Three Things Thursday: March 9, 2023
Dear Michigan LCV Family,
Welcome to the March 9, 2023 edition of Three Things Thursday!
Last week, I focused on the recent power outages that hit southern lower Michigan, leaving more than 763,014 homes and businesses in the dark. Unfortunately, widespread power challenges have become a pattern for Michiganders, but this latest round inspired a visceral anger that I am convinced will translate into real change. On the tails of recent summer storms that resulted in unimaginable flooding, the February/March power outages hit an even broader swath of people, resulting in burst pipes, flooded basements, refrigerators full of spoiled food and medicine, and threats to human health and safety for those dependent upon electrically charged medical devices. It’s been a wake-up call for hundreds of thousands of residents and for the elected officials who represent them.
This week’s Three Things takes a deeper dive into what’s going on in the utility world. I’ll cover (1) the influence of Michigan’s corporate utilities in Lansing; (2) DTE Energy’s latest request for yet another rate increase and the role of the Michigan Public Service Commission; and (3) what might be possible in the Lansing legislature.
1. The Political Influence of Michigan’s Corporate Utilities: Who is Governing Whom?
To understand the current state of play around energy in Michigan, we must start by looking at the political influence wielded by Michigan’s two big utilities. Over the past decades, DTE Energy and Consumers Energy have methodically and strategically distributed large contributions to lawmakers on both sides of the aisle and plowed indeterminable sums of “dark money” into shaping the debate and decision-making in our state capital.
As I discussed in the January 12, 2023 edition of Three Things, Planet Detroit reported that DTE Energy funneled hundreds of thousands of dollars in “dark money” to campaigns opposing Gov. Gretchen Whitmer’s pandemic policies, policies that included mandates to end utility shut-offs for customers who were in arrears on their bills. This is mind-boggling because on the surface, DTE was an active corporate partner with the Governor and her team in the emergency response to COVID 19 and they received hundreds of millions in COVID relief dollars from the federal government. Yet behind the scenes, the utility was actively funneling “dark money” to create larger profit margins and actually stymie public health measures, which included the shocking practice of shutting off service to tens of thousands of customers.
This “dark money” political influence, alongside the seemingly endless flow of direct contributions to lawmakers, is why holding our utilities accountable for their actions (i.e. abysmal service and high rates) is so essential, but also very hard. You see, decision-makers – all of whom fundraise year-round given the lack of campaign finance reform in our state/nation – are often greatly influenced by these gifts.
This is where I get to say, “thank goodness for Attorney General Dana Nessel!” True to her word, AG Nessel came out of the 2023 gates swinging. In late February, the AG went to the Michigan Public Service Commission with a strong request for increased transparency around the utilities’ lobbying efforts.
Utilities are government-created monopolies regulated by the state. Accordingly, customers of these monopolies should have the right to know whether and how much their utility is spending to influence legislation or other public policy that impacts the utility and consumers.” – Attorney General Dana Nessel via MIRS
Using the power of her office, AG Nessel is now looking at ways to track a number of utility activities, including lobbying expenses, contributions to 501(c)(3) and 501(c)(4) entities made by nonprofits connected to the utilities, funds spent on attorneys in an effort to overturn rules or laws, and funds spent on MPSC rate cases.
MIRS published an article earlier this week entitled “AG Wants Utilities Held Accountable,” which captured the AG’s recent visit with the legislature. Here are some key excerpts:
Attorney General Dana Nessel this morning implored legislators to work with her on legislation that would force greater transparency and better service from Michigan electric and gas utility providers in the shadow of nearly 750,000 ice storm-caused power outages that haven’t been fully fixed nearly two weeks later.
“Just as all of you sitting here are, I am exasperated at this point by the utilities …We have worked tirelessly to challenge them to do their very best, but of course all we can do is file these interventions, we file these pleadings, we fight as hard as we can for as much transparency.”
The Attorney General said she has lots of ideas about how the legislature could enact changes in state law to get Michigan residents more reliable and more affordable service, including how utilities spend their resources.
“Look, I think it’s great that they’re providing these backpacks for kids. But you know what would be better than that? Just good service at a reasonable cost.”
