Electric utility regulatory issues put many people to sleep. They can be legally dry and technically complicated. However, for ELPC’s clean energy legal and policy wonks, these issues are often truly interesting, and we dig in deep. Most importantly, what ELPC’s team then accomplishes before the courts, legislatures and public utility regulatory commissions really does make a difference for the public’s interests.
Case in point: Here’s the story behind ELPC’s major new win before the Michigan Public Service Commission in DTE’s utility rate case.
Simple narrative: DTE requested a $351 million rate increase, which the Commission cut by 47 percent, saving consumers nearly $163 million. That’s good.
Larger, more complex story: ELPC attorneys Nikhil Vijaykar and Margrethe Kearney succeeded in gaining changes to DTE’s planning process that should both save consumers even more money going forward and avoid pollution, thereby improving public health and our environment.
DTE runs one of the worst electricity distribution grids in the country. The utility admits that it’s in the bottom quartile for outages. DTE has very poor reliability indicators.
According to DTE, it should have been given its full requested rate increase in order to make grid improvements. But, why reward a utility company, which runs one of the worst distribution grids, with a blank check? And, why penalize consumers by leaving them with a critically outdated grid incapable of handling modern distributed energy resources, community solar energy + battery storage, and electric vehicles?
ELPC had a better solution than DTE’s in order to benefit consumers and the environment.
Utilities typically fund capital improvements by proposing a plan to the Commission, spending the money, and then charging consumers for the project costs plus an annual profit – i.e., the “rate of return.” Too often, the utility gets the money whether or not the project actually does improve service.
Michigan is exploring what’s called “performance-based ratemaking” with the idea that capital improvements should actually improve things. ELPC attorneys presented our legal case that the Michigan Public Service Commission should require that spending approved for DTE should improve current services and also prepare DTE’s outdated grid for the modern clean-energy world.
The Commission “got it” and put some teeth in the requirements for DTE. All Michigan utilities must periodically submit a distribution system plan, and DTE’s next plan must develop, track and report its performance on a set of metrics, as well as its progress towards improvement targets. Instead of just building costlier new substations and transformers, DTE’s distribution system plan must also include “non-wires alternatives projects,” bringing in clean energy resources like solar energy + battery storage, energy efficiency and demand response. Those changes can produce large long-term environmental and economic benefits for DTE ratepayers.
ELPC and our allies are proud that we helped reduce DTE’s rate hike by $163 million, but that’s only part of the story. Margrethe, Nikhil, and our coalition allies helped change the planning standards and utility regulatory culture for the future in ways that can result in even larger savings and bigger benefits. That’s an important ELPC success to share with you.
In other ELPC news this week:
- An article in the Wisconsin State Journal included details of ELPC’s new report on US EPA Region 5 Clean Water Enforcement Declines under the Trump administration. ELPC’s Howard Learner commented that the Trump EPA’s policy to hold back environmental enforcement during the COVID-19 public health crisis “threatens to make a bad situation worse.” ELPC Board member and attorney Bob Graham explained that a lack of regulation puts environmentally responsible businesses at a competitive disadvantage: “I think companies who want to do the right thing want uniform treatment for all consistent with uniform enforcement,” he said. “They want to know whether other similarly situated entities are fulfilling their obligations as well. … You want fairness for all.”
- The La Crosse Tribune in Wisconsin cited ELPC’s Wisconsin Clean Energy Business Supply Chain Report in an editorial calling for the Badger State to develop smart policies that are friendly to both business and the environment, and meet the climate crisis head on.
- A Bloomberg article warned about harms from Ohio reducing funding for the new H2Ohio Fund. Howard Learner pointed to the importance of ELPC’s lawsuit against the U.S. EPA to force Ohio to impose tighter restrictions on polluters under the Clean Water Act in order to alleviate recurring severe toxic algae blooms in Lake Erie: “The U.S. Environmental Protection Agency and state of Ohio need to step up with much more serious enforceable regulatory standards and other measures that will be sufficient to achieve their goal of reducing phosphorus pollution in Lake Erie by 40% by 2025,” Learner said.
Thank you for your engagement and support for ELPC’s effective advocacy in these challenging times. We really are all in this together when it comes to safe clean drinking water and healthier clean air.