General Offices:

One Energy Plaza

Jackson, MI 49201

LEGAL DEPARTMENT

SHAUN M. JOHNSON

Senior Vice President

and General Counsel

Tel:

(517) 788-0550

Robert W. Beach

Ian F. Burgess

Fax: (517) 768-3644

Don A. D’Amato

Teri L. Dennings

Gary A. Gensch, Jr.

Matthew D. Hall

Georgine R. Hyden

Katie M. Knue

*Washington Office:

1730 Rhode Island Ave. N.W. Tel:

Suite 1007

(202) 778-3340

MELISSA M. GLEESPEN

Vice President, Corporate

Secretary and Chief

Washington, DC 20036

Fax: (202) 778-3355

Compliance Officer

January 6, 2022

Robert F. Marvin

Jason M. Milstone

Rhonda M. Morris

Deborah A. Moss*

Maxwell K. Multer

Chantez L. Pattman

Michael C. Rampe

Scott J. Sinkwitts

Theresa A.G. Staley

Janae M. Thayer

Anne M. Uitvlugt

Aaron L. Vorce

Writer’s Direct Dial Number: (517) 788-7107

Writer’s E-mail Address: ian.burgess@cmsenergy.com

KELLY M. HALL

Vice President and Deputy

General Counsel

Emerson J. Hilton

Adam C. Smith

Bret A. Totoraitis

Ms. Lisa Felice

Executive Secretary

Michigan Public Service Commission

7109 West Saginaw Highway

Post Office Box 30221

Lansing, MI 48909

Assistant General Counsel

Attorney

RE: MPSC Case No. U-20629 – In the matter, on the Commission's own motion, to

establish a workgroup to review the Service Quality and Reliability Standards for

Electric Distribution Systems and to recommend potential improvements to the

standards.

Dear Ms. Felice:

Enclosed for electronic filing in the above-captioned proceeding, please find Comments of

Consumers Energy Company on Proposed Service Quality and Reliability Standards for

Electric Distribution Systems.

This is a paperless filing and is therefore being filed only in PDF.

Sincerely,

Ian F. Burgess

S T A T E O F M I C H I G A N

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

In the matter of the Commission’s own motion, )

to establish a workgroup to review the Service )

Quality and Reliability Standards for Electric

Distribution System and to recommend

Potential improvements to the standards.

)

Case No. U-20629

COMMENTS OF CONSUMERS ENERGY COMPANY

ON PROPOSED SERVICE QUALITY AND RELIABILITY STANDARDS

FOR ELECTRIC DISTRIBUTION SYSTEMS

I.

INTRODUCTION

The Michigan Public Service Commission (“MPSC” or the “Commission”) issued its

Order and Notice of Hearing (“Order”) on October 26, 2021, in Case No. U-20629, regarding the

adoption of revised Service Quality and Reliability Standards for Electric Distribution Systems.

The Order, with the proposed rules attached, scheduled a public hearing for December 9, 2021 to

allow presentations by interested persons and to set a final deadline for written comments by 5:00

pm on January 6, 2022. The proposed rules modify the existing Service Quality and Reliability

Standards for Electric Systems in Mich Admin Code, R. 460.701 – 460.752, which were adopted

by the Commission in its January 29, 2004 Order in MPSC Case No. U-12270.

Stemming from the September 11, 2019 Commission Order in MPSC Case No. U-20464,

which includes the final Michigan Statewide Energy Assessment and associated jurisdictional

recommendations, the Commission opened the docket in Case No. U-20629 to establish

workgroups, led by Staff, for the purpose of reviewing the current Service Quality and Reliability

Standards for Electric Distribution Systems and to recommend potential improvements to the

standards. Consumers Energy Company (“Consumers Energy” or the “Company”) participated in

1

multiple stakeholder sessions, hosted by the MPSC Staff (“Staff”), between December 3, 2019 and

March 12, 2020. The Company also provided feedback in response to three draft rules sets on

August 28, 2020, October 5, 2020, and November 25, 2020, in addition to other comments filed

by Consumers Energy in the Case No. U-20629 docket.

The comments presented below are provided by Consumers Energy in response to the

proposed rules attached to the Order. The proposed rules will govern the electric services that the

Company provides to its electric customers; therefore, Consumers Energy has a direct interest in

this proceeding. In filing these comments in response to the most recent draft of the Service

Quality and Reliability Standards for Electric Distribution Systems, Consumers Energy reiterates

its recommendations expressed in its previous comments filed by the Company in this Case No. U-

20629 docket. Consumers Energy appreciates the opportunity to provide further comments on

these standards.

II.

COMMENTS

A.

R. 460.722 Unacceptable levels of performance during service

interruptions sub rule (e) and (f)

The Commission should clarify whether the difference between the required data in

R 460.722(e) and R 460.722(f) is intentional. R 460.722(e) includes “both normal and catastrophic

conditions,” while R460.722(f) includes “all conditions.”

B.

R. 460.722 Unacceptable levels of performance during service

interruptions sub rule (b)

As expressed previously, the Company is not aligned with Staff’s proposal to set the

performance threshold at 48 hours during catastrophic conditions. When the Company

experiences storms that are significant enough to cause catastrophic conditions, it is usually the

case that this weather is having a similarly devastating impact on the neighboring utilities that

would be close enough to provide mutual assistance quickly. It generally takes 48 hours for crews

2

from out of state, whose service territories had not been impacted by the same events, to begin to

arrive in Consumers Energy’s territory, meaning that the Company would be without the mutual

assistance it would require to recover in this time frame. The Company is not guaranteed to secure

all the resources necessary through mutual assistance, as the releasing utility has the right to hold

their resources due to a variety of reasons. Often, neighboring utilities are facing the same

geographic storm system that the Company is facing, thus reducing the ability to secure help. As

an example, on Saturday, November 14, 2020, the Company requested mutual assistance for 150

Distribution Line resources to support a windstorm that was expected to impact the state. All

utilities in the Great Lakes Mutual Assistance network elected to hold all their resources, as they

were expected to be impacted by the same wind event.

Moreover, the catastrophic category covers a huge amount of ground; a storm affecting

10% of the system is far different than a storm affecting 15% or 20% of the system. Even with

best efforts, the Company cannot recover from this type of “double-catastrophic” type of event

(such as the events of March 7, 2017, or December 21, 2013, affecting 18.5% and 21.7% of the

system, respectively) in a 48-hour period, especially during the winter and still less over a holiday

as assistance tends to be less available.

For this reason, Consumers Energy proposes a 60-hour threshold to meet its performance

standards during catastrophic weather, plus four additional hours on national holidays for every

1% above the 10% threshold for catastrophic conditions. This will allow for additional time to

secure the necessary resourcing to meet the response needs.

In order for the Company to meet these more stringent requirements, the use of pre-staging

resources will be necessary and will be at an additional cost to the service restoration program.