She also implored the lawmakers, despite the fact that utilities are significant campaign contributors, to have courage in tackling the issue.
“So, I know it’s hard, but I hope that we can all come together and understand that ‘yes, they’re the 800-pound gorilla in the room that can bury us if we’re too aggressive in holding them accountable… But, at the end of the day, isn’t that why we all ran for office… so that we could provide good services to our constituents?”
Please know that Michigan LCV has been running a robust utility accountability campaign for the past few years, collaborating with community-based organizations like the Defend Black Voters Coalition, Michigan United, Community Change Action, Mothering Justice, Detroit Action and Planet Detroit to ensure that people clearly understand that Michiganders pay some of the highest rates in the region while getting some of the worst service. This work continues and now expands to include the undue and unwelcome utility influence in Lansing.
2. Utilities Seeking Rate Increases; Adding Insult to Injury
Astoundingly, as Michiganders have experienced increasingly frequent, prolonged power outages, the utilities have consistently sought to raise energy rates without meaningful improvements to service.
After the Michigan Public Service Commission (MPSC) approved just 10% of DTE’s $300 million rate increase request last year, the state’s largest utility went back to the MPSC early in 2023 with yet another request. This year’s request –if approved — would be the largest single rate increase in Michigan’s history, totaling $622 million.
What makes the situation even more surreal is the fact that DTE made a record $1.1 billion in profits last year.
In the coming weeks and months, the MPSC will be making a decision on DTE’s latest request. As part of the process and in response to the recent power outages, the MPSC will be holding in-person town halls in areas hard hit by the ice storm:
- Monday, March 20 from 12 to 2:30 p.m. at the American 1 Credit Union Event Center, 128 W. Ganson St, Jackson
- Monday, March 20 from 5:30 to 8:00 p.m. at Fordson High School’s auditorium, 13800 Ford Road, Dearborn
You better bet that the Michigan LCV team will be communicating broadly and consistently to our members to urge them to participate. Organizationally, we have already written to the MPSC, urging them to reject DTE’s request outright, and we’ve created a one-click advocacy tool to help people make their voices heard. I invite you to check the tool out, put it to use and share it widely with your networks.
There is simply no reason that DTE should be allowed to further pad the pockets of their shareholders while leaving hundreds of thousands of Michiganders in the dark.
3. Correcting the System: What Might that Look Like?
Michigan’s utilities must be held accountable for poor service and high rates, but what that looks like from a legislative perspective remains to be seen. The AG is doing her work; the MPSC is moving forward as outlined above; the question becomes, “what will the state Legislature do?” Michigan LCV has been leaning in hard in this arena (as you can imagine), making it very clear that we support strong action in the very near term, in addition to the critical work currently underway around the state budget.
In the aftermath of these latest outages, some lawmakers have called for hearings and there are indications that this will happen soon. In fact, just this week Rep. Helena Scott (D-Detroit), chairwoman of the House Energy, Communications and Technology Committee, announced that her committee would be holding a hearing on March 15th and wants to hear from power company leadership and MPSC Chairman Dan Scripps.
We cannot and will not simply accept that this is our new normal,” Scott said. “The power grid and associated infrastructure must be reinforced, updated and improved so that residents are safe, warm and receive the services they pay for.” – Rep. Helena Scott
And, just today, MLive ran an outstanding article entitled, “Ice Storms Reorder Michigan Democrats’ Energy & Climate Agenda,” which frames the Michigan moment and how our state is poised to use momentum around frustrations with reliability and costs to fuel solutions aimed at renewable, clean energy. Here’s a snippet:
Michigan’s new Democratic majority in the state Legislature has a climate and energy-related wish list. No need to check it twice.
Legislative leaders said Gov. Gretchen Whitmer’s climate action plan is a blueprint for the next two years. That means renewable energy initiatives, electric vehicle programs, a faster end to burning coal for energy, home improvement and weatherization investment, and energy affordability measures.
“The ice storm has obviously supercharged the conversation in terms of especially energy provision and utility regulation in Michigan,” said state Sen. Sean McCann, D-Kalamazoo, chairperson of the Michigan Senate’s Energy and Environment Committee.
