LANSING – The Michigan Public Service Commission today announced it is seeking further input on proposals that would establish financial penalties for utilities that don’t meet thresholds for getting the power back on and incentives for reduced outages and faster restoration of service (Case No U-21400). The Commission’s meeting took place at the LV Eberhard Center in downtown Grand Rapids as part of the MPSC’s commitment to increasing accessibility and community engagement on energy and telecommunications matters.

As part of the Commission’s ongoing work to improve the reliability of Michigan’s power grid, the MPSC in 2023 launched a Financial Incentives and Disincentives workgroup, part of the Commission’s MI Power Grid effort, to develop reliability and safety metrics and financial incentives and penalties for utilities to improve their performance in keeping the power on and reducing the number and duration of outages. The goal of the penalties and incentives is to establish new baselines for performance, financial consequences for not meeting standards, and incentives for exceeding requirements.

After taking input over several months on an initial proposal, MPSC Staff on May 3, 2024, filed a revised straw proposal with recommendations outlining metrics to measure length of outages in various weather conditions and restoration times, the number of customers experiencing four or more outages per year, and data on the worst-performing circuits.

The MPSC seeks comments from interested parties on the straw proposal, which would:

  • Establish penalties if a utility’s 3-year system average interruption duration index, or SAIDI (excluding major event days) increases by 5% or more, and an incentive if this measure improves by 10% or more. SAIDI measures the average duration of outages.
  • Establish similar penalties and incentives around SAIDI metrics including all weather events. Utilities would be assessed penalties for not meeting 5-year performance goals and incentives for exceeding them by 10% or more.  This includes measuring the average duration of outages after major storms.
  • Assess a penalty for utilities that do not restore service to 90% of customers within 48 hours of a catastrophic storm (defined as a storm that results in 10% or more of customers losing power), as now required by the MPSC’s Service Quality and Reliability Standards, and incentives if a utility restores more than 90% within 48 hours.
  • Assess a penalty if a utility doesn’t restore service to 95% of customers within 72 hours of a catastrophic storm, as well as an incentive for besting 95%.
  • Assess a penalty if a utility doesn’t restore service to 90% of customers within 24 hours after gray-sky weather that results in between 1% and 10% of customers losing power.
  • Establish a penalty if 6% or more of a utility’s customers experience four or more outages per year, and an incentive if fewer than 6% of customers meet that threshold.
  • Assess a penalty if one of a utility’s top 10 worst-performing circuits repeats in the list of worst circuits within 5 years.

In addition, the Commission directed MPSC Staff to hold an engagement session to inform the development of additional metrics relating to the performance of the distribution system by Aug. 7, 2024; details about attending the session will be posted in the case docket.

In addition, interested parties are encouraged to file comments on the revised straw proposal by 5 p.m. July 12, 2024, with replies due by 5 p.m. Aug. 23, 2024. Comments may be filed electronically in the case docket or sent by email to [email protected] or by mail to Executive Secretary, Michigan Public Service Commission, 7109 W. Saginaw Highway, Lansing, MI 48917. Comments should reference Case No. U-21400.