Pre-staging involves placing Distribution Line resources at locations expected to be impacted by

3

the storm event prior to the storm hitting. Recovery in rates will be sought to fund deploying

resources prior to the event. It should be recognized that planning for an event and staging all the

necessary resources takes days of preparation and planning. Weather can change and forecasts

can be wrong. This could cause stranded costs in that the storm does not materialize as severely

as predicted. It is likely that the Company will seek recovery for these additional costs in the

service restoration program in the future in alignment with the more stringent requirements

proposed.

C.

R 460.744 Customer accommodation for failure to restore

service after sustained interruption due to gray sky and

catastrophic conditions, R 460.745 Customer accommodation

for failure to restore service during normal conditions

Consumers Energy remains supportive of the increase of an automated customer outage

accommodation from $25 to $35 in the proposed rules; however, the Company is not supportive

of the $2 per-hour additional accommodation. In a 24-hour period, the $2 per-hour credit would

result in a $48 credit on top of the initial $35 credit. This $83 sum far exceeds an average

residential customer’s electric bill of $3.89 per day. The outage credit is meant to be an

“accommodation” and not a “penalty” on utilities, reflected in the recent revision to the title of

R 460.744 and R. 460.745 from “Penalty” to “Customer Accommodation” for failure to restore

service. The $35 outage credit already provides accommodation for customers experiencing

outages, so the additional hourly charge can only be viewed as a penalty to utilities as the state

predicts increasingly stronger and more frequent storms due to climate change.

The Company is also concerned that the $2 per-hour customer credit is overly complex,

will be challenging for customers to understand, and may lead to misunderstandings between the

Company and customers as to what the proper outage credit should be. This will result in

unnecessary frustration and dissatisfaction for customers and additional administrative burden for

4

Consumers Energy. Similarly, the requirement to implement an hourly credit mechanism also

significantly increases the cost and complexity of implementing the automated credit.

D.

Automated Outage Credit

The Company supports the automatic application of the outage credit to eligible customers’

bills. However, the Company’s current billing system and Outage Management System does not

support automatic bill credit applications, nor the new proration provision, and it will be costly to

build this functionality. As the Company has begun formally initiating the project, it has

completed a more detailed review of the scope to implement the complex changes to the

Company’s billing system (SAP), Data Lake, and Outage Management System required to meet

the current draft rules. At present, the Company’s estimated cost for this project is approximately

$1.6 million, with a target completion of December 2022. The Company will seek recovery for

these costs associated with implementation of these requirements. If the updated Service Quality

and Reliability rules are published prior to December 2022, the Company would ask that the MPSC

recognize in the rules that additional time would be needed for implementation.

E.

Additional Comments

Consumers Energy would like to draw attention to the benchmarking report provided by

Public Sector Consultants in February 2020, during the active meeting phase of this workgroup

process. This study concluded that “statewide standards do not lend themselves to utility-specific

applications or guideline establishment for improving performance,” noting that “the majority of

[other] state standards require utilities to restore service as soon as possible and subsequently

report their reliability performance ….”

Moreover, Michigan is unique from other states with broad requirements that utilities must

operate the electric grid within defined parameters, in that Michigan’s standards are “among the

5

most prescriptive in this study” – an observation made before subsequent Staff redlines that

proposed further restrictions.

Finally, the Company encourages reconsideration of the proposed Standards in the spirit

of the workgroup process. There have been significant redline changes during the comment

period, and there has not been sufficient opportunity to clarify the rationale behind these changes

or to allow for in-depth discussion of utility counter-proposals. The Company would welcome the

opportunity to resume meeting virtually in order to participate in these discussions.

Respectfully submitted,

CONSUMERS ENERGY COMPANY

6

STATE OF MICHIGAN

DEPARTMENT OF ATTORNEY GENERAL

P.O. BOX 30755

L

ANSING, MICHIGAN 48909

DANA NESSEL

ATTORNEY GENERAL

January 6, 2022

Ms. Lisa Felice

Executive Secretary

Michigan Public Service Commission

7109 West Saginaw Highway

Lansing, MI 48917

Dear Ms. Felice:

Re:

MPSC Case No. U-20629, U-20630 and U-21150

In the matter, on the Commission’s own motion, to establish a workgroup to review the

service quality and reliability standards for electric distribution systems and to recommend

potential improvements to the standards.

In the matter, on the Commission’s own motion, to establish a workgroup to review the

Technical Standards for Electric Service and to recommend potential improvements to the

standards.

In the matter, on the Commission’s own motion, to propose revisions to the rules

governing consumer standards and billing practices of electric and natural gas utilities

regulated in accordance with 1919 PA 419, as amended; 1939 PA 3, as amended; and 1965 PA

380.

In its November 4, 2021, order in Case Nos. U-20629, U-20630, and U-21150, the

Commission requested comments from interested parties regarding the proposed

service quality and reliability standards, and also proposed revisions to rules

governing consumer standards and billing practices of electric and natural gas

utilities. The proposed service quality and reliability standards include customer

bills credits when electric utilities fail to meet specified levels of performance and

the provision for an incentive mechanism to encourage electric utilities to improve

the level of performance of the electric distribution system.

The Attorney General (AG) is pleased to provide comments that will assist the

Commission in finalizing the aforementioned standards and rules. The overriding

objective of the Attorney General is that the reliability and service quality of the

electric distribution system of Michigan utilities must improve from current levels

and there should be an urgency to achieve significant performance improvement. In

that regard, paramount in the Attorney General’s comments below are the

principles that standards and rules must be fair and reasonable to both customers

and utilities, and that the failure to achieve the stated standards and service

quality levels has financial consequences for the utilities or cooperatives under the

commission’s jurisdiction.

The Attorney General’s comments below pertain to those sections of the service

quality and reliability standards filed with the November 4, 2021 Commission order

in Case No. U-20629. Reference to utility or utilities also includes cooperatives

under the commission’s jurisdiction.

PART 1: GENERAL PROVISIONS

PART 2: UNACCEPTABLE LEVELS OF PERFORMANCE

The Attorney General does not agree with the proposed revisions to Part 1 and Part

2 of the Service Quality and Reliability Standards for Electric Distribution Systems.

As expressed in her August 27, 2020 comments (attached to these comments), the

creation of the gray sky conditions creates a greater restoration time for customers

than the prior rules that contain just normal and catastrophic conditions. In fact,

since these prior comments, it appears that the problem identified by the Attorney

General has worsened in these new revised rules. In addition, no rule has been

included to address the protecting customers in the event of a major disaster such

as the discussed in the National Association of State Utility Consumer Advocates

2019-01 resolution. A disaster preparedness plan on how the utilities plan to

respond and work with the cities, townships, police, consumer advocates, and

community groups in their territories is also needed in these rules.

