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MI-MAUI Opposes DTE’s Cash-payment Requirement

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In 2023, DTE required almost 50,000 of its electric customers to pay their monthly bills in cash. The Company imposes this requirement on customers who bounce checks or have other forms of payment declined.

Local governments are concerned with this practice because paying by cash may be inconvenient for elderly, vulnerable and low-income customers, and in many cases it may be unsafe for them to carry large sums of cash to DTE offices and payment agents. MI-MAUI agrees that DTE should do what it reasonably can to limit losses from uncollectible accounts, which DTE can recover by raising rates on other customers; but doubts that making it harder for customers to pay their bills will result in improved collections.

In DTE Electric rate case U-21534, currently pending before the MPSC, MI-MAUI has argued that this practice is not allowed under the MPSC’s billing rules for utilities and should either be abolished or strictly limited. See https://www.mlive.com/environment/2024/08/12-months-of-inconvenience-dte-forces-thousands-to-pay-power-bills-only-in-cash.html.

MI-MAUI Files Comments to MPSC on Performance-Based Financial Incentives and Disincentives for Utilities

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In MPSC case no. U-21400, the Commission sought comments on the subject of financial incentives and disincentives for utilities based on their attainment of statutory service quality standards. MPSC staff proposed that utilities should be eligible to recieve incentive bonuses for improving their performance, even if they remain below standards according to some or all measures. Several MI-MAUI members provided comments about this proposal, which MI-MAUI filed along with the following cover letter responding directly to Commission questions.

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2023 DTE Electric rate case outcomes: MI-MAUI saves city operating budgets millions, plus wins for reliability and accountability

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On December 1, 2023, the Michigan Public Service Commission (“the Commission”) filed its Order in the latest DTE Electric Company (“DTE” or “the Company”) rate case.

In addition to our assistance along with many other intervenors in holding down the rate of return on equity to current levels, MI-MAUI advocated on some issues that turned into big wins:

  • The Commission adopted reductions to historic streetlight costs and disallowances in streetlight spending totaling nearly $7M, including a $5.8M reduction in rate base because the Commission agreed DTE has been installing too expensive and bright a model of LED streetlights. MI-MAUI showed that DTE has not been following supplier instructions for matching output of new LED lights to the older lights being replaced, and DTE offered no other evidence supporting its conversion methods. The LEDs DTE has been installing cost more to buy and install, use more electricity and exceed roadway lighting standards for luminance.
  • The Commission cut DTE’s proposed costs for streetlight maintenance and staffing: DTE plans to stop re-lamping burned-out HID streetlights in favor of converting them to LEDs, but wanted to keep charging customers $167,000 per year for re-lamping costs. DTE also wanted to charge customers $374,000 per year for LED washing costs which the Commission previously found were unnecessary. Finally, the Commission disallowed over $1.3 million in increased staffing for the street lighting group which MI-MAUI opposed on grounds that overall maintenance and operations activities are decreasing, not growing. These cuts will save streetlight customers over $1.8 million per year in total. It should be noted that none of these reductions should impact outage frequencies or durations: MI-MAUI strongly supported other actions proven to reduce and identify outages and restore service quickly. For example, MI-MAUI supported more-frequent “Night Patrols” by DTE teams to identify outages before they are reported by the public.
  • Streetlight customers will no longer be charged for electricity when the lights are not working: the Commission agreed the streetlighting sales forecast should be reduced to reflect known outages, reducing electricity costs built into the tariffs by over 3%.
  • In total, local governments will save nearly $4M/yr on streetlighting costs thanks to MI-MAUI’s work on this case. These reductions average out to almost $23/year/light. Savings will be higher for LED lights and lower for older lighting technologies.
  • DTE will now be required to inform all streetlighting customers of outages (which they have strongly resisted, even after coughing up data showing 20% of Washtenaw County’s lights were out when they checked last year).
  • DTE will have to improve its coordination with local governments on infrastructure (especially underground work). Supported by detailed testimony provided by the City of Ann Arbor, MI-MAUI showed that DTE’s failure to coordinate its underground work with local government projects causes avoidable costs and disruptions to neighborhoods and roadway users.

MI-MAUI anticipates that DTE will attempt to restore some of these charges in its next rate filing, requiring continued vigilance to protect these gains.

Utilities’ COVID-related Windfall Revenue Should be Refunded Directly to Ratepayers

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Energy utilities in Michigan reaped increased earnings during the COVID-19 pandemic because their customers are using more energy at home than usual. Increased revenue from residential customers has more than offset commercial and industrial revenue reductions because residential rates are higher than commercial and industrial rates. DTE Energy estimated it would realize $30 million in gross margin attributed to changes in energy usage patterns related to COVID-19 in 2020.  Consumers Energy earned $28 million more than expected ($16 million electric and $12 million gas). Both utilities committed to voluntary refunds of these windfall earnings.

At the same time as household energy use and costs increased, many residential customers struggled to pay their bills owing to increased unemployment and other COVID-related impacts. Ratepayer relief is badly needed.

This brief argues that windfall COVID-related revenues that utilities have realized, and continue to realize, should be refunded as promptly and directly as feasible to residential customers, targeting the support to those most impacted by the COVID crisis. Both emergency assistance and rate relief could be targeted to those most in need, relatively quickly. In contrast, both DTE and Consumers have proposed to apply their windfall earning to system improvements, rather than returning the money directly to ratepayers.

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