Statement: Michigan PSC Order on Reliability Standards Is A ‘Missed Opportunity’ To Protect Michigan Residents, Citizens Utility Board of Michigan Says

In its first major regulation in response to the frequent power outages that have plagued Michigan consumers, the Michigan Public Service Commission on March 17 failed to approve important reforms advocated by the Citizens Utility Board of Michigan, Attorney General Dana Nessel and many other stakeholders that would have created additional consumer protections to set Michigan on the path to better electric reliability.

CUB, the AG and others had called for limits on the ability of Michigan’s utilities like DTE and Consumers Energy to recover the costs of those bill credits through higher electric rates. The Commission did not order any such action, meaning that utilities will be able to request rate hikes on the very same customers who suffer from poor electric reliability that is, in great part, the result of the utilities’ mismanagement of the distribution grid. The Commission also declined to endorse CUB’s proposal to more closely tie bill credits to the length of outages so customers get more compensation for longer outages.

CUB had called for a credit of $2 per hour. Instead, the MPSC approved a credit of $35 as well as $35 for each additional day of outage “beyond acceptable thresholds.” Even after extensive discussions in stakeholder meetings and comments, the MPSC rejected the $2 per hour proposal as “not reasonable” without any further explanation.

“After several years of discussions, the Commission’s order is very disappointing and represents a true missed opportunity. The Commissioners did not take the bold steps needed to confront the reliability crisis facing Michigan, where customers pay some of the highest electric rates in the country for some of the worst service in the country in terms of how often the power stays on,” CUB Executive Director Amy Bandyk said in a statement. “Michiganders deserve deeper reforms that will address the core problem with power outages: the lack of incentives for utilities to improve reliability.”

In its 2020 paper, Utility Regulatory Measures to Improve Electric Reliability in Michigan, as well as in several comments filed with the Commission, CUB outlined how Michigan can move toward a new approach where utilities are penalized for unacceptably poor reliability. The 2021 Utility Performance Report, the latest in CUB’s annual series on how Michigan utilities stack up against peers around the country, includes data demonstrating how Michigan has among the worst electric reliability of any state.