As to the outage credits, the Attorney General believes the amount is still not

sufficient to address the cost incurred by customers following an electric outage. As

expressed in her prior comments in this docket and others, the outage credits need

to be automatic and the amount the credit doesn’t properly take into account all the

costs incurred by customers. The Attorney General provided a snapshot of costs

incurred by customers as a result of the summer outages and believes that the

Commission should conduct further investigation into the proper amount of the

credit. The development of a disaster relief fund, as suggested by the Attorney

General, would also help alleviate some of the burdens experienced by customers

following a lengthy electric outage. The Commission can make an addition to Part I

and create R 460.704. In R 460.704 the Commission could create the authority to

create disaster preparedness plans and require utilities to file within 6 months of

these rules being adopted to address such plans before the Commission.

Moreover, the standards define the unacceptable level if service is not restored or

the response to a wire down is not achieved in a set number of hours for at least

90% of the affected customers or incidents. As written, the standards do not provide

for a maximum acceptable service restoration time or response time for the

remaining 10% of the power outages and wire-down situations. The remaining 10%

is often the source of most customers complains when it takes several days or weeks

for customers to have electric service restored. The Commission should remove the

gray sky condition as discussed above and create maximum acceptable service

restorations times or response times. If the Commission adopts the proposed rules,

then the Attorney General recommends that the Commission establish the following

maximum service levels:

R460.722(a) All weather conditions – AG Recommendation: Maximum

restoration time within 4 days (96 hours) for 100% of all customers experiencing

sustained interruptions. No more than 50 exceptions above 96 hours will be

acceptable within a calendar year for unusual and difficult service restoration

situations.

R460.722(b) Catastrophic conditions – AG Recommendation: Maximum

restoration time within 7 days (168 hours) for 100% of all customers experiencing

sustained interruptions. No more than 100 exceptions above 168 hours will be

acceptable within a calendar year for unusual and difficult service restoration

situations.

R460.722(c) Gray Sky conditions – AG Recommendation: Maximum restoration

time within 5 days (120 hours) for 100% of all customers experiencing sustained

interruptions. No more than 50 exceptions above 120 hours will be acceptable

within a calendar year for unusual and difficult service restoration situations.

R460.722(d) Normal conditions – AG Recommendation: Maximum restoration

time within 3 days (72 hours) for 100% of all customers experiencing sustained

interruptions. No more than 10 exceptions above 72 hours will be acceptable within

a calendar year for unusual and difficult service restoration situations.

R460.723(1) Wire Down all conditions – AG Recommendation: Maximum

response time within 240 minutes (4 hours) for 100% of all first responder wire-

down notifications.

R460.723(2) Wire Down Non-Metropolitan area – AG Recommendation:

Maximum response time within 360 minutes (6 hours) for 100% of all first

responder wire-down notifications.

R460.724(b) New Service Installation – AG Recommendation: Maximum

installation time for new service requests within 30 business days.

PART 3: RECORDS AND REPORTS

R460.732 Annual report contents. AG Recommendations:

Subpart (b) through (g), should also require that the utility identify and explain all

situations where service restoration and service levels exceeded the maximum

acceptable level.

Subpart (i) through (l), should be revised to include the threshold hours for

reporting customer credits recommended by the Attorney General in section

R460.744 below.

Subpart (m), the requirement for electric utilities with 1 million or more customers

to list the 10 worst performing circuits could be very limited given the hundreds of

circuits operated by the large electric utilities. This requirement should be changed

to the top 20% worst performing circuits.

Subpart (n), the requirement for electric utilities and cooperatives with less than 1

million customers to list the worst performing 1% of circuits could be very limited

given the number of circuits operated by the large electric utilities. This

requirement should be changed to the top 10% worst performing circuits.

Subpart (q), the requirement to report the number of CELID cases for indices

CELID8hours, CELID24hours, and CELID48hours excludes reporting of other

cases between CELID8hours and 48hours and any cases longer than 48 hours. The

requirement should be changed to report cases between CELID8hours and 48 hours

in 8-hour increments and also cases above 48 hours in total.

PART 4: FINANCIAL INCENTIVES AND CUSTOMER ACCOMMODATIONS

R 460.741 Approval of incentive and penalties by the commission.

AG Recommendation: This section should be revised to add penalties to be assessed

to utilities if they fail to meet a threshold level of performance or repeatedly fail to

achieve the minimum performance standards established in R 460.722, R 460.723,

R 460.724, and R 460.151(2)(a) and (b). It is critical to create an incentive and

penalty mechanism that is symmetrical. In the approved customer rates, electric

utilities recover the cost to operate and maintain distribution facilities, including

repair costs, in order for the utilities to provide the level of service defined in the

aforementioned standards. Furthermore, electric utilities recover the cost of capital

investments, including a return on those investments. If some or all of the service

and the reliability standards are not met repeatedly year after year, customers are

not receiving the expected value for costs paid and included in rates.

Therefore, it is necessary for customers to recover the lost value in future years in

the form of penalties imposed on the utilities by the commission. Similarly, if

utilizes achieve performance levels that exceed the stated performance levels or tied

to national average reliability performance standards, they should be rewarded

with incentive payments. Furthermore, it is necessary to begin a performance

incentive and penalty mechanism with some urgency given the under-performance

of Michigan electric utilities relative to other electric utilities in the U.S. [CUB

Utility Performance Report, 2020 Edition (CUB Report), available at:

https://d3n8a8pro7vhmx.cloudfront.net/cubofmichigan/pages/1152/attachments/original

/1602176971/CUB_of_MI_Utility_Performance_Report_2020_Edition.pdf?1602176971 ]

The Attorney General recommends the following revisions:

Rule 41.

(1) The commission may authorize an electric utility or cooperative to receive a

financial incentive if it exceeds all of the service quality and reliability standards

adopted by these rules and exceeds national average reliability performance

standards. The commission may also authorize financial penalties and

increase credits to customers as provided in these rules if an electric

utility fails to repeatedly meet one or more of the service quality and

reliability standards established in R 460.722, R 460.723, R 460.724, and R

460.151(2)(a) and (b) and national average reliability performance

standards. [Bolded text proposed by AG]

(2) A request for approval of an incentive mechanism must include financial

penalties for failing to repeatedly achieve service quality and reliability

standards and national average reliability performance standards, must be

made in either of the following proceedings, and must be conducted as a contested

case under chapter 4 of the administrative procedures act of 1969, 1969 PA 306,

MCL 24.271 to 24.288: [Bolded text proposed by AG]

(a) A rate case proceeding.

(b) A single-issue proceeding filed specifically to address adoption of an incentive

program.

(3) An electric utility or cooperative shall not file an application seeking approval of

an incentive mechanism, including financial penalties and credit increases to

customers for failing to meet threshold performance levels and for failing

to repeatedly achieve service quality and reliability standards and

national average reliability performance standards, until it has exceeded all

of the service quality and reliability standards adopted by these rules continuously

for a period of not less than within 6 months from the effective date of

implementation of the service quality and reliability standards.

