Michigan Commission Report Highlights a Year of Tackling Reliability, Affordability

The recently released Michigan Public Service Commission’s 2021 Annual Report highlights how energy affordability and reliability remained key priorities as Michigan dealt with continuing challenges posed by the COVID-19 pandemic and significant power outages from increasingly severe weather fueled by climate change.

To address the issue of affordability, the MPSC in Feb. 2021 launched an Energy Affordability and Accessibility Collaborative (EAAC), whose ongoing work with stakeholders from a broad range of groups is focused on addressing energy affordability, protections for utility customers, and access to energy assistance and energy waste reduction services for low-income households — issues brought to the forefront in 2020 amid the economic disruption of the pandemic.

MPSC Staff filed an interim report on its ongoing work in December, highlighting accomplishments, among them launching a public database with data updated monthly on utility customer shutoffs and arrearages and creating an energy assistance outreach toolkit that includes brochures, postcards, example letters, example social media messages, and video message files translated into multiple languages. The MPSC distributed the toolkit in December to advocacy groups and other stakeholders to help spread awareness of energy assistance programs.

Among the major areas of the EAAC’s focus are defining affordability and how it intersects with ratemaking, strategies for streamlining energy assistance, and recommendations for tying energy waste reduction to energy assistance.

To tackle the issue of reliability, the MPSC in August launched an inquest into utility response to power outages after a series of summer storms, with wind gusts exceeding 70 mph leading to widespread outages that left more than a million Michiganders without electricity, some for more than a week. Several communities experienced repeated outages, compounding the impact.

The Commission directed utilities to file reports detailing their vegetation management and grid hardening efforts; detailed information on ZIP codes with the most and least frequent outages, plans for addressing customer bill credits; restoration efforts, and the costs and benefits of moving existing electric lines underground. The Commission held a two-part Technical Conference on Emergency Preparedness, Distribution Reliability, and Storm Response. The Commission also approved an application by DTE Electric Co. to spend a one-time $90 million voluntary refund on tree trimming, directing the company to prioritize vegetation management on the utility’s worst-performing circuits.

Work accelerated outside the topics of affordability and reliability as well. The MPSC managed more than 17,000 filings and comments to its electronic dockets system in 2021, and the Commission issued 459 orders and minute actions. The MPSC handled five utility rate cases in 2021, issuing final orders in electric rate cases involving Alpena Power Co. and Consumers Energy Co., gas rate cases involving Michigan Gas Utilities Corp. and DTE Gas Co., and a steam rate case involving Detroit Thermal LLC. In all, the Commission authorized $121.1 million in rate increases in 2021, lower than the US$ 436.7 million utilities requested. Investments to improve reliability and upgrade aging infrastructure were the primary drivers of rate increases.

In the MPSC’s MI Power Grid initiative, a multiyear initiative launched in 2019 to maximize the transition to clean, distributed energy resources, MPSC Staff filed a two-year status update. The MPSC held more than 30 stakeholder meetings with more than 246 stakeholder organizations resulting in five Staff reports and 17 Commission orders.

Among year two’s accomplishments:

• Updates to competitive bidding guidelines.
• Completion of a Smart Rate Design for Distributed Energy Resources report requested by the Michigan Senate in Senate Resolution 142 of 2020.
• Adoption of a standard definition of “utility pilot program” and creating objective criteria for pilot program review, as well as launching an Online Pilot Directory to increase transparency and information sharing regarding the results and learnings from approved utility pilot programs.
• Initiation of updates to three rulesets: the Service Quality and Reliability Standards for Electric Distribution Systems, the Technical Standards for Electric Service, and the Consumer Standards and Billing Practices for Electric and Natural Gas Service.

Customer assistance remained a high priority for the MPSC. Its Staff:

• Assisted 10,646 customers who contacted the agency’s call center for help with complaints or other issues.
• Awarded US$ 54.5 million in Michigan Energy Assistance Program grants to nine agencies to provide home energy assistance to 57,153 low-income customers.
• Helped ensure more than 75,000 Michigan customers were provided service through Lifeline state and federal broadband and voice discounts. (This number is significantly lower than in previous years, owing to two providers not requesting federal reimbursement. Later reconciliations are expected to show higher than previously reported participation in Lifeline programs).

