Michigan regulators seek penalties for repeat utility outages

• State regulators announce unspecified penalties for long-lasting power outages
• The move follows yet another extended outage in southeast Michigan amid a year of them
• Regulators will  pay $1.7 million for an audit of Consumers Energy and DTE Energy

Michigan regulators are moving to force the state’s biggest electricity suppliers — Consumers Energy and DTE Energy — to improve reliability by penalizing them for repeat outages.

The Michigan Public Service Commission this week announced it will impose unspecified penalties on companies whose customers lose power four or more times each year, and harsher penalties if customers experience seven or more outages.

According to state standards, no more than 6 percent of customers should experience over four outages, and by Jan. 1, 2030, that increases to 5 percent. 

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Officials are also considering financial penalties that take into account the time it takes the utility companies to restore power, especially during major storms. 

The commission is concerned “about the length of time it takes the state’s two largest utilities to restore power after an outage and the significant numbers of utility customers experiencing repeat outages each year,” according to a public statement. 

The move follows an extended outage in southeast Michigan following a severe thunderstorm last week that caused flooding statewide and knocked power out to 250,000 residents. In February, a rare ice storm hit the upper Midwest and 700,000 Michigan homes were without power, some for nearly a week. 

“We share the public’s frustration with the number and duration of power outages, and particularly those who experience outages over and over again,” said Dan Scripps, chair of the service commission.

DTE serves about 2.3 million customers in southeast Michigan, while Consumers serves 1.8 million in the Lower Peninsula.

Climate change is blamed on increased storms, which prompted a need to audit both systems. The commission has hired Liberty Consulting Group, based in Pennsylvania, for a $1.7 million contract in July to conduct a review. 

A progress report is due Dec. 31, while the final audit is expected by next summer.

“Through the audit, the MPSC looks forward to gaining a deeper understanding of the challenges that DTE (Energy) and Consumers face as we continue to experience increasingly frequent and severe storms so we can develop effective solutions,” said Commissioner Katherine Peretick. 

Commissioner Alessandra Carreon added the audit “will help inform what actions need to be taken to significantly improve reliability, make Michigan’s electric grid more resilient to extreme weather, and reduce the risks of the public coming in contact with downed power lines."

In a statement, Consumers wrote that it “shares the commission’s commitment to improving our customers’ experience and improving the reliability and resiliency of our system.”

“We are working hard to achieve that goal and will provide feedback on the proposal as invited by the commission.”

DTE shared similar sentiments: “We are reviewing the order and will offer feedback at the request of the commission on performance-based disincentives and incentives.” 

“Our work to reduce the frequency and duration of outages is already underway.”