DTE safety tips to remember
DTE offers safety reminders we all need to know to stay safe around live wires.
Fox – 2 Detroit
I’ve spent the last two weeks digging through thousands of pages of case filings in the adjudication of DTE Energy’s latest rate increase requests.
Here’s what I’ve learned:
Rate hikes, for the 10th straight year, appear inevitable, but DTE likely won’t get the full amount it says it needs to finance a five-year plan to reduce power outages by 30% and outage times by 50%.
The process of deliberating rate increases is dizzying, impressive and questionable.
The jargon is exasperating.
The amount of effort and brainpower that goes into back-and-forth testimony is awe-inspiring.
The amount of money involved is nauseating.
The public availability of the documentation — aside from the testimony that’s kept confidential — is satisfying, if at times incomprehensible.
The whole experience: Infuriating.
Hundreds of consultants, lawyers and engineers exchange wildly differing financial projections for 10 months at a time to help decide — not whether there should be rate hikes, but just how high the increases should be.
And DTE customers’ rates for either gas or electric service, and sometimes both, have gone up every year, going back to 2015. (There were no increases in the three years before that.)
DTE Energy Co. CEO Jerry Norcia told the Detroit Free Press Editorial Board this spring the company tries to find internal savings: “Before we go and ask our customers for anything, we need to make sure we’ve tightened on our end as much as we can,” Norcia said in April.
For example, in January, the utility offered buyouts to 3,000 employees, along with other cost-cutting measures.
This year, the utility says it needs $456.4 million in electric rate increases to adequately invest in improving service reliability. That’s a 10% rate hike. DTE’s plan is to make the grid “smarter” by installing equipment that can more accurately locate the sources of power outages, and keep power running to more houses while outages are fixed.
DTE is barred from commenting more specifically on active rate cases before the Michigan Public Service Commission, but company spokespeople told me the grid improvement plan involves installing 10,000 smart devices by 2029 that will automate the system for better isolation of outages, quicker restoration and automatic de-energization of downed lines. Widespread equipment upgrades atop poles and substation replacements are also key parts of the plan.
“We have to invest to make sure that everything is as safe as possible,” Norcia said. “It’s almost like this generation is investing for future generations.”
But Attorney General Dana Nessel recommends limiting the rate increase to around 2.5%, raising $139.5 million.
DTE, Nessel’s office says, should stick to vegetation management and tree trimming, “activities proven to be more effective at reducing outages compared to more expensive, capital-intensive options preferred by DTE.”
For gas, DTE is asking for a $266 million increase, another 10% rate hike. Nessel’s office countered with $112 million, or 4%.
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Every year over the last decade, DTE has asked for a significant rate increase, disclosing elaborate expense projections to justify the hike.
Those projections are routinely challenged by the attorney general’s office and other interveners, including various environmental, municipal and customer advocacy groups, the City of Ann Arbor — which has long been exploring starting its own municipal utility operation — and large energy customers like Walmart. In some cases, testimony is filed under seal to keep proprietary or sensitive corporate information confidential.
It’s the job of the Michigan Public Service Commission, which has a staff of about 200 and many other regulatory responsibilities (the commission oversees everything from utility rate increases to authorizing new area codes), to process the various projections and proposals, balance the interests of ratepayers and the state’s energy infrastructure, and approve a number.
“Utilities are going to have to invest in upgrading their distribution systems,” MPSC spokesman Matt Helms said. “They’re clearly having issues with all the severe weather. Commissioners have to balance that need with other issues … The commissioners are especially cognizant right now of all of the challenges that people are going through with inflation … commissioners are very aware of the impact of cost on customers.”
The various parties involved haggle over cost projections in documents that are dense with jargon, largely incomprehensible to anyone other than those paid to read and write them. Here’s a sampling of some of the more comprehensible items:
- DTE says it needs $56.1 million to cover employee health care expenses in 2025. The attorney general’s office says that number should be $52.9 million.
- The company projects uncollectible account expenses of $50.9 million. The attorney general’s office estimates that number at $47 million.
- DTE says the cost of covering injuries and damages will be about $18.4 million in 2025, based on an average of that expense over five years ending in 2022. The attorney general’s projection, incorporating 2023 into the five-year average: $15.6 million.
- DTE leases a share of an aircraft for executive travel, costing the electric company a projected $258,000 and gas company $74,769 for 2025. The attorney general’s office says customers shouldn’t have to cover a dime of that expense.
“These are the kind of expenditures they hope we don’t notice, that drive up ratepayer bills, and offer zero improvement to service or reliability,” said Nessel in a May news release addressing jet travel costs. “This is why we scrutinize these rate hike requests, to look out for the interests of the customers these corporations consistently try to squeeze for more.”
