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Mich. utilities among worst in the US at fixing electric outages

Keith Matheny  


    Michigan's two largest electricity providers, DTE and Consumers Energy, are among the worst-performing utilities in the country at how long it takes them to get the lights back on after a power outage, a review of reliability data shows.

    Despite that, Michiganders pay more for electricity than their neighbors around the Great Lakes.

    About 700,000 DTE and Consumers Energy customers faced outages of up to five days or more following late-February ice storms, and many were then left in the dark by a second winter storm less than two weeks later. It was a familiar feeling, the fourth outage since July 2019 involving 470,000 or more DTE and/or Consumers customers that took days to restore.

    Officials with the two utilities blame more severe weather happening more often in Michigan — and it is. But the data shows the utilities perform even worse compared with similar size counterparts on the duration of power outages that don't involve severe weather.

    Advocate: Utilities fall short in hardening grid; regulators are soft

    Amy Bandyk is executive director of the Michigan Citizens Utility Board, an organization formed in 2018 to represent ratepayer interests in utility rate cases and other matters before the state's utility regulator, the Michigan Public Service Commission. She said DTE and Consumers take longer to restore power because they aren't investing enough in hardening their electrical grid and cost-effective outage prevention measures, and state regulators aren't forcing them to do more.

    "We see that in the data, for years, Michigan has had worse power outages than neighboring states dealing with similar weather," she said. "Michigan utility customers already pay some of the highest rates in the Midwest compared to our neighbors and the country, but it doesn't address the basic problems with how our major utilities are regulated."

    Michigan's residential electricity price of 17.79 cents per kilowatt hour in December outpaced all other Great Lakes region states, 9.9% higher than the next-highest Midwestern state, Illinois.

    The number of outages per year that DTE and Consumers experience is not much different from other large U.S. utilities. It's the duration of those outages where the Michigan utilities plunge toward the bottom.

    For 2021, the most recent year for which the federal data from utilities is available from the U.S. Energy Information Administration, 40 power utilities nationwide had 1 million customers or more, including DTE and its 2.23 million electric customers and Consumers Energy's 1.86 million customers. The group includes several utilities also in the Great Lakes region that face similar weather challenges, in Ohio, Wisconsin, Minnesota, Illinois, Pennsylvania and upstate New York.

    Of those 40 similar size utilities, DTE finished 38th and Consumers 37th in average duration of customer interruptions caused by severe weather. The only utilities with worse numbers in 2021: Entergy in Louisiana, which was responding to landfall from Category 4 Hurricane Ida, and CenterPoint Energy in Texas, which faced a record winter storm and deep freeze that caused a statewide emergency.

    Using another method to measure outages — total minutes of customer disruption divided by the total number of customers interrupted — DTE finished 39th of 40 utilities in 2021 on outage durations caused by severe weather events. Only Entergy in Louisiana took longer to restore power. Consumers ranked 30th by that measure.

    'The weather is just fundamentally changed here in Michigan'

    Trevor Lauer, president and chief operating officer of DTE's electrical division, attributed the difficulties to Michigan's changing weather.

    "What used to be referred to as once-a-century or once-a-decade are now coming at us with regularity," he said.

    "The weather is just fundamentally changed here in Michigan, so we need to continue to make our grid resilient."

    But DTE and Consumers perform even worse on duration of power outages not involving severe weather. From 2013 to 2021, the years for which the utilities' reliability data is available, Consumers Energy finished in the bottom five of similar size counterparts from across the U.S. nine out of nine years — dead-last four of those years. In seven of the nine years, DTE and Consumers finished as either the bottom two for non-weather-related outage duration, or one utility away from the bottom two.

    "If this is the new normal, we need a grid that keeps up."

    — MPSC Chairman Dan Scripps

    Why large blackouts keep happening, and why they take so long to restore, is a question being asked more impatiently than ever — by Michigan residents, in the halls of the Legislature and at the Public Service Commission.

    "When you look at the performance metrics, we are clearly not where we need to be, particularly with the length of time it takes to get folks back restored after a storm, and the number of people who are experiencing multiple outages year-in and year-out," MPSC Chairman Dan Scripps said.

    Extreme weather is a significant factor, he said.

    "We've seen historic ice storms, the worst in 50 years; and 2021 was probably the worst summer in terms of the number of extreme weather events," Scripps said. "But I think that's part of what is frustrating to people — it can't be historic if it happens every other year.

    "If this is the new normal, we need a grid that keeps up. And what we are seeing over the last couple of years — over the last 10 years; unfortunately, this isn't a new problem — is that we've got a long way to go."

    Powerless resident: 'It screws your entire life up'

    Monroe resident and DTE customer Vicky Johansson was left in the dark by the late-February ice storm.

    "Living in the area, you've come to expect you are bound to lose your power, really, really often. But that ice storm was really out of the norm," she said.

    Johansson's apartment lost power on Feb. 22, and didn't get it back until the evening of Feb. 27.

    "We were covering windows with blankets, trying to stay warm," she said. "We tried looking for a hotel room but there was nothing down to almost Toledo."

    On their third day in the dark, Johansson and her husband found a nearby motel with available room. They spent Friday through Monday there before their power was restored.