[Strikethrough and addition of bolded text proposed by AG]

R 460.742 Criteria for receipt of an incentive or assessment of financial

penalties: [Bolded text proposed by the AG]

Rule 42. (1) If an electric utility or cooperative qualifies has received approval for

implementation of an previously approved incentive and financial penalty

mechanism, it shall file an application seeking authority to implement the incentive

mechanism payment and/or penalty amounts at the same time that it submits the

annual report required by R 460.732. [Strikethrough and addition of bolded text

proposed by AG]

(2) An electric utility or cooperative shall not apply for qualify to receive a financial

incentive approved by the commission unless all of the following criteria were met

during the previous 12Months calendar year: [Strikethrough and addition of

bolded text proposed by AG]

(a) All required reports have been filed in a timely manner.

(b) All required reports fully comply with the requirements as determined by the

commission.

(c) The electric utility's or cooperative’s actual performance for the year shall

have exceeded achieved an overall performance score of more than 100%

above the target level for the combined service quality and reliability

standards as defined within the incentive and penalty mechanism.

Consumer Billing Standard R 460.151(2)(a) and (b) shall also be included in

the proposed incentive and penalty mechanism. [Strikethrough and addition

of bolded text proposed by AG]

(d) The electric utility or cooperative shall have fully responded to any inquiries

about the content of the reports made by the commission or its staff in a timely

manner.

(3) The commission may impose financial penalties, as defined within the

financial incentive and penalties mechanism, for an electric utility or

cooperative failing to achieve an overall service quality and reliability

standards performance score of 100% for the year or for failing to achieve

a performance standard for three or more consecutive years. [Bolded text

proposed by AG]

The Attorney General also recommends that the commission issue guidelines to the

electric utilities and cooperatives that will guide their filing for an incentive and

penalty mechanism. The Attorney General’s proposed guidelines are outlined later

in this document.

R 460.744 (Rule 44) Customer accommodations (Bill Credits) for failure to restore

service after a sustained interruption due to gray sky and catastrophic conditions.

AG Comment/Recommendation: The proposed restoration time to trigger bill

credits to customers is set at 96 hours for catastrophic conditions or twice the stated

time of 48 hours established in the performance standards defined in R 460.722.

Similarly, for grey sky conditions, the proposed restoration time to trigger bill

credits to customers is set at 48 hours or twice the stated time of 24 hours

established in the performance standards defined in R 460.722. This doubling of

the restoration time to trigger bill credits is unjust and unfair to customers. If the

standards of performance in R 460.722 are appropriate and reasonable, then it is

appropriate to use those same standards to trigger bill credits to customers when

those performance levels are not met. Therefore, the Attorney General recommends

that the performance levels to trigger bill credits to customers be set at the same

levels as those established in R 460.722 and to eliminate the gray sky condition.

R 460.745 (Rule 45) Customer accommodations (Bill Credits) for failure to restore

service after a sustained interruption during normal conditions.

AG Comment/Recommendation: The proposed restoration time to trigger bill

credits to customers is set at 16 hours or twice the stated time of 8 hours in the

performance standards defined in R 460.722. This doubling of the restoration time

is unjust and unfair to customers. If the standards of performance in R 460.722 are

appropriate and reasonable, then it is appropriate to use those same standards to

trigger bill credits to customers when those performance levels are not met.

Therefore, the Attorney General recommends that the performance levels to trigger

bill credits to customers be set at the same levels as those established in R 460.722.

R 460.746 Customer accommodations (Bill Credits) for repetitive interruptions.

AG Comment/Recommendation: The proposed number of repetitive interruptions to

trigger bill credits to customers is set at 6 instead of the stated number of 4

interruptions in the performance standards defined in R 460.722. The higher

number of repetitive power interruptions is unjust and unfair to customers. If the

standard of performance in R 460.722 is appropriate and reasonable, then it is

appropriate to use the same number of power interruptions to trigger bill credits to

customers when that performance level is not met. Therefore, the Attorney General

recommends that the performance level to trigger bill credits to customers be set at

the same level established in R 460.722.

The Attorney General also recommends that the commission make it clear that any

bill credits paid by the utilities will not be recoverable in future rate cases.

PART 5: WAIVER AND EXCEPTIONS

R 460.751 Waivers and exceptions by electric utilities.

(3) An electric utility or cooperative need not meet the standards or grant the

credits required by parts 2 and 4 of these rules under any of the following

circumstances:

(a) The problem was caused by the customer.

(b) There was a work stoppage or other work action by the electric utility's or

cooperative’s employees, beyond the control of the electric utility or cooperative,

that caused a significant reduction in employee hours worked.

(c) The problem was caused by an "act of God." The term "act of God" means an

event due to extraordinary natural causes so exceptionally unanticipated and

widespread within the utility service area, and devoid of human agency that

reasonable care would not avoid the consequences and includes any of the following:

[Bolded text proposed by AG]

(i) Flood.

(ii) Tornado.

(iii) Earthquake.

(iv) Fire caused by other than the utility or cooperative, its employees or

agents. [Bolded text proposed by AG]

(d) The problem was due to a major system failure attributable to, but not limited

to,

any of the following:

(i) An accident caused by other than the utility or cooperative, its employees

or agents. [Bolded text proposed by AG]

(ii) A man-made disaster caused by other than the utility or cooperative, its

employees or agents. [Bolded text proposed by AG]

(iii) A terrorist attack.

(iv) An act of war.

(v) A pandemic preventing the utility, or cooperative, from performing

service restorations from a power outage. [Bolded text proposed by AG]

CONSUMER STANDARDS AND BILLING PRACTICES

The Attorney General’s comment below pertain to those sections of the consumer

standards and billing practices filed with the November 4, 2021 Commission order

in Case No. U-21150

AG Comment/Recommendation: The proposed service quality and reliability

standards removed subpart (a), (b) and (c) from Rule 460.724 with the intent to

transfer those standards to the consumer standards and billing practices Rule

460.151. It appears that R 460.724 (c) was inadvertently not transferred.

Therefore, the Attorney General recommends that this standard be added to R

460.151(2)(b) to read as follows: “An electric utility shall have a complaint response

factor of 90% or more within 3 business days.”

COMMISSION GUIDELINES FOR DISTRIBUTION SYSTEM INCENTIVE AND

PENALTY MECHANISM

AG Comment/Recommendation: To guide the development of an effective incentive

and penalty mechanism that will improve the performance of the electric

distribution systems of Michigan utilities, the Attorney General proposes that the

commission direct electric utilities to file an application as soon as possible to

implement a mechanism that includes the following metrics and meets the following

guidelines.

1. Include the service quality and reliability standards in R 460.722, R 460.723, and R

460.724.

2. Include consumer standards and billing practices R 460.151(2)(a) and (b).

3. Include the utility’s annual goal to improve the SAIDI (Excl. MED).

4. Include service restoration O&M cost per incident (three‐year rolling average, including

MED).

5. Include an annual goal to reduce the number of customers who experienced one or more

power outages during the year of 1 hour or longer.

6. Include a metric to reduce the number of power outages from trees, wind & weather.

7. Include a metric to reduce the number of power outages from equipment failures.

8. Include a metric for the number of miles of line cleared annually for vegetation for LVD

and HVD circuits.

