Citizens Utility Board of Michigan

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.

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.