid, the expense of maintaining infrastructure is passed onto other customers who are not in the position to generate their own solar power.
Allison disputed that position.
"That that has been flatly refuted by the Michigan Public Service Commission itself, who released a finalized report in October, saying that there is no subsidy and that there is no cost shift between the people who have rooftop solar and those who don't. In fact, we know that the people who have rooftop solar are actually providing a very low cost energy back to the grid," he said. "[The utility companies] pay a wholesale rate for that excess energy under this one percent cap versus the real retail rate that they're charging [to] the neighbor next door."
Federal help coming
The new federal infrastructure law passed in November includes billions of dollars in spending for grid improvements across the country.
Allison said it's not clear yet how that might affect Michigan's power reliability.
"There's going to be a lot of decision making, both from the MPSC and from the Legislature on how best to invest those kind of resources. We think there's a huge opportunity again to build a 21st century energy system here in Michigan."
Editor's note: DTE Energy and Consumers Energy are among Michigan Radio's corporate sponsors.
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