While it may seem at first glance that more money will mean better grid performance, that has not been historically true. Research by the Lawrence Berkeley National Laboratory has “found no correlation between investor-owned utility distribution capital spending increases and reliability improvement the following year,” Wired Group President Paul Alvarez said in testimony filed in the DTE rate case and sponsored by CUB, the Michigan Environmental Council (MEC), the Natural Resources Defense Council (NRDC) and the Sierra Club.
To put it another way, “more capital spending is not necessarily better than less,” Alvarez wrote. In Michigan, this phenomenon can be seen when both DTE and Consumers Energy favor capital spending, like replacing equipment like transformers with new models, over increased expenses like tree trimming, even though the latter is one of the most effective ways to improve reliability. As Alvarez points out, DTE itself has said in a press release that “in areas where tree trimming has been completed, communities have experienced, on average, 60% fewer outages.”
But DTE keeps trying to spend ratepayer money on more and more capital spending without getting a return on reliability. A chart from Alvarez’s testimony shows that despite a 229% increase in annual distribution grid capital spending from 2015 to 2021, the frequency of outages in DTE’s service territory has increased 58% over that timeframe.