Michigan electric providers, including DTE Energy and Consumers Energy, could be penalized up to $10 million for failing to improve reliability under an order approved Thursday by the Michigan Public Service Commission.
The MPSC formed a workgroup in 2023 to consider formalizing financial penalties and incentives that would hold utilities accountable for lengthy and frequent power outages.
“Our goal from the beginning was to develop a framework that, above all, drives improvement in reliability, particularly in the areas that are most frustrating for customers,” said MPSC chair Dan Scripps in a statement. “By staying focused on a relatively small number of performance metrics closely tied to the most acute pain points experienced by customers, I’m confident that this framework will help accelerate the progress we’re already seeing in distribution and reliability improvement.”
MPSC said the workgroup sought “extensive” public input to develop a proposal that outlines metrics to drive improvements including:
∎ Average length of customer outages
∎ Length of time utilities take to restore power both after storms and in calm weather conditions
∎ Number of customers experiencing four or more outages per year
∎ Utilities’ worst-performing circuits
A third-party audit released in September found that DTE and Consumers, Michigan’s two largest utilities, had “worse than average” interruptions and restoration delays, compared to other utilities.
The commission directed DTE and Consumers, which combine to serve about 4.1 million customers, or about 80% of Michigan’s electric customers, to both file their own financial incentive and disincentive systems by April 15.
“Today’s order from the Michigan Public Service Commission is the result of constructive dialogue among many stakeholders over the past two years,” DTE Energy spokesperson Ryan Lowry said in a statement. “DTE Energy supports the framework’s focus on reliability, as it aligns with the company’s commitment of reducing outages by 30% and cutting outage time in half by 2029.”
Jackson-based Consumers Energy did not immediately respond to a request for comment.
The commission said in a press release that it modified the workgroup’s initial proposal so that it will focus initially on “improving the fundamentals of distribution reliability.” The workgroup will later turn its attention to other issues like the impact of increasing demand on the grid from growth in distributed generation technologies like solar panels and electric vehicle usage.
Michigan Attorney General Dana Nessel called the order “a great first step” and said she has advocated for the state’s utility regulators to establish such metrics and penalties for years. She said the performance metrics adopted by the MPSC are very similar to what she had proposed.
“After years of fighting to hold DTE and Consumers Energy accountable to their customers when they fail to deliver reliably, or make meaningful improvements, I am grateful the MPSC has largely adopted my department’s proposals to tether electric reliability to the utilities’ corporate interest — profits,” Nessel said in a statement. “These badly needed financial penalties will help to defend the interests of Michigan utility ratepayers, in a language we hope now the executives and shareholders will prioritize.”
Nessel pledged to push for additional protections for electric customers “because Michigan ratepayers deserve the kind of top-tier reliability for which they have been paying but not receiving.”
Frustration over responses by DTE and Consumers has grown in recent years from weather-related outages.
More than 700,000 DTE customers, or 30% of its 2.3 million customers in southeast Michigan and the Thumb, along with roughly 234,000 Consumers Energy customers lost power after a Feb. 22, 2023, ice storm downed roughly 11,000 power lines. Other outages followed more storms and led residents at one town hall to demand answers to the high number of power outages in the storms. Some residents were in the dark for nearly a week.
MPSC capped penalties and incentives at $10 million for the 2026 calendar year.
The utilities also were directed to closely track reliability in locations with high scores on the state’s environmental justice screening tool to inform potential future metrics on equity, grid modernization and other aspects. Areas that rate the highest on the tool, known as MiEJScreen, are generally the state’s urban centers.
The commission plans to review its metrics by Oct. 15, 2027.
mreinhart@detroitnews.com