Michigan Attorney General Dana Nessel and other interested parties recently filed comments with the Michigan Public Service Commission (MPSC) in response to an audit of the electric distribution system of Consumers Energy Company and DTE Electric Company. The audit followed a decision made by the MPSC in October 2022 after severe power outages affected both Consumers Energy’s and DTE’s electric service territories earlier that year.
After noting that Michigan utilities are third worst in the nation for the amount of time it takes power to be restored, the Commission directed its staff to hire a third-party consultant to audit the electric distribution systems of both Consumers Energy and DTE with a focus “on actions necessary to reduce the total number of outages and duration of outages, and on the identification of needed improvements to safety...” The audit reports were filed in September of this year and both utilities filed responses to the audit last month.
A key finding in the audit was that tree contact with power lines is the primary cause of power outages by both Consumers Energy and DTE. Tree trimming for a utility generally does not require capital spending, but rather the use of operations and maintenance expenses. The audit noted that despite significant increases in capital spending over the past 7 or 8 years, neither utility showed substantial improvements in addressing electric reliability. In their five-year forecasts for electric distribution planning, however, both utility companies are again proposing further significant increases in capital spending, amounting to hundreds of millions of dollars, to purportedly address electric reliability and other issues.
In her comments filed last week regarding the audit, Nessel criticized the utilities’ focus on capital spending – which provides the company and its shareholders a nearly 10 percent return on every dollar spent – over tree trimming, despite evidence that capital spending has not significantly improved reliability. She also criticized the lack of accountability to customers for both Consumers Energy and DTE, noting that both utilities can seek to recover billions of dollars from ratepayers while making promises of performance improvements with no penalty for failing to deliver.
In addition, the attorney general criticized the audit itself, noting it did not directly address the root cause of past electric reliability failures, which makes it difficult to prevent similar issues in the future.
“I share the frustration felt by ratepayers and the Commission regarding the persistent, unacceptable power outages that plague both Consumers Energy and DTE customers,” Nessel said. “While I commend the Commission for conducting this audit, it is merely a first step. We need concrete, decisive action and answers regarding past failures to prevent them in the future. Focusing on reliability, accountability, and affordability is essential to improving performance.”
The utilities and other interested parties have an opportunity to respond to comments filed this week. The Commission will continue its investigation after reviewing all the comments filed.
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