The Michigan Public Service Commission today has done the right thing for Michigan ratepayers by taking swift action to approve an order on new rules to protect consumers and improve the oversight of electric utilities following the devastating outages that have been the latest reminder of Michigan utilities’ poor electric reliability record.
MPSC Chairman Dan Scripps was spot-on when he said in the commission meeting today that we need “to move away from the cycle of bad storm and a response, then another bad storm and a response” and instead make better reliability performance an enduring part of utility strategy.
As outlined in the MPSC’s order in case U-21122, the MPSC is:
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Accelerating the implementation of new service quality standards to require utilities to automatically issue bill credits to customers following prolonged outages, increase the size of the credit from $25 to $35 and, crucially, add a $2 per hour multiplier for particularly long outages
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Requiring reports from DTE, Consumers Energy and other investor-owned utilities that must detail steps they have taken to maintain a reliable grid, allowing the public to better scrutinize the effectiveness of their practices
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Requesting information from utilities to help develop long-term policies to make the utilities more accountable, including enacting new financial incentives and penalties based on the quality of utility performance
These are all proposals CUB supported in its March 2020 report on regulatory steps needed to improve reliability, as well as in stakeholder sessions with the MPSC staff to develop the changes to the service quality standards. We thank the commission for citing CUB’s research in the order.
There is still more to digest about this order. The improvements to bill credits are overall positive but, as CUB explained in a blog post earlier this year, in some respects not as strong as they should be, and we plan to work with the MPSC on further enhancing these consumer protections. The extent to which utilities can recover the cost of bill credits and spending related to reliability will also be crucial in rate cases going forward.
The Citizens Utility Board of Michigan (CUB of MI) was formed in 2018 to represent the interests of residential energy customers across the state of Michigan. CUB of MI educates and engages Michigan consumers in support of cost-effective investment in energy efficiency and renewable energy and against unfair rate increase requests.
CUB of MI gives a voice to Michigan utility customers and helps to ensure that citizens of the state pay the lowest reasonable rate for utility services and also benefit from the environmental implications of investment in clean energy. CUB of MI is a nonpartisan, nonprofit organization whose members are individual residential customers of Michigan’s energy utilities.