Attorney general files comments with at MPSC about Consumers Energy spending plan

This month, Michigan Attorney General Dana Nessel filed comments with the Michigan Public Service Commission (MPSC) on Consumers Energy Company’s 5-year distribution plan. The Commission required Indiana Michigan Power Company, Consumers Energy Company, and DTE Electric Company to file their 5-year distribution plans last fall and set separate 2024 deadlines for interested parties to file comments regarding the plans. The Attorney General filed comment February 16th, arguing Consumers Energy failed to articulate the degree of customer burden for their spending, does not focus enough on reliability improvements, and includes no accountability measures should they fail in their commitments.

The distribution plan details the company’s 5-year investment plans for their electric distribution grid. Consumers Energy forecast therein spending $7 billion over that time to address electric reliability as well as other upgrades to the electric grid to address future increased electrification.

“I applaud the Commission for ordering the 5-year distribution plans, but we need to see these corporations address their essential functions of affordability, reliability, and accountability,” said Nessel. “Consumers Energy needs to refile a distribution plan that manages to address these critical customer concerns. Michigan residents and ratepayers deserve reliable and affordable electricity from their utility, and we’d like to see them plan to deliver it.”
Nessel raised three major concerns to the MPSC. First, there is little to no discussion on what the impact of this $7 billion investment would be on customers’ utility bills. An internal review by the Department of Attorney General indicates that this $7 billion investment, combined with increasing expenses, translates to a cost per customer of approximately $4,600 over those 5 years. That is a significant increase for customers and part of the distribution plan should address those increases to customer bills and cost alternatives.

To justify this level of expenditure, the distribution plan must make a compelling case that the spending is critically necessary and targeted to those areas that will provide the most benefit to customers. Consumers Energy’s plan, however, fails to provide such analysis. For example, Consumers Energy articulates intentions to improve the number of minutes that customers are without power following an event using a reliability metric called System Average Interruption Duration Index or SAIDI. The utility company’s plan explains that this new spending level on electric reliability will decrease these outage minutes by 13 minutes compared to existing spending levels. This amounts to only a 9% improvement in this metric compared to the proposed 75% increase in capital spending to reach the goal. Not only is this amount of spending for such a marginal outage duration improvement a poor deal for customers, but there also are several other reliability metrics that must be improved, such as the number and frequency of annual customer outages.

There is additionally no accountability set forth in the plan should Consumers Energy fail to achieve their reliability goal. Customers deserve a refund of the investment or some type of penalty if Consumers Energy spends $7 billion and fails to achieve this 13-minute goal, the comment from the Attorney General concludes.

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