Citizens Utility Board of Michigan

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.

The public health and economic crisis we are all experiencing is like no other in recent history. Such an extreme event requires an extraordinary response. In the world of utilities, all over the country electricity and natural gas suppliers are taking the rare step of suspending disconnections of service for non-payment and waiving late fees and other charges, among other steps to prevent a bad situation from becoming far worse.

Source: Wikimedia Commons

The long road for the immediate future of Michigan’s largest utility is over, for now. On April 15, the Michigan Public Service Commission approved a revised version of DTE Energy’s integrated resource plan (IRP), the utility’s plan for the mix of coal, natural gas, solar, wind, energy efficiency and other resources it will use to produce energy for its customers over the next 5, 10 and 15 years.

The Upper Peninsula Energy Task Force has submitted to Governor Whitmer its formal recommendations on how to avoid a propane crisis in the region, where over 18% of households use propane, primarily for heating, compared to just under 8% for the Lower Peninsula.

Photo Source: Jenn Hill

The Upper Peninsula Energy Task Force just finished accepting comments on its draft report about how to supply the UP with propane given the possibility of supply disruption. Over 1,000 discrete comments have poured in on the task force’s work since it began, Michigan Department of Environment, Great Lakes and Energy (EGLE) Director Liesl Eichler Clark said during an April 13 meeting (Read CUB’s previous blog post with links to earlier coverage of the task force).

Public comments have closed on the Upper Peninsula Energy Task Force’s draft report on how to avoid price spikes in propane used across the UP for heating, especially in the case of a Line 5 shutdown. (Links to our previous blog posts are here, here, here, here and the first here.

All of the public comments submitted on draft report will be considered at the task force’s next meeting on April 13, which will still take place as a virtual meeting.

Percentage of Households with Propane, Draft of “Analysis of Propane Supply Alternatives for Michigan,” Public Sector Consultants, March 2020

The developing coronavirus crisis shows how everyday life can be upended by low-probability events. In energy, people are always talking about the importance of “resiliency.” Resiliency essentially means a system’s ability to respond to many different shocks. Events with relatively low probabilities often create the biggest system shocks.

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

Last summer the Citizens Utility Board of Michigan wrote about how a utility’s integrated resource plan (IRP) is an important roadmap for the future of the business and its customers. DTE’s long-term plan, proposed last year, could force its 2.2 million customers in southeast Michigan to pay millions on their electric bills for power plants that may be unnecessary. During a nearly year-long period of review, CUB and many other parties, including AG Dana Nessel and groups like the Union of Concerned Scientists and the Natural Resources Defense Council, pointed out the flaws included in DTE’s plan.

Now the Michigan Public Service Commission (MPSC) has finally reached an initial decision that essentially tells DTE to go back and fix many of the mistakes pointed out by CUB and other groups.

The debate over the future of the Enbridge Line 5 pipeline has been one of the biggest energy and environmental stories for Michigan over the past couple years. The Line 5 controversy was one of the contributing factors in Gov. Whitmer’s decision last summer to form the Upper Peninsula Energy Task Force to examine how the energy-constrained region can confront a number of challenges while keeping heating and power prices under control, including the potential closure of Line 5.

A recloser is a type of electrical equipment used to automatically detect faults on a line. Source: TheEnergeticEngineer, Wikimedia Foundation.

The Michigan Public Service Commission (MPSC) is undergoing a rare review of the standards for electric service quality and reliability, two things that all Michigan households depend upon to have a high quality of life. The Citizens Utility Board (CUB) of Michigan is participating in a Workgroup of utilities and other stakeholders that are advising the MPSC staff on how to update the standards, and any residential customer can get involved too (see our previous blog post about the first Workgroup meeting.)