After the ice: Anger and a push for public utilities

Municipalities from Ann Arbor to Highland Park to Pontiac are calling for public utilities amid DTE power outages.

It wasn’t only city residents who showed up to a meeting on DTE’s power outages at the Ann Arbor District Library’s Pittsfield Branch on Sunday.

Residents and leaders from across Washtenaw County joined in to speak about their experiences following the Feb. 22 ice storm and learn more about an initiative to break away from DTE Energy and create a separate municipal utility in Ann Arbor. Ann Arbor for Public Power, an advocacy group pushing for utility municipalization, organized the meeting.

Tom Brennan, secretary of the Superior Township Planning Commission, expressed interest in the push for a city-owned utility, asking how this could work at the township level. 

Ann Arbor resident Juan Carlos Calvachi said he had lost power for several days and had experienced a week-long outage two years before.

“We need to find a way to hold them accountable,” he said of DTE. 

Greg Woodring, president of AAPP, expressed a similar concern.

“Putting on pressure to make the utilities more accountable is incredibly important,” he told Planet Detroit. “I think that municipalization is a really good tool for that.”

Woodring said municipalization, or replacing an investor-owned utility with a municipally-owned one, would hasten the transition to cleaner energy, provide better reliability, create union jobs, and allow communities more control over decision-making. 

It’s a message that is resonating with some who were hit by power outages that left more than 700,000 Michiganders in the dark, an event that mostly affected customers of DTE and Consumers Energy, the state’s two largest investor-owned utilities.

Ann Arbor City Councilmembers Travis Radina (D) and Ayesha Ghazi Edwin (D) sent tweets following the storm calling on the city to investigate other options for getting its power. 

Ann Arbor is already conducting a feasibility study on creating a municipal utility or community-owned “sustainable energy utility,” an alternative that would supplement DTE’s network with renewables and wouldn’t require buying out the company’s infrastructure.

Woodring said that Lansing’s response to the ice storm showed that public utilities could do a better job than companies like DTE.

Although Ann Arbor was hit especially hard, receiving .65 inches of ice, Lansing still got .44 inches. But the Lansing Board of Water & Light reported only 15 customers without power on Thursday, Feb. 23, the day after the storm. On the same day, 17,700 customers were without power in Ann Arbor.

“Lansing has driven the point home that we really don’t need to live like this,” he said.

The public option

A 2018 U.S. Energy Information Administration analysis supports the assertion that public utilities perform better. The EIA found public utilities experienced fewer outages than private ones and restored power more quickly. EIA data also shows private utilities charged their customers 12% more than public ones.

But public ownership may not be a silver bullet. Like other cities, Lansing suffered extensive outages during a 2013 ice storm. Yet, residents and public officials successfully pushed for reforms from their utility, which hired a new general manager and improved the city’s tree-trimming program. And this last factor seems to have reduced the number of outages during the recent storm.

DTE may be taking a different approach. On a Feb. 23 earnings call where DTE announced $1.2 billion in profits for 2022, the company discussed its “lean” management plan, which included “delaying hiring, reducing our contractor workforce, deferring maintenance work in the short term and limiting overtime.”

On Sunday,  State House Majority Floor Leader Abraham Aiyash (D-Hamtramck) called for hearings on DTE and Consumers’ response to the storm, which accompanied a torrent of criticism on his Twitter feed, drawing attention to DTE’s earnings, extensive political spending, high charges, and poor reliability.

DTE may have also picked a bad time to ask for a rate hike, filing a request for a 14% percent residential rate increase with the Michigan Public Service Commission on Feb.10, which could add $12.46 to the average customer’s bill.

Woodring says that if municipalities create their own utilities — or perhaps just threaten to do so — it will also allow residents to demand cleaner energy. Currently, DTE has an especially dirty mix of power sources. A 2021 report by the consulting firm MJ Bradley found that of the top 20 investor-owned utilities, DTE was the fourth worst for carbon pollution, and the company’s Monroe coal-fired power plant has been listed as the third-dirtiest in the nation.

