Detroiters object to DTE rate increase as many reel from power outages

Just as DTE faces fierce pushback from residents about a proposed rate increase, tens of thousands of customers experienced power outages after a storm hit metro Detroit.

The power outages come a little more than a week after about 200 people from across the state packed a public hearing in downtown Detroit, overwhelmingly demanding that the Michigan Public Service Commission − a regulatory agency overseeing public utilities − reject a rate hike from DTE.

The company is asking for a 8.8 percent rate increase, or $388 million in additional revenue. That would amount to about $10 more a month for residential customers. Since 2010, the commission has approved six other rate increases. The most recent was in 2020, when the commission approved a DTE rate increase of 4.7 percent, or $3.93 more a month. The company provides electricity to 2.3 million customers in Southeast Michigan.

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Sucidra Monday, 49, of Detroit, told commissioners that she can’t afford the proposed rate increase. Aside from the refrigerator and oxygen machine she uses at night she unplugs everything else, she said. She didn’t have power from Monday evening to early morning Wednesday.

She used a generator to power her oxygen machine after her power went out. Her DTE bill is her largest − at $309 a month even with a shut off protection plan − and she has struggled to get on another assistance program, she said.

“There’s no reason why, even if it rains, we should still lose our power,” Monday said.

DTE expects to restore power for the vast majority of its customers − 95 percent to 98 percent − by end of day Friday, said Trevor Lauer, president and COO of DTE Electric. Most are slated to be back on by Thursday.

‘It’s a pretty hefty rate increase’

In a more than 600-page filing, DTE said it is requesting the rate increase “to recover the costs associated with significant investments in distribution, generation, and customer service.”

That includes modernizing equipment, accommodating customer demand in specific areas, improving worker and public safety and reducing how often power outages happen and how long they can last, according to the application.

The company also wants to make up for costs associated with a tree-trimming program and the Blue Water Energy Center, a new power plant.

The commission must make a decision on the rate case by Nov. 21.

Lauer said the company wants to continue to invest in its electric grid, which he says is one of the oldest in the country.

“If you have a car, you need to replace the tires and you need to replace windshield wipers and there’s a whole series of things you do to maintain it. We’re doing the same thing with our electric grid right now,” Lauer said.

Utilities are struggling with severe weather and aren’t accustomed to 60 to 70 mile an hour windstorms, he said. The company needs to continue trimming trees, replacing poles and cross arms and building new equipment to avoid power outages, he said.

“Our rates have stayed flat for three years for our customers. That’s highly unusual in any industry or any business and we’d like to try to stay out and not raise rates at all with customers, but we are investing very heavily right now in our system on behalf of our customers,” Lauer said.

The average DTE bill is $142 a month, he said.

Residential customers in Michigan pay about 18 cents per kilowatt hour, higher than the national average of about 15 cents, according to the U.S. Energy Information Administration.

A bill increase would eat into a family’s budget, said Meghan Richards, a 34-year-old mom of three.

“That could be groceries, clothing, your mortgage, your taxes. A lot of us are on a very, very strict budget and our income is not increasing. So, it’s a very real issue and problem and, yes, there are programs out here that help us pay our bills, but for how long?” said Richards, who works with the advocacy group Mothering Justice and the Eastside Community Network.

Richards lives in Detroit and lost power for about a week during last summer’s flooding. It was frustrating, she said, to see people with power a few miles away.

Rate cases are legal proceedings to determine how much utilities can charge customers based on the cost of its services. Interest groups, like businesses and government agencies, typically weigh in on these cases. They are referred to as intervenors.

“It’s a pretty hefty rate increase on homeowners and particularly when we’re still coming out of COVID. A lot of people are still trying to get back on their feet because they might have lost their jobs or just lost a source of income,” said John Freeman, Executive Director of the Great Lakes Renewable Energy Association, which intervened in DTE’s latest rate case.

During the beginning of the pandemic, an August 2020 survey from the University of Michigan’s Detroit Metro Area Communities Study found that while more than half of Detroiters were able to pay their utility bills, 26 percent of those asked said they struggled with their payments.

One statewide rent aid program reported providing $66.5 million in electricity assistance so far since the program launched last year. Another pandemic era program for homeowners has approved $5.5 million in utility help. Tens of thousands of Michiganders have applied for both programs.

“The pandemic significantly worsened an already unacceptable state of affairs where a significant percentage of residential utility customers (including DTE’s but also customers of all Michigan utilities) frequently have to choose between paying their energy bills and paying for other life necessities like rent, food and medicine,” said Amy Bandyk, executive director of the Citizens Utility Board of Michigan, another intervenor, in an email.

Advocates: Customers shouldn’t bear the costs

Customers are being asked to bear costs when they are already dealing with extreme outages and paying for their bills, said Derrell Slaughter, Michigan Clean Energy Advocate, for the Natural Resources Defense Council, which filed an intervention in the case.

“If they’re requesting an increase, we would like to see evidence that actually supports that increase,” Slaughter said.

Power outages among major utilities in Michigan are frequent and last too long, said Rick Bunch, executive director of the Michigan Municipal Association for Utility Issues, another intervening party.

Increases have largely fallen on residential customers as opposed to industrial customers, Bunch said. 

Lauer said DTE hopes for increased funding for the federal Low Income Home Energy Assistance program to address affordability. DTE has donated $50 million to outreach agencies, he said, to help with bills.

Several elected officials spoke out last week at the hearing and during a demonstration organized by a coalition of advocates.

The outrage continued in the midst of the power outages.

“In 2020, during the worst of the pandemic, DTE shut off power to customers more than 80,000 times. I have been at the other end when I’m in tears with my residents and can’t get them help,” U.S. Rep. Rashida Tlaib, D-Detroit, told commissioners.

Detroit City Council Member Gabriela Santiago-Romero, who represents the city’s 6th District, said she’s been living in her childhood home in southwest Detroit for 24 years and her monthly bills have gone from under $100 to $300 a month.

“We shouldn’t be working just to pay our bills and survive. We need to live in communities in a society that allows us to thrive,” Santiago-Romero said last week.

The commission has generally reduced rate increases from DTE Electric Co. Here are the amounts approved, and the years in which they were filed, during the last decade, according to the commission:

• 2019: $351 million requested and $188.3 million approved, or a 4.7 percent increase for residential customers.
• 2018: $476.6 million requested and $273.3 million approved  (8.69 percent increase) 
• 2017: $231 million requested and $65.2 million approved (1.4 percent increase)
• 2016: $344 million requested and $184.3 million approved (4 percent increase)
• 2014: $370 million requested and $242.7 million approved (5 percent increase)
• 2010: $443 million and $174.9 million approved (4 percent  increase)

“While we cannot comment directly on DTE Electric Co.’s rate case pending before the commission, in general, reliability must be considered along with affordability for customers as part of these proceedings,” Matt Helms, a spokesperson for the group, said in a Tuesday statement.

Helms said the commission last year launched a review of how utility companies respond to storms. The panel is reviewing 5-year plans filed by companies and focusing on how they plan to avoid outages in the first place, he said.

For more information on DTE’s rate case and to submit a public comment, go to https://sforce.co/3wIJBpY. 

Editor's note: This story was updated at 3:30 p.m. Sept. 1 to note the Blue Water Energy Center is now operating.