PSC: Michigan utility credits for outages raised by $2, still won't cover outage losses

The Michigan Public Service Commission increased on Thursday the amount that utilities must automatically credit customers who face lengthy electricity outages to $40 a day, an increase of $2. The decision came about a week after violent storms knocked out power to more than a half-million residents.

The PSC — the state regulatory agency responsible for overseeing that energy services are "safe, reliable and accessible" at "reasonable rates" — clarified to the Free Press that the increase was under a formula passed last year and the timing is unrelated to recent public and media scrutiny.

Michiganders have long complained about power reliability and recently raised concerns during last month's outage that they likely will not be compensated for losses, particularly spoiled food and hotel bills, because their power went out.

"We understand that the outage credit won’t cover everything lost when the power goes out," agency chairman Dan Scripps said in prepared remarks. "But the credit will help customers while encouraging utilities to do all they can to restore service quickly."

The credits, Scripps added are "one tool" the state agency "is using to encourage utilities to improve the power grid to better withstand increasingly frequent extreme weather and restore power as rapidly as possible after outages."

More: DTE, Consumers on track to reconnect power for customers, likely avoiding paying credits

The PSC declined, however, to comment on whether the latest outage — a test of the guidelines which were updated last year — worked as it intended or whether a four-day period to restore power without credits was an appropriate length.

The guidelines establish a minimum mandatory credit, but do not prohibit voluntary credits.

Utility companies, scientists say, both contribute to climate change and, as a result of it, are now facing the financial consequences with the forecast of more frequent and more intense storms.

DTE, which estimated that the recent outage cost $50 million or more , said it is transitioning to more renewable sources. It also has acknowledged it needs to provide more reliable service and is taking steps to do so by trimming trees and upgrading infrastructure.

The exact number of credits to be issued after the latest power outage has not yet been reported, but the PSC and the state’s two largest utilities — DTE Energy and Consumers Energy — told the Free Press the number is expected to be relatively small.

Electricity, both utilities said, would be restored within four days, the time allowed before the credits kicked in.

Prior to the credit update, customers were eligible for a one-time $25 credit and had to request it. That amount increased to $35 a day beyond the allowed period and became automatic, then $38, and now $40. Under the guidelines, it will be reevaluated again next year.

Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com.

This article originally appeared on Detroit Free Press: PSC: Michigan utility credits for outages raised by $2, still won't cover outage losses