    "We probably lost $300 worth of fresh and frozen food," she said. "It screws your entire life up."

    On the day her power was restored, another winter storm temporarily knocked it out again. It came back on that same day.

    "To have a four-day outage in the middle of winter is unacceptable in modern times."

    — DTE customer Nancy Fischer

    Nancy Fisher, a DTE electric customer, lost power for three days at her Livonia home in the late February ice storm, then for three more days in the early March storm.

    "We spent way over $100 fueling our generator," she said. "Who knows what our Consumers Energy gas bill is going to be, running our gas fireplace 24 hours all of those days.

    "We should be comparable to Ohio, Indiana, parts of Pennsylvania. Why aren't they experiencing this? To have a four-day outage in the middle of winter is unacceptable in modern times. And what's going to happen when everyone has electric cars?"

    'It feels like we are doing the same thing over and over again'

    The MPSC has conducted reviews following large storms in recent years, including the June and August 2021 storms that brought high winds and flooding — and left hundreds of thousands without power in Michigan for days.

    "We did that after that historic summer of storms: (looked at) resource allocations, at strategic undergrounding (placing electric wires underground), other things that could go on," Scripps said. "Including looking at some other utilities from peer states — we had some folks from Wisconsin come in and talk about some of the work they have done over the last several years.

    "The frustration is, it feels like we are doing the same thing over and over again, and there have been some improvements, but we haven't seen the level of improvements we would like to see and I know the people of Michigan would like to see."

    That frustration fueled the MPSC last October to order a third-party audit and review of all equipment and operations of DTE's and Consumers Energy's distribution systems. Requests for proposals to conduct the audit went out for bid earlier this month.

    "I want to know what solutions are out there that we aren't implementing today in Michigan that we can bring to Michigan," Scripps said.

    DTE: The system needs more automation

    The age of the electricity infrastructure is a contributor, Lauer said.

    "In a new city like Charlotte (North Carolina), most of their utility infrastructure has been built in the last 30 years, and it all has the latest automation on it," he said. "You have what we call remote operability.

    "Here in DTE's service territory, we were one of the first electrified cities not only in the United States but in the world. Very little of our existing system has automation on it."

    DTE proposes to install up to 10,000 automation devices on power lines over the next five years that would allow the utility to better isolate outages and reroute power to keep the lights on for most, before a truck and crew even heads out. "As long as we can get consensus with our regulators and our other stakeholders that it's a good thing to do," Lauer said.

    "Think about the old Christmas tree lights — when you used to lose one light bulb, everything went out," he said. "Now you lose one light bulb, everything else remains lit. That's the way you can reroute power on the electrical system, if you install the correct devices out in the field."

    DTE recently implemented a major software upgrade in anticipation of the automation devices, Lauer said.

    But Scripps indicated the utilities themselves have not always maximized system improvements.

    "Over the course of several rate cases, we have encouraged — in very strong terms — for DTE and Consumers to spend the money that's been proposed and approved by us for strategic capital, the sort of long-term upgrades on the system," he said. "And not to use it for storm response, emergent capital, whatever else. And there have been challenges."

    The MPSC sets the utility's rates, but it can't set their budget priorities, Scripps said.

    "They have not been doing an adequate job of tree-trimming all along."

    Douglas Jester

    "The rates we set are based on expectations of what the dollars are going to be spent for," he said. "But once those are set, there are management decisions that come in. Sometimes, dollars that were supposed to go to strategic capital end up being used for other purposes. And that just puts us further and further behind."

    Douglas Jester is managing partner of East Lansing-based 5 Lakes Energy, an energy policy consulting firm that frequently intervenes in DTE and Consumers rate cases and provides expertise on utility-related policy matters in other states as well.

    "It has always seemed to me that Michigan utilities have not had to work hard enough for their money, based on my observations of other utilities," he said.

    Tree-trimming underway, but a lot more to do

    Jester sees DTE's and Consumers' outage duration problem as having one primary culprit: Trees and branches. The high wind and heavy ice break branches that fall on power lines, and felled trees often add complication to slow responses, he said.

    "They have not been doing an adequate job of tree-trimming all along," he said.

    Consumers Energy officials responded to Free Press interview requests with an emailed statement. They noted that they implemented the utility's electric distribution plan in 2020, filed it in 2021 and began work last year.

    "In 2022 we completed over 2,000 electric infrastructure projects, cleared vegetation along 7,000 miles of power lines, replaced 10,000 poles, upgraded 100 substations and continued to incorporate smart technologies to improve grid operations," they stated.

    The efforts showed results, they said: nearly 20% fewer customer outages compared with the year before, and a 50% reduction in the total minutes customers were without power — though that was compared with storm-ravaged 2021.

    "More than 96% of those (2022) customer outages were restored in less than 24 hours," they stated.

    "Where we are doing the tree-trimming, it's showing clear results."

    — DTE's Trevor Lauer

    DTE in September 2021, following a summer full of catastrophic storms and outages, announced a tree-trimming surge program, an additional $70 million over the $190 million the utility typically spends on tree-trimming. In an update to the MPSC on the program earlier this month, DTE said it conducted 6,714 miles of tree-trimming under the enhanced program last year, a 20% increase from 2020.

