Michigan is no Texas, but it has grid reliability issues of its own
It was the question asked around the country as Texas’ electricity grid buckled under cold weather last week, causing rippling energy and water crises that continue today:
Could it happen here?
In Michigan, a massive power generating crisis like the one in Texas is unlikely, experts said, but the state’s energy system has reliability problems of its own.
In many ways, Texas’ experience is unique to that state, where a deregulated and isolated grid leaves power companies with little incentive to invest in weatherization and much of the state unable to import energy supplies from its neighbors, leaving Texas more exposed to disruptions.
Michigan’s electricity sector is more prepared for extreme cold, and is connected to a regional grid that further increases its resilience. But experts say it remains vulnerable to extreme weather events that are becoming more common as the climate changes, and will need upgrades to stay reliable as our energy sources shift from centralized power plants to scattered wind and solar arrays.
For Michelle Jones, those concerns aren’t some distant concept.
A resident of Highland Park, which borders Detroit, Jones said she was without power for at least part of three days last July after a rainstorm in the DTE Energy territory. As she and her daughter rushed to whisk a freezer-full of groceries to another daughter’s house, they awaited word from DTE.
“First they tell us it’ll be back on at 8 p.m. And it wasn't,” Jones said. “Then they said 11 p.m. It wasn’t.”
By the time power was restored, she said roughly $200-worth of groceries in the fridge would be spoiled. Jones said her daughter applied for a $25 credit from DTE — a provision the state requires when normal outages surpass 16 hours — but was denied.
As the Texas catastrophe puts energy reliability in the national spotlight, Michigan utilities, consumer advocates and electricity regulators are grappling with how best to address Michigan’s own persistent reliability issues. Ramping up consequences for utilities when outages occur is one option on the table.
Nationwide, outages caused by extreme weather events have increased 67 percent since 2000, according to a Climate Central analysis. Michigan fared the worst, with 111 major weather-related outages between 2000 and 2019.
It’s a reality that prompted Richard Glick, chairperson of the Federal Energy Regulatory Commission, which regulates the interstate transmission and wholesale of electricity, to warn in the wake of the Texas outages that “there will be a next time.”
"The challenges that climate change poses for the grid are only going to grow starker and more immediate,” he said during the commission’s monthly meeting last Thursday.
Unlike Texas, where many power generators simply weren’t prepared to produce power during unusually cold temperatures, Michigan’s biggest challenge is interruptions that prevent power from traveling along power lines into customers’ homes.
“What happened in Texas is significantly less likely to happen here,” said Dan Scripps, chairperson of the Michigan Public Service Commission, a public body that regulates Michigan utilities. But Scripps added that the more localized blackouts caused by weaknesses in Michigan utilities’ distribution systems “aren’t any less real for the customers going through them.”
Often, the culprit is trees that hit power lines during storms. Some 50 million people in the eastern and midwestern U.S. lost power in 2003 after overgrown trees struck a high-voltage power line to trigger the largest blackout in American history.
Inadequate tree-trimming has also been blamed for outages specific to Michigan, prompting electricity regulators to direct utilities to expand trimming programs.
Could penalties reduce blackouts?
Consumer advocates say there’s more the state could do.
Citing statistics that put Michigan among the bottom of U.S. states for its utilities’ track record of restoring power quickly after it goes out, the Michigan Citizens Utility Board and other groups have urged regulators to create more incentives for utilities to invest in grid reliability, and harsher penalties for power outages.
A state report Gov. Gretchen Whitmer ordered in the wake of a 2019 natural gas shortage identified a host of steps the state could take to create a more reliable and resilient power system.
As part of a broader effort to ease the state’s shift toward green energy, called the MI Power Grid Initiative, state regulators are exploring possible solutions. That includes considering whether to strengthen financial penalties utilities face for allowing outages to fester.
Michigan utilities must make bill credits available to customers who experience prolonged or frequent outages, but in most cases it’s up to customers to request the credits. Only a fraction do.
Jones, the Highland Park resident, said most of her neighbors don’t even know the credit program exists.