9. Include a metric to measure performance against national average reliability performance

standards.

10. Each standard, goal, or metric should have an appropriate weight as a percentage of

100%.

11. Annually the utility or cooperative would file the actual results showing how it performed

against each individual standard, goal or metric, and a scorecard showing how it

performed on an overall basis.

12. If the overall scorecard results exceed 100% of target, the utility or cooperative would be

eligible for an incentive payment for the year.

13. If the overall scorecard results are below100% of target and/or the utility fails to achieve

a performance standard level for three or more consecutive years the utility or

cooperative would be assessed a penalty amount for the year.

14. The incentive or penalty amount should be based on a percent of the revenue requirement

included in the Company’s current rates for distribution capital investments and O&M

expense in the most recent rolling five-year period.

15. Incentive payments and penalties should have reasonable maximum amounts to minimize

the impact of an unusual or unexpected outcome. These maximums should be set as a

percentage of the target amount.

16. If properly designed no deadband range for incentive or penalty payments should be

necessary. The deadband creates a cliff problem where as soon as the deadband is

exceeded a large payout or large penalty would need to be assessed.

These guidelines include the essential standards, goals and metrics to spur the

desired improvements to the electric distribution systems of the Michigan electric

utilities and cooperatives. The number of metrics should not be so few as to

prevents achievement of the desired outcomes, or so many as to water down the

essential metrics or make the performance measurement process unwieldy. The

Attorney General’s proposed guideline strike the appropriate balance.

The Attorney General reiterates its recommendation to the commission about the

necessity to define the key outlines of an effective performance incentive and

penalty mechanism with some specificity in order to have similar mechanisms

among the utilities. The commission should direct the utilities to present a

mechanism that follows the above-proposed guidelines within 6 months from the

implementation effective date of the service quality and reliability standards. The

performance incentive mechanisms filed by the utilities and cooperatives should be

refined through a collaborative process with Staff, the utilities, and other interested

parties before final commission approval.

In summary, the Attorney General looks forward to assist the Commission and

other parties participating in this difficult undertaking to reduce power outages and

improve the reliability of electric service provided by Michigan utilities.

Sincerely,

Michael E. Moody (P51985)

Assistant Attorney General

Michigan Department of Attorney General

Special Litigation Division

cc:

All Parties

F

om

M che le eston

To

Subject

Date

ARA-M SC-EDOCKETS

Comment on Case U-20629

Tuesday eb ua

y 8 2022 10 08 03 AM

CAUTION This is an Ex ernal email. Please send suspicious emails to abuse@michigan go

Dear Michigan Public Ser ce Commissioners

I am writing to demand action from the Michigan Public Ser ice Commission in response to DTE Energy’s deadly disregard for the safe y of our communities.

We are demand ng that the M chigan Publ c Ser ice Commiss on

> Ensure that customers are compensa ed for power outages – cus omers should recei e rapid automatic bill credi s that reflect the actual costs associa ed with power outages including lost groceries & lost work.

> Make DTE pay for their poor performance – ut lities’ allowed profits should be based on their quality of ser ice relati e to na ional standards

> Requ re hat DTE prioritize safety and reliability with an explicit focus on low-income communities – to pre ent future power outages and injur es from down power lines

> Commit to rac al and economic justice in health – consider he econom c costs of health impacts caused by energy pollution n all MPSC decision-making

> Commit to supporting community-based clean energy as a reliability measure and don’t appro e short-s ghted in estments in fossil fuels.

It is time for the M chigan Publ c Ser ice Commiss on to go further to protect the entire public - not ust hose who can afford o li e in affluent communities that recei e be ter ser ice from DTE.

Yours sincerely

M

chelle Preston

F

om

To

ARA-M SC-EDOCKETS

Subject

Date

Comment on Case U-20629

Sunday eb ua

y 13 2022 5 00 46 M

CAUTION This is an External email. Please send suspicious emails to abuse@m chigan.go

Dear Michigan Publ c Ser ice Commissioners

I am writ ng to demand ac ion from the Michigan Public Ser ice Commission in response to DTE Energy’s deadly d sregard for the safety of our communities. I am a DTE customer who has experienced multiple power outages in the past 3 years that lasted o er 8 hours.

We are demanding hat the Michigan Public Ser ce Commission

> Ensure that customers are compensa ed for power outages – customers should recei e rapid au omatic b ll credi s that reflect he actual cos s assoc

> Make DTE pay for their poor perfo mance – u ilit es’ allowed profits should be based on the r quality of ser ice relati e to national standards

a ed with power outages including lost grocer es & lost work.

> Require that DTE prioritize safety and reliab lity with an explicit focus on low-income communities – to pre ent future power outages and injuries from down power lines

> Commit o racial and economic justice in health – consider the econom c costs of health impacts caused by energy pollution in a l MPSC dec

> Commit o suppor ing community-based clean ene gy as a reliabil ty measure and don’t appro e short-sighted in estments in fossil fuels.

s on-making

It is time for the Mich gan Public Ser ice Commission o go further to p otect the entire public - not just those who can afford to li e in affluent communities that recei e better ser ce from DTE.

Yours sincerely

Adrian A Laurenzi Laurenzi

Detroit Michigan 8206 Un ted States

___________________________

This ema l was sent by Adrian A Laurenzi Laurenzi ia Do Gooder a website that allows people to contact you regarding issues they consider important. In accordance w th web protocol RFC 383 we ha e set the FROM field of th s email o our gener c no-reply address at campaigns@good do howe er Adrian A Laurenzi pro ided an email addres

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edockets% 0michigan.go %7C601bdef2ebb 93f632508d9ef3c 838%7Cd5fb70873777 2ad966a892ef 7225d1%7C0%7C0%7C63780386 57696309%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC wLjAwMDAiLCJQIjoiV2luMzI LCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&amp sdata=%2BOlb%2FXtCAGDhcu%2Bf 5KzSq32crUScdOOlnOBqUGN8eU%3D&amp reser ed=0

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e

DTE Electric Company

One Energy Plaza, 1635 WCB

Detroit, MI 48226-1279

Jon P. Christinidis

(313) 235-7706

jon.christinidis@dteenergy.com

January 6, 2022

Ms. Lisa Felice

Executive Secretary

Michigan Public Service Commission

7109 West Saginaw Highway

Lansing, Michigan 48917

Re:

In the matter, on the Commission’s own motion, to establish a workgroup to review

the service quality and reliability standards for electric distribution systems and to

recommend potential improvements to the standards.

MPSC Case No. U-20629

Dear Ms. Felice:

Attached for electronic filing in the above-captioned matter are DTE Electric Company’s

Comments pursuant to the Michigan Public Service Commission’s November 4, 2021 Order in

Case No. U-20629.

Very truly yours,

Jon P. Christinidis

JPC/erb

Enc.