The MPSC stepped up its diversity, equity and inclusion efforts in 2021. The Commission hired Shatina Jones as the agency’s first Equity and Inclusion Officer, held listening sessions for staff focused on workplace issues, and took other steps to address systemic racism and its impact internally and in the energy and telecommunications industries.

The MPSC continued its engagement with the state’s 12 federally recognized Native American Tribes, efforts that included hosting a two-part forum. The first, part of MI Power Grid, focused on new energy technologies and business models of interest to the Tribes, and the second focused on broadband issues on Tribal lands. MPSC Staff also held three consultations with Tribes related to Enbridge Energy’s application to replace and relocate a segment of Line 5 pipeline beneath the Straits of Mackinac.

After the January 2019 polar vortex and fire at a natural gas compressor station in Macomb County, the MPSC, at Governor Whitmer’s request, launched a Statewide Energy Assessment, which identified recommendations and observations for improvement of electricity and natural gas systems, cyber and physical security, and emergency management. The Commission in September issued a 2021 Progress Report on implementation of the SEA’s recommendations.

Natural gas pipeline safety, a major responsibility of the MPSC, made strides as MPSC Staff conducted 990 inspection days, including inspections of Consumers Energy’s Saginaw Trail Pipeline Phase 4, the last stage in replacement of 94 miles of transmission pipeline in Saginaw, Genesee and Oakland counties. The MPSC authorized and monitored the replacement of about 380 miles of gas distribution lines made of cast iron, bare steel, or other at-risk materials, along with replacement of about 25,000 residential gas meters.

The MPSC’s work on cybersecurity continued in 2021. In December 2020, MPSC Staff submitted a report on Technical Standards for Electric Service aimed at improving the security of the electric system. The Commission in November initiated a formal rulemaking on Technical Standards for Electric Service and held a public hearing in December. Work is expected to continue through 2022.

Ongoing electric vehicle (EV) pilot programs, first approved by the MPSC in 2018 and 2019, involved Michigan’s three largest utilities and include rebates for residential, commercial, and EV fast charging stations to encourage EV adoption and test technology innovations, rate designs, customer response and other factors. Data gathered from the pilot program will help utilities and the MPSC make informed decisions in the future. In 2021, the MPSC authorized DTE Electric asset accounting treatment for deferred Phase Two program costs related to its Charging Forward EV pilot program, focused on fleet electrification expansion. In addition, the Commission approved Alpena Power Co.’s first EV tariff’s in Case No. U-21045 and an agreement for the utility to work with MPSC Staff to develop and file for approval a pilot program for expanded use of electric vehicle charging stations in a future case.

The MPSC’s work in telecommunications included working with other state departments and partners to facilitate the expansion of broadband in Michigan. The work included the MPSC’s approval of 15 applications for eligible telecommunications carrier designation for providers awarded more than $360 million in funding through the Federal Communications Commission’s Rural Digital Opportunity Fund to provide fixed high-speed internet to rural homes and small businesses in about 250,000 locations across the state over the next decade.

In addition, the MPSC worked diligently to spread the word about the federal Emergency Broadband Benefit (EBB) program, which provided monthly help for low-income households to pay for broadband service. As of Dec. 31, 2021, there were 322,310 Michigan households participating in the program. The EBB concluded at the end of 2021 and has been replaced by the FCC’s Affordable Connectivity Program.

The MPSC also worked in 2021 to help ensure a smooth transition for Michigan telephone customers as the FCC rolled out 988, the new three-digit national phone number for National Suicide Prevention Lifeline. Phone customers in Michigan’s 616, 810, 906, and 989 area codes as of October 2021 must dial 10 digits, including an area code, with every phone call.

In September 2021, the MPSC declined a request from ExteNet Systems, Inc., supported by the Telecommunications Association of Michigan, to reexamine certain rules and regulations in the MPSC’s authority governing pole attachments. The Commission directed MPSC Staff to communicate with the Michigan Office of Administrative Hearings and Rules to ensure pole attachment complaints are resolved within 180 days.

Members of the Commission are Chair Dan Scripps, Commissioner Tremaine Phillips, and Commissioner Katherine Peretick, appointed by Gov. Gretchen Whitmer to join the Commission on Jan. 4, 2021, to fill a vacant term and reappointed to a full six-year term on July 3, 2021. The MPSC’s Staff include approximately 180 people with expertise in engineering, accounting, finance, law, economics, and other fields.