A proposal the MPSC will consider this year recommends increasing the credits from $25 to $35 and making payments automatic, among other changes.
Jackson Koeppel, executive director and founder of the Highland Park energy justice nonprofit Soulardarity, argues that’s not a strong enough penalty to get utilities to modernize old and blackout-prone infrastructure.
Soulardarity is among those lobbying state energy regulators to require mandatory $2 credits to customers’ bills for every hour of outages they experience. Those groups also want state regulators to better hold utilities accountable for delivering reliable electricity when they raise rates to build out new infrastructure.
“Utilities should pay for their bad performance, not the ratepayers who already paid for reliable energy in the structure of their rates,” Koeppel said.
In a release Monday, DTE Energy highlighted the company’s recent reliability improvements. Customers, the company said, experienced a 25-percent improvement in reliability between 2019 and 2020. And DTE trimmed more than 5,500-miles-worth of trees, a 1,000-mile improvement over the previous year.
Representatives for DTE and Consumers, the state’s two largest electricity utilities, told Bridge Michigan they are always working to improve reliability. That could mean trimming trees, upgrading poles and wires, or investing in substations and other infrastructure.
While it would be impossible to eliminate outages altogether, said Trevor Lauer, president and chief operating officer of DTE’s electric utility, “our reliability has improved year over year.”
Lauer said the utility supports updating Michigan’s reliability standards, but “we want them to recognize that there are some realities on running the business” and penalties and incentives, if not structured right, could have unintended consequences for ratepayers.
The MPSC has directed DTE and Consumers Energy to provide regulators with metrics for how they’ll keep residents’ power on consistently, which Scripps said will allow regulators to identify new ways to encourage utilities to reduce blackouts.
“We are going to have your earnings reflect the experience of your customers from an outage perspective,” Scripps said. Utilities have made progress with better tree trimming and investing in distribution infrastructure, he said, “but we've got a long ways to go.”
Making the green energy transition
While they work to address ongoing reliability issues, electricity regulators must also focus on preparing the nation’s energy grid for the transition to renewable energy.
Whitmer has committed to net zero carbon emissions by 2050, and Michigan’s largest utilities have also announced net zero plans (2050 for DTE, 2040 for Consumers). President Joe Biden, meanwhile, has promised to eliminate grid emissions by 2035.
As part of that shift, the power sector will grapple with how to transport energy from Point A to Point B, as more energy comes from turbines and solar arrays scattered across the country, instead of localized power plants. And the grid will need to be capable of providing more power overall, as electric cars replace gas-powered engines.
Michigan joined a multi-state task force in 2018 on comprehensive planning aimed at modernizing grids for the renewable energy shift. But efforts to transform the grid will also depend heavily on policies set on a regional level.
Most of Michigan’s electricity system falls within the territory of the Midcontinent Independent System Operator, a nonprofit that manages grid transmission. Clean energy advocates complain that MISO is moving too slowly to add transmission lines, which slows progress toward state and federal clean energy goals and compromises energy reliability in the long run.
“We simply aren’t building enough,” said Toba Pearlman, an attorney who leads the Natural Resources Defense Council’s Midwest renewable energy work.
That, she said, is already scuttling plans for new renewable projects in Michigan and elsewhere, because there isn’t room on the grid for those power generators to deliver their electricity.
Novi-based ITC Holdings, the nation’s largest independent transmission company, owns 8,700 miles of transmission lines in the lower peninsula. Simon Whitelock, Vice President of ITC Holdings Corp. and president of ITC Michigan, said the Texas catastrophe was “a wakeup call” for the electricity industry.
While states with more interconnected grids, including Michigan, are in a better position to weather disruptions in the present-day, he said, the entire nation’s grid needs work to prepare climate-driven weather extremes and the renewable energy revolution.
“The very nature of being at the mercy of the sun and wind is that you’re going to need to adapt,” when the sun isn’t shining or the wind isn’t blowing, he said, and today’s grid falls short of what will be needed in the future.
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