DTEE Comments on proposed rules

U-20629

In the matter, on the Commission’s own motion, to )

establish a workgroup to review the service quality )

and reliability standards for electric distribution

)

Case No. U-20629

systems and to recommend potential improvements )

to the standards.

)

DTE Electric’s comments on proposed

changes to Service Quality and

Reliability Standards for Electric

Distribution Systems

U-20629

1

DTEE Comments on proposed rules

U-20629

DTE Electric is fully committed to improving our customer experience and understands the

frustration and inconvenience to our customers caused by losing power. In light of that

understanding and our commitment to continue improving customer safety, reliability and

affordability, DTE Electric would like to provide the following comments on the proposed Service

Quality & Reliability Standards:

Issue #1: Performance standard for customer duration threshold during

CAT conditions in Rule 22 (b)

Many of DTE Electric ’s customers had a difficult 2021 Storm season, which was historic in all

manners of measurement. As discussed throughout the Commission’s electric reliability and

storm response technical conferences this fall, the state of Michigan expects increased severity

of weather events going forward. We are taking a comprehensive approach to improving our

grid resilience in the face of increasing storms, searching across the industry for best practices,

and engaging all employees within the Company to have an efficient and safe process to restore

customer outages due to severe weather. DTE Electric believes the trend in severe weather and

the resultant impacts on our customers requires us to develop an industry-leading storm

response process.

Large storms carry with them a variety of challenges. Protecting the public, ramping up internal

resources, and bringing in external resources are all part of our standard for responding to DTE

Electric Catastrophic-level events. While the team often ramps up these activities proactively

before the storm, they require 2 to 3 days to bring in sufficient resources from out-of-state to

restore outages with more than 70,000 customers affected (which would be defined as a

relatively small Gray Sky day based on the proposed rule). Additionally, for large storms that

impact the broader region, securing foreign crews can be especially challenging, as neighboring

utilities will often not be able to release their crews.

The proposed rules define Gray Sky conditions as 1%-10% of customers, and Catastrophic

conditions as >10% of customers. Restoring 90% of customers within 48 hours for a storm

impacting >10% of customers, is nearly impossible. In the past several years, DTE Electric has

experienced storms impacting 300,000, 400,000, even 500,000 or more customers, and

restoring this high a volume of customers is a multi-day event because of the extraordinary

number of resources that need to be mobilized. During DTE Electric’s last 3 Catastrophic

(>200,000 customers out), we were able to achieve a 90% restoration in approximately 6 days

(144 hours) on average. DTE Electric proposes to maintain the 60-hour threshold for

Catastrophic conditions, which is still a very difficult goal considering the increasing severity of

storms. Alternatively, DTE Electric proposes a lower percentage of restoration in the 48-hour

period such as 75% within 48 hours.

2

DTEE Comments on proposed rules

U-20629

Issue #2: Performance standard for CEMI metric in Rule 22 (e) and Rule

22 (f)

DTE Electric fully recognizes the customer impact of repetitive outages and the importance of

the CEMI metric as a critical measure representing the customer experience. With the

implementation of the investments identified in the 2021 Distribution Grid Plan, DTE Electric is

confident our customers will see steady and significant improvements in service reliability in

coming years. We expect to achieve second quartile SAIDI and SAIFI by 2025 and first quartile

by 2030. With that said, even under an aggressive investment scenario driving reliability

improvements, we do not expect to achieve the 6% CEMI 4 target until 2028 and 5% until 2035.

In the near-term we are accelerating our tree trimming program with the $70 million surge

investment, hiring more local labor to increase the pace of repairs and upgrades to pole-top

infrastructure, and working our plan to improve communication with our customers during

outages.

DTE Electric is concerned that the tightening of the frequency threshold as proposed does not

allow sufficient time for the Company to execute the required improvements to the distribution

grid outlined in the Distribution Grid Plan. DTE Electric has been working with the Commission

and stakeholders on an alternative proposal, that utilizes a performance-based rate making

mechanism to drive the CEMI 4 metric to a desired state. We recommend that the Commission

and stakeholders consider performance-based rate making as the appropriate mechanism to

drive improvements to the CEMI4 metric.

Issue #3: The $2/hour incremental payments for customers

experiencing long duration outage event in Rule 44

DTE Electric understands the inconvenience our customers endure during power interruptions,

particularly the loss of power for multiple days caused by severe weather conditions. DTE has in the

past voluntarily offered customer outage credits beyond utilities standards (e.g., during this

summer’s August storm and in the March 8, 2017 wind storm) as well as setting up shelters for

residents without power, delivering ice/water during summer storms and blankets/ hand warmers

during winter storms. DTE Electric is committed to continuing to provide accommodations during

these unusual circumstances above and beyond the standards’ requirements in the future while

working diligently to prevent the underlying causes and restore customers as quickly and safely as

possible.

Adding the hourly component to credit payments may introduce negative impacts to customer

satisfaction due to the additional complexity in the credit calculation and customers’ potential

lack of full understanding of how the credit is being calculated and applied. DTE Electric has

received 31 complaints regarding outage credits since August, and the vast majority of these

are due to customers not understanding the criteria. Further complicating the calculation, as

presently proposed, will drive customer dissatisfaction. For these reasons, DTE Electric has

proposed an alternative $35 per day incremental payment in lieu of the $2 per hour payment.

We would like to recommend it again for the Commission and the stakeholders’ consideration.

3

DTEE Comments on proposed rules

U-20629

Conclusion

As Public Sector Consultants noted in their February 2020 benchmarking report, which was

submitted in the comment process, the purpose of the utility standards is to define the baseline

performance for electric service. The report notes that no other state’s utility standards have

pursued, restoration duration, CEMI performance and customer outage credits in the same level of

detail that is being proposed in Michigan. The MI Power Grid Incentives/Disincentives workgroup

can address reliability concerns beyond the baseline performance which these rules address. With

this in mind, we urge the Commission to reconsider the areas we have outlined.

Respectfully Submitted,

DTE Electric Company

4

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

In the matter, on the Commission’s own motion, to )

establish a workgroup to review the service quality )

and reliability standards for electric distribution

systems and to recommend potential improvements )

)

Case No. U-20629

to the standards.

)

PROOF OF SERVICE

ESTELLA R. BRANSON states that on January 6, 2022, she served a copy of the DTE Electric

Company’s Comments in the above-captioned matter, via electronic mail upon the persons listed on

the attached service list.

ESTELLA R. BRANSON

MPSC Case No. U-20629

SERVICE LIST

MPSC STAFF

Steven D. Hughey

Assistant Attorney General

Public Service Division

7109 W. Saginaw Highway, Fl 3

Lansing, MI 48917

hugheys@michigan.gov

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

* * * * *

In the matter, on the Commission's own motion, to )

establish a workgroup to review the Service Quality )

and Reliability Standards for Electric Distribution )

Systems and to recommend potential improvements )

Case No. U-20629

to the standards.