McCann said he expects legislation on energy issues beyond grid reliability to come to the forefront after the coming spring break in the session – issues he said “haven’t been doable for 40 years” under Republican control of the Legislature.
State utility regulators in October ordered a first-of-its-kind systemwide audit of the state’s electric distribution systems and operations of the two largest utilities, Consumers Energy and DTE Energy.
The Michigan Public Service Commission is also expected in coming weeks to unveil its new website that will serve as a clearinghouse of data about [the] power grid’s reliability, power outages, and storm response.
Michigan Rep. Helena Scott, D-Detroit, chairperson of the House’s Energy, Communications, and Technology Committee, said it’s critical to hold utilities accountable for these long-duration power outages and it’s time for companies to upgrade their infrastructure.
“We’re tired of hearing about the trees,” Scott said. “We need to have underground infrastructure so that when weather conditions happen, we do not have severe power outages. I’m sure that would be more reliable, and we wouldn’t have these situations as far as these massive power outages.”
She also said her constituents want to see an end to monopoly control by underperforming power providers: “We need to have alternatives. I know that’s what the residents want. And that’s what we’re going to strive for.”
Both McCann and Scott agreed Whitmer’s climate action plan that calls for Michigan to become carbon-neutral by 2050 will be a guidebook for the energy-related legislative agenda.
In terms of legislative action already underway, just this week Senator Jeff Irwin (D-Ann Arbor) and Senator Ed McBroom (R-Vulcan) introduced a pair of bills (SB 152 and SB 153) that would allow utility customers to subscribe to community solar projects, which will lead to cost savings and improve the state’s electric grid. Basically, these bills would allow both residents and businesses to become part of a local solar project and, in so doing, receive credit on their utility bills through what is called “distributed generation” of solar energy.
These two bills get to the heart of a big problem facing the propagation of clean energy in our beloved state: Michigan’s corporate utilities have been allowed to cap the distributed generation of solar energy (credits for homeowners and businesses who put energy from solar arrays back into the grid) at 1% of a “utility’s annual average peak load.” While Consumers agreed last year to raise their cap to 4%, DTE has not followed suit, yet the company says it will hit the cap by July 1, 2023.
Michigan LCV’s Deputy Director Bob Allison recently did a great job explaining this situation in a recent Detroit News article: Here is an excerpt:
Bob Allison, deputy director of the Michigan League of Conservation Voters, said DTE’s current distributed generation payments are paltry considering customers, not DTE, pay for the rooftop solar panels, and the energy those panels create is used by their neighbors so it doesn’t require long-distance transmission.
“We want to see the cap gone,” Allison said. “We want a fair system for reimbursing people and businesses for their excess energy. Right now, even under this program, people are not paid what the fair market value is.
“(DTE is) paying people more of a wholesale rate, while then charging the neighbor next door the full retail rate.”
Given the rash of intense summer and winter storms, combined with the need to fully implement the Governor’s MI Healthy Climate Plan, it is clear that DTE and Consumers Energy must be forced to change, in addition to making large-scale investments in their energy infrastructure and the energy grid to improve reliability. We are way past tree trimming and small-scale improvements in attempts to solve the problem.
The good news is that the Legislature is truly beginning to understand the challenges before us given the tremendous impact to residents and businesses in their districts. Michigan LCV’s team has been emphasizing that our priorities are, indeed, their priorities because clean energy and dependable infrastructure are “kitchen table issues.” Investment in our energy grid is key to Michigan’s ability to accelerate the transition to clean, renewable energy sources, which will help bring down the cost of energy. Clean energy sources – such as solar and wind – are far cheaper than the fossil fuels we currently rely on, and are, of course, key to our much-needed actions to address the climate crisis. And, bringing the supply chain for clean energy technology to Michigan is about jobs and the economy.
Decreased energy costs, job creation, and money back in Michiganders’ pockets What’s more “kitchen table” than that?!
That’s it for now. I hope this edition of Three Things Thursday has been helpful to painting a fuller, clearer picture of the clean energy challenges and opportunities before us. We have much work before us, but I am convinced that together we will evolve our beautiful state into one of the most robust clean energy states in the nation, with reliable energy transmission at the core.
As always, thank you for all you do to support our work. Until next week….