State Lawmakers Propose Automatic, Increasing Hourly Credits During Power Outages

Over the past two years, small businesses have been dealt blow after blow. For 27th Letter book store in Southwest Detroit, it wasn’t the pandemic that closed its doors last June, it was a power outage.

“The first one we experience was during the flooding event at the end of June,” said 27th Letter Books co-owner Erin Pineda.

That power outage knocked out their sump pump, which was needed to prevent the flooding that followed. Pages of books began to curl due to the change in humidity, and the lack of power forced them to close for days.

“I would say it was in the thousands of dollars of lost opportunity for revenue,” Pineda said of the power outages. “Especially as a new business, that was important for us.”

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In the months that followed, their store had even more outages. 7 Action News first met Pineda and her husband Andrew at a meeting last fall in Novi, where they spoke out at the attorney general over issues with utility companies.

“It’s continued to be an issue for us to not be able to rely on stable power,” Erin Pineda said.

“We’re calling them to task,” said state Rep. Yousef Rabhi, a Democrat from Ann Arbor. “They need to update their grid and if they don’t, there should be financial consequences for them as a company.”

Rabhi is one of the lawmakers proposing new legislation that would require utility companies to automatically credit consumers whenever there’s a power outage, starting at $5 an hour for outages five hours or less, going up to $25 an hour for outages that last three days.

“That is going to be seen as a huge expense and something they’re going to do everything in their power to avoid, which means they’re going to try to avoid outages, which is the whole point,” Rabhi said.

The package of five bills also calls for more involvement and oversight from the public.

“I should have the right as a customer, as a resident, as a citizen watchdog to be able to look at these plans that are being proposed to the Michigan Public Service Commission and provide commentary,” Rep. Abraham Aiyash of Hamtramck said. “There is overwhelming support from the public. We worked with several citizen-led groups who are passionate about this issue.”

Both major utility companies, DTE and Consumers Energy, call the legislation unnecessary. Both of these lawmakers say they have bipartisan support and are hopeful that the bills move forward.

 

“We are hopeful that we can push them through the committee process and at least get a hearing on these bills to elevate this issue,” Rabhi said.

In a statement responding to the proposed legislation, DTE spokesperson Pete Ternes said:

“The proposed bill is unnecessary. The Michigan Public Service Commission has already conducted a thorough review, with input from all interested parties, and issued orders last month approving new service quality and technical standards including compensation and automatic credits for customers experiencing an outage.

“At DTE we are addressing the causes of outages by accelerating our investments in electric grid hardening. In areas where work is complete, our customers are seeing a 50-70% improvement in reliability. The company has also committed $90 million to further accelerate its tree trim program, a major cause of outages, without raising rates. Last year we filed a Distribution Grid Plan for the next five years with the MPSC. The plan includes modernizing infrastructure to make the grid more resilient to the increasingly severe weather in Michigan, helping to drastically reduce the cost of outages for our customers as well as reducing budgeted funds and time spent on outages caused by equipment failures and weather.”

– DTE spokesperson Pete Ternes

Consumers Energy also responded, saying:

“Consumers Energy views this legislation as unnecessary. We already file distribution and investment plans with the MPSC and work hard to ensure reliability. Our plan calls for $5.4 billion over the next five years to reduce power outages with investments such as trimming trees, replacing poles and upgrading equipment to a higher, more resilient standard. We also worked with stakeholders in a workgroup related to Service Quality and Reliability Standards that researched and made recommendations about the outage credit model.”

– Consumers Energy