)

__________________________________________)

In the matter, on the Commission's own motion, to )

establish a workgroup to review the Technical

Standards for Electric Service and to recommend

potential improvements to the standards

)

Case No. U-20630

__________________________________________)

COMMENTS OF THE MICHIGAN ELECTRIC AND GAS ASSOCIATION

Introduction

The MEGA companies¹appreciate the MPSC staff’s efforts to provide an open forum to discuss

and collect feedback on the myriad of issues raised as part of the review of the Grid Security and

Reliability Standards Workgroups. MEGA has engaged in the discussions to represent the unique

position of small utilities to ensure the staff and other stakeholders understand how the impacts

of potential changes can vary from that of larger utilities. These comments come from that

perspective.

Service Quality Standards (U-20629)

The MEGA companies offer the following feedback on the Service Quality Standards:

¹The MEGA companies are Alpena Power, Citizens Gas Company, Indiana Michigan Power Company, Michigan Gas

Utilities, Northern States Power-Wisconsin, SEMCO Energy, Upper Michigan Energy Resources Company, Upper

Peninsula Power Company.

Definitions (460.702)

MEGA has several comments or suggestions related to the new or modified definitions on

section 460.702.

The definition of utility in 460.702 (i) does not make it clear whether transmission-caused

interruptions should be included in its tracking and reporting or not.

Grey Sky Conditions (460.722)

In the proposed Rule 22(e) and (f), grey sky conditions are excluded from (e) and included in (f).

Annual Reporting Requirements (460.732)

The MEGA companies would appreciate the opportunity to see and comment on the staff format

for annual reporting as part of the development process. In addition, the following suggestions

apply to the reporting requirements:

• 460.732(o) should apply to worst performing segments, not circuits. Using segments will

directly point to areas of the system with repetitive issues. An exemption of this

requirement for small utilities would also be appropriate since they have relatively few

circuits and therefore the data wouldn’t provide the type of insight that might be gained

for a larger utility.

• 460.732(p) same device would be a better measure than circuit, or use CEMI, SAIDI,

SAIFI, CAIDI as better indicators state of the system overall. Similar to subsection (o)

above, an exemption for small utilities would be appropriate due to the lack of value in

the data.

• 460.732(s) consider an exemption for small utilities or recognition that some utilities

don’t have the systems capability to make this information readily obtainable or valuable.

Annual Report Momentary Outages (460.732(r))

There are several concerns with both the value of the data collected and reporting of momentary

outages as required in 460.732(r), particularly as it applies to small utilities, and especially on a

quarterly basis and MEGA would like this requirement eliminated.

First, as previously stated on this issue in the stakeholder process and in previous comments, the

data will not distinguish between “good” momentary outages that are designed into the system to

avoid widespread outages, and “bad” momentary outages that are truly a system failure and

cause for concern. Further, some small utilities do not have equipment that would collect this

data, and for some that have AMI, it is relatively new or in the implementation phase.

Second, expensive software upgrades will be required even for those that have advanced meters.

If the requirement is retained, MEGA requests an exemption for small utilities is appropriate or

having a threshold for companies with “mature” AMI based on the amount of penetration in the

system or number of years since full deployment.

Outage Credits (460.744 - 460.746)

The MEGA companies accept the increase in the amount of the outage credit, but annual

adjustments are cumbersome for small utilities.

Some MEGA utilities do not have systems in place to automate the credits which will be costly

to incorporate and may require significant manual processing. MEGA also has concerns with the

proposal that credits should be prohibited from recovery. As noted, these credits are intended to

be some compensation for customers experiencing outages but are not a penalty. Any amount

associated with these credits would be better spent on continued improvements to the distribution

system to avoid other issues in the future.

MEGA suggests the following changes:

• Revisiting the amount on a periodic basis, but five years or more would be more

meaningful to minimize short-term volatility in the number of billing system changes that

would be needed.

• Providing a date certain for the new credits to take effect. This provides certainty to both

customer and the utility, providing the utility some time to update its systems accordingly

to reflect the new credit. For example, if the commission were to issue an order in the

Fall by September 30, the new amount should give, at minimum, six months for utilities

to update their systems.

Outage Credit Thresholds – Repetitive Interruptions (460.746)

The reduction of the threshold of same circuit repetitive outages in 460.746 should include an

exemption for rural utilities that keeps the threshold at 7 or identify a threshold of customer

complaints for small/rural utilities with a required report about how the issue will be addressed.

No basis has been provided to support the need to change this number or the specific reduction

proposed.

Technical Standards for Electric Service Rules (U-20630)

Annual Line Clearing Report (460.3203(i))

MEGA appreciates the accommodation for small utilities from having to file a quarterly line

clearing report. As discuses in prior comments, the line clearing plans included in the small

utility rate cases have not been a source of controversy or concern. The level of data requested,

and quarterly reporting would require a significant amount of manual work to report.

MEGA notes that the customer threshold for defining a small utility has traditionally included all

the MEGA members, and MEGA requests that the customer count threshold be increased to

recognize that longstanding principle.

Solid State Meter Reporting: (460.3203(j))

Some small utilities have not yet adopted and/or are early in the process of adopting solid state

meters. As such, the requested data is either not available or data systems not currently structured

to collect or report the data as stated in the rule.

MEGA requests either an exemption for small utilities, limiting the data required to subsection

(ii) that describes how the small utility uses the data, or threshold of time after adoption of solid-

state meters would be an appropriate accommodation for small utilities.

Extension of Electric Service: (460.3411(16))

MEGA maintains the addition of this new requirement is unnecessary. Utilities should remain

responsive to customer requests for meetings and adding language to this Rule implies that there

remain unresolved issues with Rule 411. There have been court decisions and law changes in

recent years that have provided clarification of some gray areas, but at this time, the rule and

framework surrounding it are understood and working well. MEGA does not believe any

revisions are necessary.

Conclusion

MEGA reiterates its thanks to the Commission and the staff for their engagement on these topics

and consideration of these comments.

Sincerely,

Dated: January 6, 2022

Daniel Dundas

President

Michigan Electric and Gas Association

January 6, 2022

Ms. Lisa Felice

Executive Secretary

Michigan Public Service Commission

7109 W. Saginaw Highway

Lansing, MI 48917

Re: Case U-20629

In the matter, on the Commission's own motion, to establish a workgroup to

review the Service Quality and Reliability Standards for Electric Distribution

Systems and to recommend potential improvements to the standards.

Case No. U-20629

Dear Ms. Felice:

Enclosed for filing in the above-referenced matter, please find the Comments of the

Citizens Utility Board of Michigan. If you have any questions, please do not hesitate to contact

me.

Sincerely,

Amy Bandyk

Executive Director

Citizens Utility Board of Michigan

Citizens Utility Board of Michigan I 921 N. Washington Ave., Lansing, MI 48906 I www.cubofmichigan.org

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Case U-20629

In the matter, on the Commission's own motion, to establish a workgroup to review the Service

Quality and Reliability Standards for Electric Distribution Systems and to recommend potential

improvements to the standards.

