This month, Michigan Attorney General
Dana Nessel filed comments with the Michigan Public Service Commission (MPSC)
on Consumers Energy Company’s 5-year distribution plan. The Commission required
Indiana Michigan Power Company, Consumers Energy Company, and DTE Electric
Company to file their 5-year distribution plans last fall and set separate 2024
deadlines for interested parties to file comments regarding the plans. The
Attorney General filed comment February 16th, arguing Consumers Energy failed
to articulate the degree of customer burden for their spending, does not focus
enough on reliability improvements, and includes no accountability measures
should they fail in their commitments.
The distribution plan details the
company’s 5-year investment plans for their electric distribution grid.
Consumers Energy forecast therein spending $7 billion over that time to address
electric reliability as well as other upgrades to the electric grid to address
future increased electrification.
“I applaud the Commission for ordering
the 5-year distribution plans, but we need to see these corporations address
their essential functions of affordability, reliability, and accountability,”
said Nessel. “Consumers Energy needs to refile a distribution plan that manages
to address these critical customer concerns. Michigan residents and ratepayers
deserve reliable and affordable electricity from their utility, and we’d like
to see them plan to deliver it.”
Nessel raised three major concerns to the
MPSC. First, there is little to no discussion on what the impact of this $7
billion investment would be on customers’ utility bills. An internal review by
the Department of Attorney General indicates that this $7 billion investment,
combined with increasing expenses, translates to a cost per customer of
approximately $4,600 over those 5 years. That is a significant increase for
customers and part of the distribution plan should address those increases to
customer bills and cost alternatives.
To justify this level of expenditure, the
distribution plan must make a compelling case that the spending is critically
necessary and targeted to those areas that will provide the most benefit to
customers. Consumers Energy’s plan, however, fails to provide such analysis.
For example, Consumers Energy articulates intentions to improve the number of
minutes that customers are without power following an event using a reliability
metric called System Average Interruption Duration Index or SAIDI. The utility
company’s plan explains that this new spending level on electric reliability
will decrease these outage minutes by 13 minutes compared to existing spending
levels. This amounts to only a 9% improvement in this metric compared to the
proposed 75% increase in capital spending to reach the goal. Not only is this
amount of spending for such a marginal outage duration improvement a poor deal
for customers, but there also are several other reliability metrics that must
be improved, such as the number and frequency of annual customer outages.
There is additionally no accountability
set forth in the plan should Consumers Energy fail to achieve their reliability
goal. Customers deserve a refund of the investment or some type of penalty if
Consumers Energy spends $7 billion and fails to achieve this 13-minute goal,
the comment from the Attorney General concludes.
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