Retiring greenhouse gas-emitting energy sources could be crucial for realizing Ann Arbor’s A2Zero climate initiative, which aims to reach community-wide carbon neutrality by 2030 and deliver on the Biden administration’s goal of achieving a carbon-free power sector by 2035.

But DTE doesn’t plan on achieving net-zero emissions until 2050. And dark money groups associated with DTE and Consumers have spent heavily to defeat candidates who support renewable energy.

Even if advocates can’t successfully create publicly owned utilities, they could still get results by threatening to do so. For example, Boulder, Colorado pushed to municipalize its power production before ultimately cutting a deal with its provider, Excel Energy. The company agreed to increase renewable generation from 28% to 60% percent by 2030 and allow voters to resume their municipalization efforts if certain benchmarks aren’t met.

Places that have created public utilities include the Orlando suburb of Winter Park and Long Island’s Nassau and Suffolk Counties. In metro Detroit, Highland Park City Council requested community input on possibly creating a public power utility in 2021.

Energy justice nonprofit Soulardarity responded with a memo asking the City Council to pursue a public power feasibility study, pointing to the example of Wyandotte Municipal Services, which provides water, energy, internet, phone and television. (Wyandotte restored power to most of its customers within 24 hours following the recent ice storm.) So far, Highland Park City Council hasn’t taken further action on the matter.

And on Wednesday, Feb. 28, the Pontiac City Council voted 6-0 to approve a resolution demanding accountability from DTE, which called on the Michigan Legislature “to start a committee researching the feasibility of a democratically accountable state-run utility in Michigan.” 

However, publicly-owned power isn’t the only structural change ratepayer advocates are looking at. Amy Bandyk, executive director of the Citizens Utility Board of Michigan, says her group calls for “performance-based regulation,” a practice that states like New York, Minnesota, and Hawaii are considering

These rules would limit how much profit a utility collects if they don’t meet targets for reliability or other factors. Bandyk said the Michigan Legislature could potentially pass such a measure.

She also cautioned that DTE has significant resources to legally or politically stop a municipalization effort.

“They seem more focused on trying to block Ann Arbor from forming its own utility rather than giving Ann Arbor residents better service,” she said.

DTE defended its recent investments in reliability in an email to Planet Detroit, saying the company invested more than $1 billion in the grid last year and that customers experienced 21% fewer power interruptions in 2022 than in 2021. However, DTE previously noted fewer severe weather events in 2022.

“DTE is also working closely with Ann Arbor on renewable projects and environmental concerns, as we share the City’s A2Zero goals,” the company said in its statement. They added that local participation in MIGreenPower, the company’s voluntary green pricing program, has moved the city 30% of the way to its 2030 goal.

Paying for losses, planning for more outages

At Sunday’s meeting, Calvachi expressed support for Ann Arbor for Public Power’s efforts but was also concerned with immediate issues like getting reimbursed for the hotel room he rented during the outage.

He called DTE’s credit of $25 a day, which only kicks in after users are without power for five days, “a slap in the face.” The MPSC recently moved to increase this credit to $35 daily, with an additional $35 daily credit if the outage lasts longer than four days. However, this still falls short of the $2-an-hour payment that CUB had asked for. And money is only part of the issue. 

“I am lucky enough that I don’t have any issues with my health,” Calvachi said. “But what about people who have respirators in their houses, who are not necessarily going to be able to leave their homes.”

Another attendee said that in the short term, communities must focus on creating resilience hubs. These could be housed in places like libraries, fire stations, and churches, using solar power and batteries to help provide a warm or cool place where people can charge their phones, use the internet, or access other resources. Detroit has begun an initiative to create such resilience hubs.

But climate change may not give cities much time to adopt such measures. Weather-related power outages increased by about 78% between 2011 and 2021, compared to 2000-2010. And Michigan is among the worst states in the country for weather-related disconnections.

For now, Calvachi called on those at the meeting to take advantage of the present crisis and spread the word on social media about their experiences with DTE.

“The bad press is never good for them,” he said. “And it really pressures them to do things they normally wouldn’t.”


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