MPSC releases utility audit results of state's two largest electric utilities, data that will help improve reliability in Michigan

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The Michigan Public Service Commission today posted comprehensive results from an audit of DTE Electric Co. and Consumers Energy Co., an extraordinary examination of the operations of the state's two largest electric utilities aimed at getting to the root causes of lagging reliability and slow service restoration times.

The independent, third-party audit is the deepest dive the MPSC has conducted into the electric distribution systems of Consumers and DTE Electric, which together serve about 4.1 million customers. The MPSC launched the effort in 2022 amid a string of widespread outages and public frustration with unreliable service (Case No. U-21305).

"This audit is the first of its kind in Michigan, exploring the equipment and operations of the two utilities that provide electricity to more than 80% of Michigan electric customers," said MPSC Chair Dan Scripps. "It provides an unprecedented examination of the condition of the electric grid serving those customers, an incredibly valuable tool as the MPSC continues its work to reduce power outages, shorten the time for restoration of power after storms, and keep residents safe when power lines come down - in short, a roadmap to achieving a grid that meets customer expectations. The audit underscores that now is the time for both companies to focus more on strategic investments to prevent outages rather than reacting to them."

The audit took more than a year to conduct and was performed by The Liberty Consulting Group, based in Lebanon, Pa. As part of the audit, Liberty reviewed both of the utilities' infrastructure, programs and processes, visiting substations, inspecting poles and wires, and examining records from the utilities. Liberty will present its findings at the MPSC's next regular Commission meeting Thursday, Sept. 26, at the Commission's headquarters in Lansing; Commission meetings also are livestreamed.

Liberty held about 150 meetings including 50 interviews at each company with executives, managers and other employees and reviewed thousands of documents the companies released through more than 860 data requests from the auditors. Liberty also reviewed filings in the MPSC's electronic dockets and spent the equivalent of 50 person days conducting site reviews.

Consultants compared the performance and infrastructure of the two utilities to two similar investor-owned utilities in Illinois, Commonwealth Edison and Ameren Illinois, and the Lansing Board of Water and Light, a municipal electric utility.

"The results from this audit will inform our next steps and strategies to make the electric grid more resilient and reliable. It provides unprecedented transparency into the utilities' infrastructure and operations and allows us to make better decisions to improve service and affordability for Michigan customers," Commissioner Katherine Peretick said.

"We've not had this deep of a look at the functioning of the electric grid for these two utilities - examining the age and condition of equipment, the effectiveness of their maintenance and tree-trimming schedules, and comparisons to similar utilities to see how DTE Electric and Consumers stack up," Commissioner Alessandra Carreon said. "It will take time for both utilities to make the necessary investments to improve reliability. The data from this audit will help shape strategies to prioritize the deployment of the investment needed to reduce outages from severe weather, restore power faster when it goes out, and significantly lower the risk of the public coming in contact with downed power lines."

Among the audit's findings on DTE Electric:

• DTE Electric's 2022 and 2023 Customer Average Interruption Duration Index (CAIDI) metrics, which measure the average time required to restore service, were in the 4^th Quartile when both including and excluding major event days (MEDs), worse than average among utilities.Major event days occur when the distribution system experiences major impacts, such as from extreme weather.
• DTE Electric's 2022 and 2023 System Average Interruption Duration Index (SAIDI) metrics were in the 4^th Quartile including MEDs and in the 3^rd Quartile excluding MEDs. SAIDI measures the total number of minutes of interruption the average customer experiences.
• About 45%, or about a million of DTE Electric's customers, are served by an ungrounded 4.8 kilovolt (kV) system that requires more time to locate and fix faults than more modern 8.3 kV and 13.2kV systems, and also exposes workers and the public to direct higher risk of electric shock hazards.
• Nearly 40% of DTE Electric's 4.8kV substation transformers were installed between 1924 and 1960, and some of its 13.2 kV transformers date to the 1960s, older than comparable utilities' transformers. The condition of transformers, and not solely their ages, should drive transformer replacement, and periodic excessive loadings leave DTE Electric with a high substation transformer failure rate.
• The company doesn't track the age of its service transformers and in many cases doesn't track the number of customers served by the transformers.
• About 40% of the utility's circuit breakers and reclosers were installed between 1930 and 1960. Its legacy oil circuit breakers need more intense maintenance and lack in performance compared to modern gas circuit breakers.
• More than half of DTE Electric's overhead primary lateral lines are located in back lots, including brush-filled alleys in Detroit and some older suburbs. It's more costly to maintain these circuits and trim trees near them because of the difficulty of getting equipment to these locations.
• DTE Electric aims to have its lines trimmed of trees every five years, but the effective cycle is currently 5-7 years. Utilities with shorter vegetation management cycles have seen significant reductions in outages.
• The number of DTE Electric customers experiencing four or more interruptions (CEMI4) each year and the numbers experiencing more than eight hours of interruption (CELID8hours) are greater than usually acceptable for utilities. More than 13% of DTE Electric customers experienced four or more interruptions in 2023, and nearly 45% experienced interruptions of eight hours or more.
• Approximately 88% of all DTE Electric customer outages are caused by the distribution circuits.

  Among the findings on Consumers Energy:

• Consumers' 2022 and 2023 CAIDI metrics both including and excluding MEDs were in the 4^th Quartile, worse than average among utilities. Consumers' 2022 and 2023 SAIDI metrics placed them in the 4^th Quartile including MEDs and in the 3^rd Quartile excluding MEDs.
• Consumers operates an unusually high number of different low distribution voltages, owing to mergers over the years with legacy utilities. This requires Consumers to use isolating transformers to connect circuits with different voltages. The diverse and non-standard substation and circuit assets require the utility to maintain mobile substations and additional inventory beyond what's needed for standard voltage substations and circuits.
• About 62% of Consumers' low voltage distribution poles are classified as small-diameter class 5, 6 and 7, which are more susceptible to breaking in storms.
• As many as 18% of Consumers customers have electric distribution infrastructure in difficult-to-service back lots.
• Consumers aims for a tree trimming cycle of 5 to 9 years, depending on circuit voltages, for an average or "effective cycle" of 7 years. But in practice, the current average effective cycle is nearly 10 years because of a trimming backlog. Shortening the cycle is a significant, cost-effective way to reduce outages.
• More than 10% of Consumers' customers experienced four or more interruptions (CEMI4) and more than 25% of its customers experienced interruptions of eight hours or more (CELID8hours) in 2023.
• The utility's use of catchall "weather" and "unknown" cause codes for outages is imprecise and masks what actually causes outages.
• Consumers' low voltage distribution lines have consistently caused the most SAIDI minutes, approximately 87%.

The audit is available in the MPSC's E-Dockets system in Case No. U-21305.

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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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