Attorney general proposes reliability mechanism to help curtail electric outages

Michigan Attorney General Dana Nessel filed comments last Friday in Michigan Public Service Commission (MPSC) docket U-21400, proposing the adoption of an electric reliability mechanism to help reduce the frequency and duration of power outages in the state.   

In April of 2023, the MPSC opened Case No. U-21400, directing Commission staff to convene a workgroup to explore the use of financial incentives and penalties to address increasing outages. The move came in response to increased ratepayer complaints, as Michigan’s two largest utilities, DTE and Consumers, have consistently ranked in the last quartile for electric reliability over the last decade. The goal is to use the incentives and penalties to induce utilities to improve their systems in ways that bring quantifiable improvements for customers.   

In an August update, the commission put forward a “straw proposal” mechanism and solicited comments from interested parties. The Department of Attorney General reviewed the proposal and in last Friday’s filing provided feedback, along with her own proposed mechanism.

The mechanism developed by the attorney general and her experts is named the “Service Improvement Incentive Mechanism” (SIIM). It is a relatively detailed proposal that is designed to be straightforward, implemented quickly, and built upon and improved as more data is collected. The attorney general has also presented the SIIM in DTE’s and Consumers’ most recent electric rate cases and recommends that the Commission adopt all or parts of it either in this docket or through the rate case dockets.

"Service reliability should be a foundational function of our utilities, but the data and experiences of Michigan residents show we must have stronger oversight mechanisms to focus these businesses on their responsibility for reliability,” said Nessel. “We’ve invested an incredible amount of time, alongside our experts, in developing the Service Improvement Incentive Mechanism and it’s time the MPSC adopt it into practice. Utility customers in Michigan deserve to know their utility corporations are working toward reliable service, and every indication says that will require government and regulatory accountability.”