Citizens Utility Board of Michigan

An EV charging station at a parking deck in Houghton, Mich. Source: Plugshare.com

It has been almost an entire summer since we checked in on the progress of the Upper Peninsula Energy Task Force, which, after delivering its report on propane supply and alternatives to Line 5, is now about six months away from a final report on much broader energy issues facing this unique part of Michigan. For this second phase the task force is asked by the governor to “formulate alternative solutions for meeting the UP’s energy needs, with a focus on security, reliability, affordability, and environmental soundness.”

Michigan regulators have approved a settlement agreement that concludes Consumers Gas’s latest rate case, cuts the utility’s requested rate increase on residential customers by about half and provides additional assistance to low-income customers who are struggling to pay utility bills in the current economic climate.

On Aug. 20 the Michigan Public Service Commission approved a settlement agreement that allows DTE’s natural gas utility to increase monthly bills for a typical residential customer by 3.9%, down from the 8.3% originally requested by DTE.

The new rates will come into effect on Oct. 1, 2020. But just a few months later, in January, 2021, an infrastructure recovery mechanism will go into effect that will push rates up by 0.8%, so a typical residential customer using 100 cubic feet of gas per month will see their bills go up by 4.7% overall, according to a statement from the Michigan Public Service Commission.

Electric utilities are often talked about as being in a state of transition, needing to adapt, move into the 21st century, and a host of other buzz terms. For example: the Michigan Public Service Commission (MPSC) describes the purpose of Michigan’s MI Power Grid initiative as “to maximize the benefits of the transition to clean, distributed energy resources for Michigan residents and businesses” and “make changes to utility regulation designed to ensure that the state’s clean energy future provides safe, reliable, affordable, and accessible energy resources.”

The COVID-19 pandemic is revealing many gaps in emergency preparedness and disaster mitigation across the country. In the world of energy, some of the biggest potential emergencies stem from problems with the reliability of the electric grid, such as frequent blackouts. As has been reported several times, the pandemic, which has caused significant shifts in electric demand and made essential personnel scarcer, is a potential threat to reliability…

[Please read the entire article by CUB President Robert Nelson on Energy News Network]

The Upper Peninsula Energy Task Force turned its attention in May and June meetings to studying the grid that delivers electricity to homes and businesses in the UP – the power generation assets (power plants, etc.) and the transmission and distribution lines that crisscross the peninsula. This work encompasses the second charge in Executive Order 2019-14 from Governor Gretchen Whitmer for the task force: “to formulate alternative solutions for meeting the region’s energy needs, with a focus on security, reliability, affordability and environmental soundness. “ The task force must submit its report on overall UP energy issues and alternatives to Gov. Whitmer by March 31, 2021.

Photo by Brendan Wood, licensed under Creative Commons Attribution-ShareAlike 2.0.

Earlier this week the Michigan state government announced measures that will help low-income ratepayers deal with the imminent removal of certain protections utilities have been offering since the pandemic began in March. This move will mitigate at least some of the economic harm when, as CUB blogged about last month, a “backlog” of unpaid bills built up over this period of economic crisis becomes due.

DTE’s Belle River coal plant. Source: https://www.flickr.com/photos/tgrab/16611294377

The Union of Concerned Scientists has a new study that argues that the incredibly complex wholesale electricity markets in the U.S. have loopholes that are creating heavy costs for ratepayers of regulated electric utilities like DTE Energy and Consumers Energy.

Photo by Brendan Wood, licensed under Creative Commons Attribution-ShareAlike 2.0.

Anyone who has looked into how utility rates are set has found out that it can be one of the driest, most jargon-filled subject matters around. Because they are so unfriendly to the layperson, utility topics are prone to misinterpretation when talked about in plain English.

An example is DTE’s recent announcement that it is passing $30 million to $40 million in savings from lower-than-expected fuel costs to customers. This move was reported in several places as an act of DTE lowering electricity rates. DTE’s phrasing in its own press release, describing the action as “bill relief” in response to the “hardships” customers are experiencing due to COVID-19, reinforces this idea that the utility is giving a gift to customers. Understandably, on social media some DTE ratepayers are scoffing at this “bill relief,” because it effectively means rates are only about 3% to 4% lower in the months of June and July. Some are saying that is puny compared to the much larger rate increase that DTE received regulatory approval for on May 8. That rate case increases electric rates by 5.4% for residential customers.*

Source: Wikimedia Commons

The Michigan Public Service Commission’s (MPSC) May 8 order on DTE Energy’s rate increase request could be one of the most important decisions the commission makes this year. It signals that a big change might be coming in the relationship between regulators and investor-owned utilities. The MPSC ordered a major investor-owned utility to propose a system of “performance-based regulation” – in which the utility’s financial returns are tied to metrics on how well it is doing its job of providing reliable energy to customers.