Beginning in 2026, the Michigan Public Service Commission (MPSC) plans to implement financial penalties for DTE Energy and Consumers Energy if the companies fail to meet specific reliability metrics. This plan includes $10 million aimed at incentivizing improvements, targeting goals such as reducing outage length and limiting the number of customers who experience multiple outages annually.
Recent statistics underline the severity of the problem. Michigan has scored the second-highest number of power outages across the United States for incidents affecting at least 50,000 residents between 2000 and 2021. Particularly alarming is the reported 78% increase in power outages from 2011 to 2021 compared to the previous decade.
MPSC Chair Matt Helms stated the incentives would focus on a “relatively small number of performance metrics closely tied to the most acute pain points.” He believes this strategy will propel the necessary progress already underway to improve both distribution and reliability.
Ratepayer advocates, meanwhile, are expressing skepticism over the effectiveness of the $10 million financial plan. Amy Bandyk, the executive director of the Citizens Utility Board of Michigan, articulated concerns, stating, “$10 million is insufficient to compel the companies to improve their reliability, especially when compared to their corporate earnings.” She highlighted DTE’s net income for 2024, which was $1.41 billion, alongside Consumer’s parent company CMS Energy, which had profits of $947 million. Bandyk cautioned against offering incentives for what she considers subpar performance. According to her, utilities could merely manage marginal improvements maintaining their current unreliable status without facing any noteworthy penalties.
The MPSC's reliability metrics focus on the System Average Interruption Duration Index (SAIDI), which indicates the average time customers are without power, excluding major events. DTE and Consumers had SAIDI baselines set at 141 minutes and 180 minutes, respectively. Under the new framework, utilities would only need to implement a 5% reduction to avoid triggering penalties. Bandyk's analysis shows this reduction would not align with industry standards, as such figures still exceed the national average SAIDI of 119.1 minutes.
Adding to the concerns, Bandyk pointed out the MPSC's method seemingly double-counts outages on non-major event days, which might lessen the pressure on utilities to rectify core issues leading to frequent outages. “Conditions leading to outages on major event days are when most of the issues occur, and ignoring them undermines real reliability,” she stressed.
Energy consultant Jackson Koeppel shared similar sentiments, referring to the proposed financial setup as “couch cushion money” for the utilities. He has advocated for more significant relief measures for affected customers, such as automatic, hourly credits to those who experience power outages. Koeppel noted the significant burdens faced by customers particularly vulnerable to interruptions, advocating for additional credits and support for those with climate or health dependencies.
Utility companies have stepped forward to welcome the MPSC’s order, framing it as beneficial for their continued efforts to bolster reliability. DTE Energy asserted their commitment to reducing outages by 30% and cutting outage duration by half by 2029. Similarly, Consumers Energy expressed optimism, stating, “We believe this new approach will reinforce our Reliability Roadmap, which is already making Michigan’s electric grid more reliable.”
Attorney General Dana Nessel also weighed in, acknowledging the proposals the MPSC adopted, which her office advocated. She cautioned, though, stating, “More work is needed to force meaningful improvements and responsibility from Consumers Energy and DTE.” Nessel reinforced her intention to pursue additional energy consumer protections and maintain high accountability for both utilities, asserting, “Michigan ratepayers deserve the kind of top-tier reliability for which they have been paying but not receiving.”
The stakes for customers are underscored by recent cost increases. Michigan regulators recently approved a $217 million increase in electric rates for DTE Energy, which translates to an uptick of about $4.61 monthly for the average customer. Highlights of utility expenses, which include executive perks and lobbying, have raised eyebrows, primarily when substantiated by recent reports concerning the motivations behind such rate hikes. Advocates argue these costs mean higher prices for consumers without visible improvements to service.
Current discussions surrounding DTE Energy's proposed $456.4 million rate increase are coming under scrutiny as well, especially amid accusations of potential conflicts of interest wherein supporting comments from businesses might have been drafted by the utility itself. Questions are being raised about transparency and the justification behind these consumer cost increases.
With increasing public scrutiny and advocacy from consumers for equitable service, the path forward for energy utilities like DTE and Consumers will heavily rely on meeting the expectations set by both regulators and the public they serve. The urgency for tangible improvement within Michigan’s electric grid is clear, with stakeholders unified by the need for transparency and reliability as the state continues to grapple with persistent outages.