After power outages, Washtenaw County official calls for regulations, lobbying restrictions
Hundreds of thousands of Michiganders lost power in storms last month, some of them for more than week.
Now there are questions — some new, some old — about what utility companies are doing to prevent major outages and whether the state needs new regulations.
On Wednesday night, the Washtenaw County Board of Commissioners unanimously approved a resolution that instructs the county administrator to look into the possibility of creating a county-wide public power utility, and the board’s ability to issue subpoenas for utility executives to testify.
Morning Edition's Doug Tribou spoke with Washtenaw County Commissioner and former state representative Yousef Rabhi about the outages, the response, and changes he'd like to see.
Doug Tribou: Washtenaw County was one of the counties hit hardest during the first ice storm. Did you lose power? And how would you rate the utility's response to the outages across the region?
Yousef Rabhi: I did lose power. I lost power for four full days. I want to thank the line crews that were actually out on the ground doing work they are doing. They were doing the best possible job that they could given the circumstances.
But I would rate the overall response basically a zero out of 10. And it's not just the response. It's the whole systematic underinvestment in our infrastructure and our grid that gets DTE and Consumers Energy zero out of 10 for this.
This was a completely avoidable problem. We need to invest in our electrical grid. DTE and Consumers have the resources to make those investments. The day after over 700,000 customers were without power, [DTE] announced a $1.1 billion profit haul. That's just DTE. Consumers, earlier in the month, announced an $827 million profit haul. That [money] is not going to bury power lines. That is not going to upgrade transformers. That is not going to fix poles and wires to do tree trimming. That is money out of the system.
DT: You were a state legislator until just last year. How influential is the lobbying money that the utilities spend in Lansing?
YR: Having served for six years, I can tell you in no uncertain terms that DTE and Consumers are two of the most influential corporations in Lansing. Full stop.
They put millions of dollars into tearing down candidates [and] building up candidates that they like. They are a heavy hand in Michigan politics today. And they're able to do that because they use our ratepayer money, and they spend it on influencing elections and on controlling the electoral process and the political process.
"DTE and Consumers are two of the most influential corporations in Lansing. Full stop."Washtenaw County Commissioner Yousef Rabhi, who finished six years as a state representative in 2022.
These are supposed to be regulated utilities. These are monopoly utilities that have been granted a monopoly by the state of Michigan, and yet they are still allowed to influence the very people that are supposed to be regulating them. It is a pure fox-guarding-the-henhouse situation and there's no stopping it.
DT: I want to note here that both DTE and Consumers Energy are corporate sponsors of Michigan Radio, and I'll note, for the record, that I am a DTE customer and lost power for about two and a half days in the first storm.
One of the common complaints from customers is the lack of reimbursement after an outage. In this wave of outages, DTE announced automatic credits of $35 for people who lost power for more than 96 hours. As a state representative, you co-sponsored legislation that would have required hourly credits for the length of an outage. What other regulations would you like to see?
YR: I drafted that bill, and the $35 credit is insulting. [For] people that had to throw out medicine that was refrigerated, food that was refrigerated, $35 isn't even going to begin to cover the damages. The $35 is something that DTE is doing out of their own volition. But unfortunately, more often than not, they don't do that kind of stuff.
The bill that I introduced would create an hourly outage credit that increases every hour that your power is out. There is another bill in the package that stipulates that that money has to come out of corporate profits. Because the thing about that $35 we were just talking about, they can rate-base it, meaning they can charge it back to you, to me, and to every other DTE customer out there.
The other piece of the bill, [is] a frequent outage credit, meaning if your power goes out multiple times in a year, you get a credit for that, too. Those bills are going to be reintroduced [in the current legislative term], is what I'm hearing. It doesn't just compensate folks adequately for their lost food or medicine or pain and suffering from these outages. It also creates an incentive for the utilities to actually get their grid fixed so that outages don't happen. And it incentivizes them to fix the outages faster when they do happen.
DT: I want to ask you about alternatives that some communities are looking at. In the fall, Washtenaw County's biggest city, Ann Arbor, approved about a half million dollars to study the idea of creating its own municipal power company to replace DTE and some other possible options. What are the pros and cons of a community trying to go out on its own?
