News Story

Power Outages? Utility Renewables Schemes May Mean ‘Get Used To It’

Michigan’s big utilities also plan for you to just have less to use

Severe storms last weekend left some 600,000 DTE Energy and 250,000 Consumers Energy customers without power. As of Tuesday morning, 91,000 DTE customers and almost 4,900 Consumers customers were still waiting, according to The Detroit News. Those who have been without power for at least five days are eligible for $25 credits from the utility companies.

“We understand your frustration as you try to go about your daily activities without power,” DTE said on Twitter.

Heather Rivard, DTE’s senior vice president of electric distribution, called the situation “unacceptable.”

Likewise, Michigan Attorney General Dana Nessel said in a press release, “It’s important we continue working together to ensure better reliability for our residents.”

But as DTE and Consumers Energy implement their ideas for generating electricity in the future — called integrated resource plans — customers can likely expect lower levels of power reliability.

In 2017, 37% of energy in Michigan was generated by coal, but DTE is planning to retire 11 of its 17 coal-fired generation units by 2022. The electricity these plants provide will be replaced by a mix of renewable sources, including more industrial wind turbines. The company will also import power from utilities in other states and Canada when the renewables can’t handle the demand.

Similarly, Consumers Energy recently announced a goal of getting 56% of its electric capacity through renewable sources. It plans to do that by buying power from elsewhere and by requiring Michigan household and business customers to use less through demand response programs. These may include voluntary incentives to use less power, but they can also involve mandatory reductions in energy usage, especially for commercial and industrial users.

As Consumers Energy anticipated last week’s heat wave, the company asked customers to keep their thermostats at 78 degrees to conserve its limited resources. That’s a prime example of a voluntary demand response.

The focus on backup energy sources in these plans highlights the weather-dependent nature of wind and solar generators, which are far less dependable than traditional power generation methods. That’s the assessment of Jason Hayes, director of environmental policy at the Mackinac Center for Public Policy.

“What’s happening is the utilities are shutting down the reliable, affordable generation, so when they shut that down, the plan is to replace it with less reliable, more expensive generation technologies,” Hayes said. “You can’t help but have your electricity system become less reliable when it relies on less reliable technologies. It’s not a slight against wind and solar to say that; it’s just a simple reality. The physics that goes into powering this generation technology means they’re ephemeral because the sun doesn’t always shine and the wind doesn’t always blow.”

As a result, utility companies end up building generators that run on natural gas as a backup for fickle energy sources.

“You could just build gas and have the exact same system and ability to produce electricity but at far less cost,” Hayes said. “That’s the challenge that you’re facing with these technologies. You end up building the system two or three times when you could just build gas or coal and get reliable, affordable generation the first time.”

DTE did not respond to a request for comment on how it plans to deliver reliable energy while phasing out traditional methods for making electricity.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.