(No caption)
DTE has cut off power to its customers about 260,000 times since the start of the pandemic — the highest rate of the state's largest, similarly structured utilities.
The findings come from a report by Detroit's Outlier Media and ProPublica:
DTE disconnected customers 80,600 times in 2020 and more than doubled that number in 2021. Its 178,200 disconnections for nonpayment last year were its highest annual total since 2016.
During the pandemic, DTE’s rate of electricity shut-offs — disconnections as a proportion of customers — outpaced the six other utilities in Michigan that are owned by private investors and have their prices regulated by the state. DTE’s rate was twice as high as the state’s second largest utility, Consumers Energy, which serves areas with a similar share of low-income residents, according to an analysis of U.S. Census Bureau data.
The utility says the majority of disconnections lasted less than 48 hours and that it also forgave $2.6 million in debt for customers in the first year of the pandemic. Unpaid bills, a spokesman says, must be managed in a cost-effective way to avoid saddling those who can pay with higher rates.
But one Detroiter who tells Outlier he forgoes doctor visits to keep his lights on notes the company "is constantly posting a profit, a major profit."
Even as the pandemic upended lives in the Detroit area, DTE saw strong earnings in 2020 and 2021. Cash dividends paid out to investors in the electric company, bolstered by rate hikes, rose 76% from 2010 to 2020, to $539 million. DTE’s financial success is important to everyone in the region, the utility argues, because it allows DTE to attract additional investors and borrow money at a lower financing cost.
Beyond its investor dividends, the health of the company’s finances is reflected in the pay of its top executive. CEO Jerry Norcia received a salary of $1.2 million as part of total compensation of $9.7 million in 2020, his first full year on the job. In every other year since 2017, the company’s compensation package for its CEO has topped $10 million.
The company's regulatory body, the Michigan Public Services Commission, has approved numerous DTE rate hikes in recent years. The chair of the MPSC tells Outlier, "There’s not sort of a clear place in Michigan law where it gets to ‘And also can customers afford to pay for it?’"
The Michigan Public Service Commission, which negotiates these rates through an administrative proceeding, is not empowered to reject rates on the grounds they’re too expensive for low-income customers. Instead, it “has an obligation under Michigan law to set rates based on whether the investments proposed are reasonable and prudent and then allowing for the opportunity to earn a profit on those that are,” said Scripps, chair of the commission.
Oregon and Massachusetts have reportedly made progress on that front, passing legislation that gives regulators power to take customers’ ability to pay into consideration when setting gas or electric rates.
