In May, the Michigan Public Service Commission approved more than $273million in rate hikes for DTE Energy, representing an 8.69% increase foraverage residential customers.
Within two months, DTE had filed another request with the commission to raise rates even higher for 2020.
If you feel like you've been here before, you have.From 2015 to this year, DTE Electric Co. has received $775 million in four rate increases— the second-biggest total rate hikes in the country.
It's happening as the utility has come under fire for the frequency, and duration, of blackouts on its system, including power outages to 600,000 customers following strong thunderstorms passing through southern Michigan on July 20, which left some without power for up to five days. Data shows DTE hadmore average minutes of power outage per customer, and longer waits to restore power, than any other electric utility in Michigan in 2017.
DTE's rapid return to the MPSC seeking higher rates has raised the ire of state Attorney General Dana Nessel.
“Months after it received a rate increase from MPSC, DTE shows it is completely unconcerned about the savings accounts of its consumers," she said in a recent news release.
"Today I’m putting them on notice: I plan to vigorously review all their filings and make certain the priority in this case is ensuring affordable energy for Michigan consumers, not dividends for their shareholders.”
Only Florida Power & Light Co. received more in rate hikes from 2015 to this year, but that utilityhas more than double the customer accounts— 5 million to DTE's 2.2 million.
"This is DTE'sbusiness, and they are good at it," said Traverse City-based environmental attorney Christopher Bzdok, who represents three nonprofit environmental groups intervening in DTE's latest rate-hike proposal.
"Working the regulatory process is something they have a lot of experience doing— they spend a lot of money doing it; and they have it down to a science."
DTE officials said the rate hikes have been necessary to improve its electrical distribution system, including a massive surge in tree-trimming across its network, as well as costs associated with transitioning away from older, coal-fired power plants to natural gas facilities.
"We need to continue to harden the system so that it's more resilient for our customers," said Trevor Lauer, president and chief operating officer of DTE Electric.
"It really comes down to investing in our electric grid and investing in green energy. We have a very large system; approximately 36,000 miles of infrastructure that we need to address."
As a state-regulated utility, the Public Service Commission must approve DTE's rate increases. The agency typically reduces DTE's requests, but the hikes are still significant.:
- $243 million in 2015.
- $184 million in 2017.
- $74 million in 2018.
- $273.3 million in 2019.
"Despite these 9-figure rate increases, DTE has some of the worst reliability metrics in Michigan," said Bryan Brandenburg, an attorney for the Association of Businesses Advocating Tariff Equity.
ABATE isa coalition of businesses that are among the largest electricity and natural gas users in the state, including General Motors, Fiat Chrysler Automobiles, AK Steel and Dow Chemical. ABATE frequently intervenes in DTE's rate hike requests.
Brandenburg cited data from the Citizens Utility Board of Michigan, a nonprofit organization representing residential electric customers' interests, showing DTE in 2017 hadmore average minutes of power outage per Michigan customerthan any other utility in the stateat over 1,000 minutes—almost three-quarters of a day in the dark per customer on average. Thatnumber was heavily influenced by a major power outage across much of the state in March 2017 after sustained winds of more than 65 mph.
DTE's average minutes to restore a power outage was also worst in the state in 2017, at 765 minutes. Consumers Energy, the state's second-largest electric utility, was second at 462 minutes.
"The study is taking data from 2017, a year when hurricane-force winds caused the most damaging wind storm in a century and the worst in our company’s history," DTE spokeswoman Randi Berris said. "It creates an inaccurate data point. The (Citizens Utility Board)report itself states 'excluding major event days, Michigan is actually slightly above average.'"
But that's not all the CUB report says.
"Looking only at the number of outages per customer (not taking into account how long those outages last) and still excluding major event days, Michigan is actually slightly above average," the report states. "However, even with fewer outages, Michigan customers still spend more time in the dark than customers in most states, suggesting that Michigan utilities are particularly bad at restoring power once there is an outage."
More on DTE Energy:
DTE customers eligible for $25 credit only if power went out for 5 days
DTE speeds move to renewable energy: What it means for customers
New DTE wind farm is largest in Michigan with 65 turbines
More accountability should be required of the utility, saidAmy Bandyk, executive director of the Citizens Utility Board.
"One important reason DTE wants to raise rates is to spend more on the distribution system, but they don’t provide any commitments to ensure that these investments actually improve reliability or reduce outage duration," she said. "That spending must be kept accountable through performance-based metrics that DTE should be required to meet."
DTE seeks $351 million in new rate hikes as early as May 2020, projecting an increase of up to $9.84 per month in a typical residential customer's bill. A rate case before the MPSC can take nearly a year to decide.
Bandyk also criticized the continuing trend of residential customers receiving greater percentage increases than industries or large businesses. DTE's new rate hike proposesraising residential rates by 9.1%, small business rates by 7.3%, and large customer rates by 2.9%.
"This just exacerbates their already-lopsided rates," she said.
Lauer said the utility is following state laws to "reset rates in terms of residential and industrial customers."
"Historically, the largest customers subsidized the residential customers," he said. "After these laws passed, customers must be served at their true cost of service. We had to file rate plans with MPSC to de-skew rates."
Bzdok noted that DTE's rate hike planalso includes a requestedincrease in their return on equity,their authorized profit margin allowed by regulators, from the 10% approved in May to 10.5%.
"It’s not just, 'We’ve got to buy some new wires and install them to keep the lights on,'" he said. "It is that, but then it’s also, 'We want to increase the profit for every wire we install, every piece of equipment we put in a new power plant.'"
Contact Keith Matheny: (313) 222-5021 or kmatheny@freepress.com. Follow on Twitter @keithmatheny.
