Consumers Energy's faulty meters, customer complaints spur action from Michigan regulators - Detroit Free Press

Consumers Energy faulty meters spur action from Michigan regulators

Consumers Energy's faulty meters, customer complaints spur action from Michigan regulators
Arpan Lobo

Michigan regulators are taking aim at Consumers Energy, issuing an order for the company to explain why it shouldn't be held in violation over its billing practices — in particular, how the company provides bill estimates for customers in homes with faulty electric meters.

The state body that regulates utility companies, the Michigan Public Service Commission, issued a show cause order to Consumers during its meeting Thursday. The commission launched an investigation into Consumers' bill estimates in July after receiving "persistent" customer complaints about the issue.

Consumers Energy, based in Jackson, provides electric service to 1.9 million Michigan residents. In a reply brief filed with the MPSC in August, Consumers officials said the faulty meters causing the high frequency of estimated bills are due to network changes and poor vendor estimates for the amount of battery defects.

Verizon stopped servicing its 3G network at the start of the year, while hundreds of thousands of electric meters used by Consumers operated on the network. The MPSC says commission staff found Consumers had been providing customers with estimated bills even before service was discontinued, largely due to non-working meters.

Consumers says currently, around 1,000 customers have had their bills estimated for at least three months in a row. In 2022, there were more than 14,000 customers who faced consecutive estimated bills. That year, there were more than 260,000 estimated bills, with the majority of those caused by meter malfunctions.

Through July of this year, there were more than 570,000 estimated bills, with the large majority of those caused by 3G connectivity issues and meter malfunctions.

Consumers said its contracted meter vendor, Itron, failed to install 4G compatible meters after Verizon stopped providing 3G service used by older meters at the start of this year. This change affected nearly 190,000 meters that still needed replacing.

“Prior to the 3G network’s retirement, the Company’s meter vendor, Itron, failed to install all of the necessary new 4G compatible meters. Itron also failed to supply adequate personnel to read meters manually as the replacement project continued," officials wrote.

"In December 2022, around 188,000 Company meters associated with the 3G-to-4G conversion project still needed to be replaced. But Consumers Energy did not anticipate that these meters would result in estimated reads, since Itron was contractually obligated to perform manual meter reads until the 3G meters were exchanged.”

Consumers says it has made progress in upgrading old meters — as of late July, only around 23,000 3G meters were still in place, and the company aimed to fully replace the remaining meters by the end of August. An inquiry on whether those meters had been successfully replaced wasn't immediately answered by Consumers.

Making matters worse, hundreds of thousands of the new 4G compatible meters Consumers purchased ended up being defective — the company said nearly 900,000 meters purchased from Itron between 2015 and 2017 had been manufactured with contaminated batteries, something Itron informed Consumers of in 2021. While the majority of those meters did not fail as a result of the battery contamination, Consumers still had to replace 30,000 meters.

Supply chain issues plagued the company’s efforts to replace those meters. Consumers said it ordered 30,000 replacement meters in January but received the meters in partial shipments through the end of May.

Consumers received around 300 complaints about bill estimates from Jan. 2020 to July 2023.

During Thursday's meeting, Commissioner Katherine Peretick praised commission staff for investigating the issue and "upholding the rules." She also thanked members of the public for raising the issue. She said commissioners only became aware of the problem during a series of meetings held around the state to hear from utility customers.

Consumers, in another filing, must show cause to the MPSC by Nov. 14 indicating why the company should not be found in violation of the MPSC's billing regulations. A pre-hearing on the matter between the MPSC and Consumers is slated for Dec. 4.

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MPSC staff has been directed to continue its investigation into potential rules violations, audit the reliability of information provided by Consumers and provide testimony on its findings, according to a press release.

Lansing Bureau Chief Paul Egan contributed to this article. Contact Arpan Lobo: alobo@freepress.com. Follow him on X (Twitter) @arpanlobo.

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