DTE spokesperson Jill Wilmot said the jet expenses cover limited air travel for business-appropriate needs, “including industry association meetings, which provide best practices and information sharing to run best-in-class energy companies, as well as meetings necessary to attract investment dollars into Michigan.”
Sometimes, the parties reach a settlement, and sometimes the commission imposes a new rate on its own. The process must be complete within 10 months of the initial request, Helms said.
What they’re missing: Everyone’s talking about Project 2025
Rewarding bad behavior?
There are 130 public comments filed in the electric rate case, most, if not all, calling for the MPSC to reject any hike to utility rates.
Many point to growing revenues reported by DTE, which pays its stockholders a 3.34% dividend, consistent with standard yields in the utility sector.
DTE’s last quarterly earnings report revealed operating earnings of $296 million, compared with $206 million during the same quarter last year. And some of this grid improvement work is underway.
“There is no logic or justice in enabling them to report larger and larger profits for investors while Michigan residents struggle to pay for this basic utility and often suffer through multiple power outages in a year,” wrote Ryan Ariel of Ann Arbor. “They have had the money for YEARS to improve the grid and have not. Please do not reward this behavior.”
Over the last decade, an increase of zero — or, God forbid, a permanent rate reduction — doesn’t appear to have been an option.
But if they don’t fix it …
DTE has, at times, offered temporary rate cuts to customers when fuel costs declined. In November 2023, DTE announced an electric service rate reduction that would save the average household about $5 a month. But a few months later, the utility asked for an increase that would cost the average household $8 a month.
That’s the 10% electric increase the MPSC is currently considering. Under Nessel’s counter-proposal, the increase would be $2 a month.
That’s far more palatable for customers, but could throw a wrench into DTE’s long-term plan for a smarter, stronger grid — which customers also need.
Michigan saw 157 weather-related power outages affecting more than 50,000 people between 2000 and 2023, second in the nation behind only Texas’ 210, according to a study by Climate Central, a policy-neutral research group.
“If we don’t make these investments, then the system will continue to deteriorate,” Norcia told the editorial board in April.
How far can tree trimming take us?
For Michiganders who have been left with refrigerators full of spoiled food, or worse, medicine, by extended power outages, another rate increase of any kind seems absurd.
On the other hand, addressing the outage problem under increasingly volatile weather conditions will cost money.
Or perhaps — and this is the part that, despite the thousands of pages filed in this rate case, is not particularly clear — DTE Energy, with more precise financial projections and still more belt tightening, could find at least some of that $456 million on its own, without further burdening electric customers, or find ways to improve the system with the resources it has. Or maybe, as Nessel suggests, stick to tree trimming.
Weighing in
A small group of activists gathered outside DTE’s downtown Detroit headquarters last month to speak out against higher energy bills, and call on the Michigan Public Service Commission to hold an in-person public hearing in metro Detroit, to offer locals a chance to share their frustrations more directly.
The lowest increase over the last decade of hikes came in 2022, the last time the commission held a public hearing in Detroit.
That year, the MPSC approved a $30 million electric rate increase, after DTE requested $388 million. In that case, the commission found that DTE couldn’t substantiate projected declines in residential electric use as COVID-19 restrictions eased, resulting in a vast reduction to the amount DTE had requested — not, at least on the surface, because customers had commissioners’ ears.
But there’s something to be said for the impact of looking consumers in the face as they voice opposition to making their bills higher.
The commission can’t say whether or not it will heed the call for an in-town meeting. It, too, is barred from making specific comments on active rate cases.
There are plenty of ways for consumers to have their say. Comments can be left via the commission’s docket webpage, case No. 21534 in the electric case and No. 21291 in the gas case.
The commission hosts bi-monthly meetings in person in Lansing and remotely via Microsoft Teams. The meetings are also livestreamed on YouTube. Comments can be made remotely via Teams, or by email: mpcedockets@michigan.gov. Emailed comments should include the case numbers.
A lot of information, not much clarity
I started this process expecting I’d be able to say something definitive about DTE’s rate request: That with earnings on the upswing, it was outrageous for the utility to ask for more money. Or that DTE’s request was merited, that the level of work the utility wants to do can only be funded with customers’ dollars.
But seeing the level of regulatory scrutiny involved, it’s just not that simple. It remains difficult to view the circumstances as fair to Michiganders, who already facing the effects of inflation, high interest rates, high rents, gas prices and fears of an economic downturn — but who also need reliable electric service.
What I can say is that by the end of this rate case process, it seems no one will be satisfied, and maybe that’s just the way our system of regulation works.
Khalil AlHajal is deputy editorial page editor of the Detroit Free Press. Contact: kalhajal@freepress.com. Submit a letter to the editor at freep.com/letters.