Lawmakers slam 'new normal' of DTE, Consumers outages in hours-long hearing - Detroit News
Michigan lawmakers slam 'new normal' of DTE, Consumers outages
Lawmakers slam 'new normal' of DTE, Consumers outages in hours-long hearing
Beth LeBlanc
Lansing — Michigan lawmakers grilled executives from the state's two largest utilities Wednesday about prolonged and widespread power outages in February that left hundreds of thousands of residents across the state without electricity in cold conditions.
At a House hearing, lawmakers questioned huge profits boasted by utility giants DTE Energy and Consumers Energy, the inadequacy of a $25 to $35 credit for outages, the disparate treatment of low-income communities and the possibility of future rates that would depend on a state-regulated utility's performance.
"We cannot and will not accept this as the new normal," said Rep. Helena Scott, the Detroit Democrat who leads the House Energy, Communications and Technology committee.
Scott said she expects the Legislature will form a workgroup with the state utility regulatory arm, the Michigan Public Service Commission, to determine what statutory changes need to be made to stop or limit future outages. Apologies aren't enough, she said.
"It’s unconscionable that people have been going so long without power, without food, losing medicine," Scott said. "I think, if anything we got from this hearing, change needs to come and we’re going to start doing that in this Legislature."
A top DTE Energy executive apologized for the outages and said the Detroit-based company was accelerating its investment plans in the face of more frequent extreme weather events and century-old infrastructure. He said certain investments — such as tree trimming and automation — can be done in the near-term, but long-term changes will take time.
"I'm not making excuses, but we have a massive electrical system at DTE and it's going to take decades for us to continue to invest," said Trevor Lauer, president and chief operating officer of DTE Electric.
An executive for Consumers Energy similarly said the Jackson-based utility was working to harden its electric distribution system to prevent against future outages or limit the duration of those outages.
"Our investments in reliability show that we are headed in the right direction," said Tonya Berry, senior vice president of transformation and engineering at CMS Energy Corp., the parent company of Consumers Energy. "However, because of the vast scale of our system it will take dollars and time.”
Michigan Public Service Commissioner Katherine Peretick said the recent outages are "unacceptable" and noted next week new rules are set to take effect that set higher standards related to outages. The state regulator also is exploring the possibility of performance-based rates and were in the process of commissioning an independent audit of Michigan's electrical system.
"While the causes of poor reliability are technical in nature, the impacts of poor reliability are anything but technical," Peretick said. "...When the power goes out people lose."
More: Why Michigan struggles with energy reliability — and what's being done about it
Defending profits
Lauer defended DTE Energy against allegations from some lawmakers that the publicly traded company was putting shareholders ahead of customers by delaying investments in the system last year to boost profits and stock dividends. He said none of those delays had been implemented yet and, when they are, they would not affect reliability.
"We do not try to exceed dividends" that other utilities experience, Lauer argued. "We try to run in the middle of the pack."
Lauer also rejected claims from lawmakers that the utility failed to invest in low-income neighborhoods, noting the company uses state environmental justice screening tools that verify DTE's equitable investments in communities.
But lawmakers pushed back on Lauer's argument that the company hasn't had the requisite time and funds to make needed investments.
Rep. Joey Andrews, D-St. Joseph, noted that he didn't live in DTE Energy or Consumers Energy electric service territory but was still subject to lake effect storms similar to those elsewhere in the state.
Even with those storms, Andrews said, power outages are more rare and shorter in duration where he lives in southwest Michigan.
"I do think there is a choice being made about investment in the grid and stability in the grid that is not being made in other parts of the state," Andrews said.
Rep. Jenn Hill, D-Marquette, noted DTE in earlier testimony had estimated the cost of the storm credits would amount to about a $5.1 million hit. But DTE reported earnings last year of about $1.1 billion.
"Those numbers seem quite out of scale," Hill said.
Last month, Consumers Energy's parent company reported $1.3 billion in net profit for 2022.
More: How Michigan taxpayers could help DTE Energy service a ski resort
A Third World comparison
Residents also expressed frustration at the duration of outages and poor communications regarding restoration time from DTE and Consumers.
Highland Park Mayor Glenda McDonald noted her city was particularly affected by outages and endured four outages so far between February and March.
"In this last outage, my fire department went down, my police department went down, city hall went down and two senior centers," McDonald said, noting the city's generators for the fire department didn't kick in. "They had to lift up the doors if they had a fire.
"I cannot run a city, however small it is, without power," McDonald said.
Elouise Garley, a resident of Detroit and an immigrant from Liberia, compared DTE's service to what you would see in a developing country. Because she had COVID during the four-day February outage, she was unable to stay elsewhere and had to use her gas stove to stay warm.
"When I came to the USA in 2000, I never thought I would face a developing country crisis — frequent power outages," she said.
Other residents expressed disbelief that state and federal officials continued to push for electric vehicle adoption when the state cannot keep residential power on.