Michigan reps to DTE Energy CEO: Why do you deserve $10M in pay?

• Lawmakers question DTE chair Gerardo Norcia over rate increases and power outages
• He blames aging infrastructure and pledges improvements are on the way
• DTE plans fully automated systems within the next six years to restore power faster and more efficiently. 

LANSING — DTE Energy is on the hot seat again with Michigan lawmakers over rate increases and power outages.

Days after a Sunday thunderstorm knocked out power temporarily to 74,000 customers, a state House committee on Wednesday grilled DTE CEO and Chair Gerardo Norcia over his compensation and the utility’s service. Lawmakers called for hearings after 450,000 customers lost power during ice storms in February.

That month, DTE requested a rate increase from the Michigan Public Service Commission after receiving a $30 million rate increase last November. If approved, the new residential rate would boost residential monthly bill by $12.46 to an average of roughly $129 per month.

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• Michigan Democrats pressure utilities: more credits for power outages

“This power is a right of all of our citizens to have it,” said Rep. Jamie Churches, D-Wyandotte, noting that some constituents can’t afford to replace medicine or food spoiled during power outages.

During the committee meeting, Rep. Mike McFall, D-Hazel Park, pointed out that Norcia made $10 million last year. 

“I have people that can barely pay their bills, and you’re asking for such a large rate increase,” McFall said. “How do I explain to residents in my district, who can barely pay their bills now and can’t always count on their service, that type of rate increase?” 

DTE serves a total of 2.3 million electric customers in southeast Michigan and the Thumb, while it provides gas to 1.3 million customers in Michigan.

Norcia said last year’s rate increase was the first in four years after the company tried its best to flatten rates during the pandemic. 

Although the company made over $1 billion in profits last year, Norcia told lawmakers that most of his salary does not come from rate increases. He did not elaborate and DTE officials didn’t return messages seeking comment on Wednesday, but company documents indicate the compensation is tied to DTE’s earnings per share, cash flow and 20 other measures.

According to the U.S. Securities and Exchange Commission, Norcia’s total compensation in 2022 came from $1.3 million in salary, $1.9 million in bonuses and $7 million in stocks. His base salary is less than that of his predecessor, Gerard M. Anderson, according to DTE.

Heavy rain hit most of the state hard Sunday night and into Monday according to the National Weather Service. Wind gusts reached 65 mph, causing many fallen trees and branches.

“We are five years into a seven-year aggressive tree trimming program,” Norcia told legislators. “Fallen trees are responsible for nearly 70 percent of the time our customers spend without power.” 

During Wednesday’s hearing, Norcia outlined a plan to improve service that includes more frequent maintenance, rebuilding up to 16,000 miles of the grid especially in areas like Detroit, Ann Arbor and Dearborn where the infrastructure is much older. 

DTE also plans to install fully automated systems within the next six years that could help restore power faster and more efficiently. 

In low-income areas, “the grids don’t seem to get updated,” McFall said during Wednesday.s hearing.

“I have a larger lower-income population [and] a larger minority population and those ones seem to be on the end of the list instead of the front of the list,” for grid improvements.   

Michigan has some of the highest utility rates in the Midwest, according to most recent data from the U.S. Energy and Information Administration.  An Illinois group that fights rate hikes, the Citizens Utility Board, in January ranked Michigan 45th among states for electrical reliability. 

In September, the Michigan Public Service Commission found that the current distribution system used by utility companies is unreliable. 

The commission also ordered an audit for DTE and Consumers Energy, the state's two largest utilities.