May 23, 2024
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Consumers Energy agreed to pay a $1 million fine and take other steps to improve its performance after the Michigan Public Service Commission investigated complaints about malfunctioning electric meters, violations of rules on estimated billing, and significant delays in providing new electric and gas service (Case No. U-21502).
The Commission in October directed Consumers Energy to show cause why it shouldn’t be held in violation of MPSC rules governing billing and service quality and reliability. Commissioners learned about the issues from Consumers customers who attended a town hall hearing the MPSC held in Jackson in March 2023 to take public comment from those impacted by power outages that winter.
MPSC Customer Assistance Division Staff members also took complaints from customers about the broken electric meters, extended billing cycles with excessively high estimated electric use, and lengthy delays in providing new electric and gas service hookups for customers.
The meter issue arose as Consumers transitioned its advanced metering infrastructure electric meters from now-obsolete 3G cellular phone service to 4G-based meters. MPSC Staff investigating the issue found that, owing to supply and staffing constraints, Consumers couldn’t meet its expected timeframe to replace the older meters but neglected to notify the MPSC about the delays and service issues.
MPSC Staff also learned that Consumers was estimating electric bills for many customers with 3G meters even before cellular phone companies discontinued operating 3G service in January 2023 because the meters were not working and showing blank screens. That meant neither Consumers nor its customers could determine actual readings from the meters.
“It is a fundamental job for a utility to measure the amount of electricity used and then accurately bill their customers,” Commissioner Katherine Peretick said. “There was a clear and obvious failure here, and this $1 million fine and the corrective actions required in the settlement agreement will hopefully ensure this doesn’t happen again.”
The MPSC also investigated complaints from customers about delays in establishing new service, in violation of standards requiring 90% of new service installations to be completed within 15 days.
Consumers acknowledged the customer service problems and did not contest MPSC Staff’s enforcement recommendations. The utility said it would focus instead on rectifying the problems and working to ensure they don’t happen again.
MPSC Staff determined Consumers has shown significant improvements with reduced estimated billing, malfunctioning meters and delays in new service. As a result, parties in the case — MPSC Staff, Michigan Attorney General Dana Nessel’s Office and Consumers — reached a settlement agreement under which the utility will pay a $1 million fine that it cannot recover through customer rates.
The settlement agreement also requires Consumers to:
Commission seeks input on improvements to rate-case process and expanding public involvement in regulatory matters
Continuing its work on implementation of changes made in 2023 to Michigan’s energy laws, the MPSC today kicked off proceedings to investigate ways to improve the process by which the Commission reviews rate case applications and to review ways to expand opportunities for the public to engage in MPSC decision-making.
The two proceedings are part of the Commission’s efforts to implement Public Act 231 of 2023.
In Case No. U-21637, the Commission seeks comments from interested persons on improvements to the review process for rate cases.
The Commission notes that Michigan’s 2016 energy laws compressed the timeframe for MPSC review of rate cases to 10 months from 12 months, but that cases have significantly grown in size and complexity since 2016, straining the resources of all parties involved in rate reviews. The Commission invited comment on a number of questions, including whether a 10-month review timeframe is in the best interests of utility customers, whether there should be a minimum time between rate case filings, and whether utilities should file multi-year rate plans instead of annual case filings.
All comments should reference Case No. U-21637 and must be received by 5 p.m. July 23, 2024, with reply comments due by 5 on Aug. 23, 2024.
In Case No. U-21638, the Commission invited comment on further improvements the MPSC may make for communicating with the public, explaining Commission activities, expanding accessibility and participation, and enhancing the transparency of Commission proceedings. The MPSC also welcomes suggestions for ways to improve participation in MPSC proceedings by low-income residential customers, residential customers with high energy burdens, and individuals and communities impacted by MPSC decisions.
The MPSC will hold a public hearing Aug. 28 in Flint on Case No. U-21638, with additional details to be announced and filed in the docket shortly. Interested persons also may submit written comments by 5 p.m. Sept. 27, 2024, with replies due by 5 p.m. Oct. 25, 2024; comments must reference Case No. U-21638.
In both matters, written comments may be mailed to Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, Michigan 48909, or submitted electronically using the MPSC’s E-Dockets website or by emailing LARA-MPSC-Edockets@michigan.gov.
COMMISSION LAUNCHES ANNUAL ASSESSMENT OF FUNDING FACTOR FOR LOW-INCOME ASSISTANCE PROGRAMS
The MPSC kicked off its annual assessment of the funding factor for Michigan’s Low-Income Energy Assistance Fund (LIEAF), which raises up to $50 million annually for home energy assistance and self-sufficiency services for income-eligible households (Case No. U-17377).
The LIEAF funding factor, not to exceed $1, is collected monthly from each retail billing meter from participating investor-owned utilities, municipally owned electric utilities or rural cooperatives — no more than one meter per household — to raise funds distributed through nonprofit service agencies across the state through the Michigan Energy Assistance Program (MEAP). The Commission set the funding factor at 88 cents in 2023, two cents lower than in 2022.
MEAP, which is administered by the MPSC in partnership with the Michigan Department of Health and Human Services, assisted 56,948 households in 2023.
LIEAF, created through Public Act 95 of 2013, is a significant source of help for families struggling to pay home energy bills. State law requires the MPSC to set the LIEAF funding factor by July 31 each year for the following fiscal year, based on participation by investor-owned, municipally owned and rural electric cooperative utilities. Electric utilities must file by 5 p.m. July 1, 2024, information showing the number of retail billing meters the utility serves that are subject to the LIEAF funding factor, or file notice that the utility intends to opt out of collecting it.
Under the law, non-participating utilities are not allowed to shut off service to any residential customer from Nov. 1 to April 15 for nonpayment of a delinquent account. In addition, state law requires that funds need to be returned to the regions of the state from which they were collected, to the extent possible.
INDIANA MICHIGAN POWER CO.’S POWER SUPPLY COST RECOVERY PLAN APPROVED, BUT WITH WARNING SOME COSTS MAY NOT BE RECOVERABLE
The Commission approved Indiana Michigan Power Co.’s application for its power supply cost recovery plan for the 2023 planning year, accepting the utility’s five-year forecast and the company’s proposed PSCR factor of 5.08 mils per kilowatt hour (Case No. U-21261). But the Commission issued a warning under MCL 460.6j(7) and the Commission’s Code of Conduct, Mich Admin Code, R 460.10101 et seq., that I&M may not be able to recover its full costs under the Ohio Valley Electric Corp.’s (OVEC) inter-company power agreement without evidence demonstrating good faith efforts by I&M to minimize the costs of the agreement.
For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the MPSC on Facebook, X/Twitter or LinkedIn.
To look up cases from today’s meeting, access the MPSC’s E-Dockets filing system.
Watch recordings of the MPSC’s meetings on the MPSC’s YouTube channel.
DISCLAIMER: This document was prepared to aid the public’s understanding of certain matters before the Commission and is not intended to modify, supplement, or be a substitute for the Commission’s orders. The Commission’s orders are the official action of the Commission.
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