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After hundreds of thousands of Michiganders across the state were left without power due to severe weather last week, the Michigan Public Service Commission (MPSC) is taking comments on proposed mechanisms to address energy reliability issues.
The commission — which provides oversight for electrical utilities in Michigan — announced on Wednesday that it will seek comments from stakeholders on a set of financial measures aimed at improving reliability, citing concerns from the length of time it takes DTE Energy and Consumers energy — the state’s largest energy providers — to restore power following an outage.
The commission’s straw proposal would establish penalties for utilities whose customers experience four or more sustained power interruptions per year.
Under the MPSC’s current service quality standards leading up to December 2029, no more than 6% of a utility’s customers may experience more than four sustained outages yearly, with the standard tightening to no more than 5% of customers after Jan. 1, 2030.
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According to annual utility reports, DTE had 163,417 customers experience more than four sustained outages in 2022, while Consumers Energy had 173,273 customers who experienced more than four sustained outages.
The proposal would also further penalize utilities if their customers experience seven or more sustained power interruptions.
In 2022, DTE had 16,262 customers experience more than seven prolonged outages while Consumers had 19,821.
Utilities would also face penalties if a circuit ranked in the top 10 worst-performing circuits for three or more years within the past five years.
The commission is also considering financial mechanisms linked to the amount of time it takes utilities to restore power, including a focus on restoration timelines during major storms.
“We share the public’s frustration with the number and duration of power outages, and particularly those who experience outages over and over again,” MPSC Chair Dan Scripps said in a statement.
“By focusing on the places where improvement is needed most, we’re working to better connect the financial performance of the utilities with the experience of their customers. Today’s actions of offering a straw proposal that ties financial metrics to the duration of outages and the number of customers experiencing multiple outages each year is a significant step towards that goal,” Scripps said.
The commission will take comments from stakeholders on the proposal until 5 p.m. Sept. 22, with reply comments due by 5 p.m. Oct. 20. Comments on the straw proposal should reference Case No. U-21400.
The commission will also take comments on a proposal to increase power outage credits to account for inflation. The MPSC previously increased power outage credits in March to $35 alongside making them automatic, and setting an adjustment for Oct.1 of each year to match the rate of inflation. The upcoming adjustment would increase credits to $38.
Credits are paid out after 96 hours during catastrophic conditions, defined as a utility having 10% or more of its customers without power; after 48 hours during gray sky conditions affecting between 1% and 10% of a utility’s customers, and after 16 hours during normal conditions. Affected customers currently receive $35 plus and additional $35 each day their power is out.
Anyone can submit public comments on the proposed revised bill credit. Comments should reference Case No. U-20629 and must be received by 5 p.m. Sept. 13.
Comments may be mailed to Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909, or emailed to [emailprotected]. Comments also may be filed through the Commission’s E-Dockets system at the case number, with instructions available on the E-Dockets website.
The commission also announced that Liberty Consulting Group — which provides consulting services in the energy and telecommunications industry — would provide an independent third-party audit and review of Consumers and DTE’s electric distribution systems, including all equipment and operations. The commission announced it would seek the audit in October 2022.
The consulting company’s contract, which began Aug. 1, requires it to file a summary report on the audit’s progress by Dec. 31, with the final report expected in late summer 2024.
“The results of this audit will help inform what actions need to be taken to significantly improve reliability, make Michigan’s electric grid more resilient to extreme weather, and reduce the risks of the public coming in contact with downed power lines,” Commissioner Alessandra Carreon said in a statement.
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