    "I think our tree-trimming program is working great," Lauer said. "Where we are doing the tree-trimming, it's showing clear results. But we can only cut so many trees inside of a utility right of way. And even inside of a right of way, residents, our customers, have to allow us to trim those trees. We're not allowed to go in and just take them down."

    In the recent ice storm, the No. 1 driver of outages was large trees falling onto wires from people's private property, Lauer said. A program started in 2016 to place underground the service drop lines from a power pole to a home is also helping, he said.

    In a departure from past practices, the dollars earmarked for DTE's tree-trimming surge must be demonstrably spent on that activity, Scripps said.

    "I think we are getting to the point where we are getting past the frustration of approving dollars in rates that ultimately are spent on other things and looking at regulatory options to make sure that the money that's supposed to be spent on reliability — whether it's tree-trimming or grid-hardening — is ultimately spent for those purposes," he said.

    MPSC wants to study Lansing's turnaround on outage durations

    Among the things Scripps hopes to see in the upcoming third-party audit is an examination of what the Lansing Board of Water and Light is doing that DTE and Consumers Energy are not.

    "Their performance numbers are significantly better than what we're seeing from the two major investor-owned utilities (DTE and Consumers)," he said.

    Lansing is the third-largest power provider in the state, with more than 100,000 electric customers in the city and surrounding townships. Its improvements on power outages started after it fumbled on a major one.

    "We had a storm in 2013 and we failed miserably at it," current Lansing Board of Water and Light general manager Dick Peffley said.

    More than a third of the utility's power customers were without power in the dead of winter amid a major ice storm, and power wasn't restored to many of them for more than 10 days.

    A community review team later found crucial failures in communication by the utility, in its outage alert systems, and in its neglect of vegetation management and distribution infrastructure. Board commissioners fired then-general manager J. Peter Lark in January 2015 for "just cause" in failing to fulfill his obligations. Peffley came over from the utility's water side to become general manager.

    "We made a commitment to do better, and we knew how to do better," he said.

    'Five years of hell'

    The work included major tree-trimming across the entirety of the service area. The utility's five-year plan took six years, but the work got done.

    "Prior to this storm 10 years ago, we had three crews on board" for tree-trimming, Peffley said. "Now we contract with 33 crews, and they have been on board ever since."

    The crews were trimming 30 years of tree growth in some places, he said.

    "There was a lot of outrage," he said. "It was not a popularity contest; it was five years of hell."

    The crews replaced trees that required removal — "something 7 or 8 feet tall that's appropriate to be under a power line. Something that doesn't have to be trimmed. There are no branches above the lines on our streets."

    All residential meters were replaced with smart meters. Overdue power pole, line and other system improvements were implemented.

    The utility is in the midst of its second cycle of tree-trimming, less dramatic this time because of fewer years of growth in between, Peffley said. "We've promised the customers we won't get behind again," he said.

    The results have been eye-opening.

    "Our reliability, if you looked up the numbers back then, we were terrible, probably 300, 400 minutes (outage duration per year) he said. "We are best in class now, a little over 50 minutes restoration time."

    Expecting the worst category of severe storm as February's ice storm moved toward Lansing, the board brought in contracted out-of-state recovery crews in preparation and put them up in local hotels. But they weren't needed.

    "We didn't have a single primary line, the lines that run down your streets, that failed. Not one," Peffley said. "And there was a lot of ice hanging on some of them.

    "The few customers we had out were where the service line went from our pole on the street to their house. Our in-house people put up the few wires that came down, and we released those (contracted, out-of-state) crews to go help restore power elsewhere."

    It's not like the ice storm dodged Lansing, Peffley said. "We had outages east and west of us."

    From 2014 to 2023, the Lansing Board of Water and Light's residential per-kilowatt-hour rate increased only a little over 8%. Commissioners last September approved the first electricity rate hike since 2020.

    "Now we don't have to put money into storm repairs, we put it into the tree budget," Peffley said. "We've cut our storm budget by probably 70%.

    "We don't want a storm, but we don't fear them anymore."

    Critics: Make DTE, Consumers perform for their funding

    Lauer said he apologizes to DTE customers who were without power for days. He added he wanted to "let them know that we are actively involved in a distribution strategy to harden the grid."

    "We have been a fierce advocate of accelerating that investment, and we will continue to advocate to accelerate that investment."

    Consumers Energy officials said they are actively pursuing federal funding through the Infrastructure Investment and Jobs Act, as well as circuit improvements and additional vegetation management efforts.

    But as evidenced by long blackout after long blackout over the past few years, the changes the utilities have been implementing aren't effective enough, Bandyk said.

    "We just need a new model of regulation of DTE and Consumers where they have incentives to perform better for their residential customers and real penalties if they don't," she said. "Where they can make money if they perform well, if they can reduce the average length of these power outages, but there are real penalties if they are giving us subpar services.

    "That gives them an incentive to spend more time and resources on getting the distribution grid to work well, rather than just building more stuff."

    Contact Keith Matheny:

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