Michigan Utilities Face Major Fines for Grid Reliability Improvements

LANSING, Mich. (AP) — The Michigan Public Service Commission has enacted new measures that could impose penalties of up to $10 million on Consumers Energy and DTE Energy if they fail to improve the reliability of their power grid. The decision was finalized during a commission meeting on Thursday.

The initiative is part of the ‘MI Power Grid Effort,’ designed to address the persistent issues of frequent and lengthy power outages experienced by customers. The order establishes criteria that the electric utility companies must meet, focusing particularly on reducing the number and duration of outages. Penalties will only apply if deficiencies are noted over the next several years.

Chair Dan Scripps stated, “Our goal from the beginning was to develop a framework that drives improvement in distribution reliability, particularly in the areas that are most frustrating for customers,” highlighting the need for responsive metrics that the utilities can be held accountable for.

According to the commission, failures to improve could result in financial penalties specifically tied to measurable metrics, including the average length of outages and restoration times. Both utilities will need to file a detailed plan with their own systems of financial incentives and disincentives by April 15, 2025.

In 2022 and 2023, a third-party audit revealed that Consumers Energy ranked in the lower quarter of utility companies for average outage lengths, further emphasizing the need for reform. During the recent outages in Flint, over 5,000 customers experienced power loss during harsh weather conditions, stressing the existing strain on the grid.

“Keeping the lights on is Job #1 for Consumers Energy. We believe this new approach will reinforce our Reliability Roadmap that is already making Michigan’s electric grid more reliable,” said Consumers Energy spokesperson Brian Wheeler in a statement.

The new regulatory framework will take effect in 2026, giving the utilities time to improve operations and adherence to standards before penalties are incurred. Any incentives for exceeding reliability benchmarks will match the potential financial penalties, fostering a balance that aims for enhanced service to customers.

As the weather conditions continue to pose risks for grid stability, residents have been urged to exercise caution. A wind advisory remains in effect until 3 p.m. EST, with gusts reaching as high as 45 mph reported across southeast Michigan.