YR: This is not a new idea. In fact, where I'm at in Lansing right now while we're talking, I'm standing right across from the Lansing Board of Water & Light headquarters. It is publicly owned. It is publicly run. And they're more accountable, meaning that people, when there's issues with the grid, have somebody to call.
"We owe it to our customers and employees to support candidates for public office that help us meet our purpose of providing safe, reliable, affordable and clean energy."DTE Energy repsonding to Washtenaw County Commissioner Yousef Rabhi's comments that utility companies have too much influence in state politics
You can go to city council. You can call your council member. You can call the mayor. You can call the Lansing Board of Water & Light. You can vote out people that aren't taking care of the grid properly. You have recourse as voters, as ratepayers. You do not have that with DTE and Consumers. And then what we find is that rates are actually lower.
One of the things I care about is that green energy piece. We want to make sure that we transition to renewable energy, and DTE is at a paltry 15% of their portfolio right now. I have been advocating and pushing for Ann Arbor to form its own municipal utility. I'm now actually exploring as a Washtenaw County commissioner whether we can, as a county, create our own locally run utility.
DT: In the fall, state regulators approved a rate hike for DTE and it was far less than the company had asked for. Then just this month, DTE asked for another hike that would increase the average customer's bill by about $12 a month. The company cited inflation and increased costs as the justification for that hike.
But as you noted, DTE reported $1.1 billion in earnings in 2022. That was up almost $200 million from the previous year. Is there a problem in the way the state reviews and consistently approves at least a portion of these utility rate hikes?
YR: There's a huge problem when they submit something like a rate increase. I don't know of the last time that they've been fully denied. Every time they come, they get something.
All of this happened at around the same time: They asked for a rate increase. The power went out for southeast Michigan residents. And then the next day they announced their $1.1 billion in profits. I mean, you cannot be more tone deaf to do this at a time when so many people are still suffering from their lackluster investment in their grid to make sure that we all can have heat, for God's sake, in the middle of the winter.
DTE's responds to Rabhi
Michigan Radio asked DTE to respond to Rabhi's comments. The company sent the following comments via email.
Regarding investments in their electricity distribution system:
"Since 2020, we’ve invested more than $8 billion into the electrical system that generates and transmits electricity to 2.3 million households and businesses. All this was done while keeping base rates nearly flat for customers."
On the timing of rate increase requests, outages, and profits:
"In our current rate review we are responding to what customers are asking for – more investments in energy infrastructure to improve the grid, and transition to low carbon energy sources.
Upgrading the system to improve reliability, as well as transitioning to a cleaner energy future for our customers, requires massive investments - $9 billion in the grid over the next five years, with an additional $5 billion of investment into cleaner energy generation. Healthy companies that are rated highly by investors can attract lower-interest debt to fund these investments. The savings on that debt reduces the burden on our customers.
Think of it in terms of a home mortgage – someone with a higher credit rating is able to get a lower interest loan on a home and have a lower monthly mortgage payment. In the case of DTE, that lower payment translates to avoided additional costs for our customers."
On the $35 electric bill credit for customers who lost power for 96 hours or more:
"We know that we cannot make up for the inconvenience caused by the February 22 ice storm, which was the second-worst storm in terms of outages in DTE’s history. Due to the widespread impact of the storm, DTE will voluntarily apply an outage credit of $35 for qualifying customers.
Customers who quality don’t need to do anything to receive the credit. Customers qualify for the credit if they were without power for longer than 96 hours due to this storm, or if this was their sixth outage in the past 12 months.
We encourage customers to check their homeowner's insurance and provisions for covering natural disasters caused by severe weather."
Regarding DTE money spent on political lobbying:
"As an energy company, DTE is affected each day by the decisions of federal, state and local officials. We owe it to our customers and employees to support candidates for public office that help us meet our purpose of providing safe, reliable, affordable and clean energy for the 3 million plus residents and businesses we serve every day.
Political contributions are funded through shareholder dollars and employee contributions and are not a part of electric rates."
Editor's note: As noted in the interview, both DTE Energy and Consumers Energy are corporate sponsors of Michigan Radio.
Some quotes from Yousef Rabhi in this story have been edited for length and clarity. You can listen to the complete interview near the top of this page.