COMMENTS OF THE CITIZENS UTILITY BOARD OF MICHIGAN

The Citizens Utility Board of Michigan is submitting these comments in response to the order

U-20629-0055 issued on Nov. 4, 2021 that requested “written comments, suggestions, data,

views, questions, argument, and modifications concerning the issues” surrounding the proposed

amendments to the service quality and reliability standards. We appreciate the opportunity to

make recommendations to the Commission on this important topic. We offer extensive

comments below.

I. The Commission should not squander this opportunity to have a

meaningful impact on electric utility reliability.

It is well-established that Michigan electric utilities have for many years provided customers with

relatively poor reliability, with outage frequency as measured by System Average Interruption

Frequency Index (SAIFI) somewhat above national median, outage duration as measured by

Customer Average Interruption Duration Index (CAIDI) amongst the worst in the country, and

total annual outage experience as measured by System Average Interruption Duration Index

(SAIDI) essentially always in the fourth quartile and often much worse than the 25^thpercentile.

This poor performance characterizes the performance of Michigan utilities when either including

or excluding major event days (MEDs). Graphs and tables illustrating this performance were

1

included in a recent report by the Citizens Utility Board of Michigan, available from 2021 Utility

Performance Report_CUB of MI.pdf. The relevant graphs and tables are attached to these

comments as Appendix A. A comprehensive perspective on recent average performance of

Michigan’s electric utilities is provided in the following graphs.

2

As can be seen in the tables in Appendix A, this level of performance by Michigan utilities has

been persistent since 2013 when national recordkeeping on these topics was initiated by the US

Department of Energy’s Energy Information Administration. We also know from prior information

accumulated by a committee of the Institute of Electrical and Electronics Engineers (IEEE),

which is no longer readily available for reference, that this level of comparative performance by

DTE and Consumers Energy extends well back into the 20^thcentury.

This Commission has repeatedly investigated, solicited Staff reports, solicited utility plans, and

instructed utilities to do better in providing reliable electrical service to their customers. A partial

history of these efforts includes:

1991 Investigation in U-9916

1995 Investigation in U-10908

1999 Staff Report

2000 Investigation in U-12269

2001 Initiated Adoption of Service Quality Standards

2002 Requirement for utilities to provide Service Quality Plans

2004 Adopted Service Quality Standards

2004 Investigation of Vegetation Management Practices in U-13975

2007 DTE Service Quality Plan litigated in U-15244

2007 Staff investigation of undergrounding in U-15279

2008 Investigation in U-15606

3

2009 Reliability Reporting Requirements adopted in U-16065 and U-16066

2010 Investigation in U-16462

2011 Consideration of outage management in Smart Grid Collaborative

2014 Investigation in U-17542

2017 Investigation in U-18346

2018 Investigation in U-20169

2019 Statewide Energy Assessment

2020 MiPowerGrid Review of Technical and Quality Standards

Throughout this history, the reliability performance of Michigan’s major utilities has not materially

improved. However, it is worth noting that after a major ice storm caused widespread and

long-duration outages for customers of the Lansing Board of Water and Light, recommendations

from a citizens review committee and replacement of the General Manager led to rigorous tree

trimming on a 5-year cycle beginning in 2015, with the results shown in the following graph:

This case demonstrates that, with appropriate effort, a utility can make a material improvement

in reliability.

The MPSC Staff’s proposal for revisions to the service quality and reliability standards

accomplishes the bare minimum of fixing the obviously irrational problems with the existing

standards, such as the lack of automatic credits. But the proposal does not go much above that

4

floor and misses many opportunities to substantially improve consumer protections and

enhance reliability.

CUB’s view is that this round of amendments to the Commission’s Service Quality and

Reliability Standards is likely the last opportunity for potentially many years for the Commission

to establish a just and reasonable framework for improving the poor reliability of electric utility

service in Michigan. The standards have not been updated since 2004. Once this review

process has finished, it will be very unlikely the standards will be changed again for quite some

time. That means that for years, as severe weather events continue to increase and put

additional pressure on the grid, utility customers will be locked into what the Commission

decides here.

The Staff proposes some commonsense changes, such as requiring the utilities to offer credits

to customers in an automatic and transparent process and updating the base credit from $25 to

$35 to account for inflation, plus a very modest and limited variable credit (which we will address

in more detail in these comments.) But these proposals have all been on the table for about a

year (since the final Staff report was released). Since then, reliability has become a much bigger

concern for Michigan residents due to the widespread power outages in the summer of 2021.

If the Commission simply approves the recommendations in the Staff report, it will appear as if

the events of the summer had little to no impact on the Commission’s views about the urgency

of reliability. It seems hard to believe that the impact on customers from the power outages this

summer would not push the Commission to be more ambitious.

CUB argues that, instead, the Commission should seize this rare moment where the impetus is

behind revising these rules for the first time in about 20 years and use that momentum to put

Michigan on a path for improved reliability. We urge the Commission not to squander this

opportunity, but rather to further revise these proposed amendments to its Service Quality and

Reliability Standards before proceeding with the adoption of these rule amendments.

There are three main areas where the Commission should harness the momentum: First, the

Commission should adopt a credit that is based on the costs of service interruptions as informed

by research on the economic cost of outages, and is not just an arbitrary amount. Second, the

proposed use of a “gray sky” category to determine bill credit eligibility takes the standards

backwards and needs to be amended. The standards should be expanding the number of

residents eligible for credits, not reducing the number. Finally, the Commission should ensure

the standards reflect Michigan’s current level of poor reliability and thus are designed to

incentivize utilities to work harder to reduce outages, and not reward utilities for unfocused or

insufficient progress in improving reliability.

Following the primary text of the comments we show CUB’s proposed redlines to the rules.

5

II. The Commission should require utilities to collect data to support future

redetermination of customer interruption costs.

We argue below that customers should receive bill credits for service interruptions that are

commensurate with the costs to customers of service interruptions. First, however, we assert

that it is important for the Commission to have accurate knowledge of customer interruption

costs even if that information is not used to establish bill credits, that current estimates are not

adequate, and that the Commission should therefore provide in these rules for the necessary

accumulation by utilities of data needed to improve estimates of the cost to customers of service

interruptions.

As the Commission is well aware, Michigan utilities are planning substantial distribution system

spending, significantly justified by the need to improve service reliability.¹The Commission has

already recognized the importance of benefit-cost analysis in relation to distribution system

planning, soliciting stakeholder discussion and Staff reports on this topic. Most recently, Staff

reconvened stakeholders for a November 3, 2021 technical conference on benefit-cost analysis,

on which the Staff reported on December 22, 2021. A portion of that technical conference was a

presentation on the Interruption Cost Estimate (ICE) Calculator, which has been used by

Michigan utilities to estimate benefits of improved reliability, by Joseph Eto of the Lawrence

Berkeley National Laboratory, who has long been a leading researcher on this topic. The Staff

summary of his presentation is in part that:

There are some challenges and limitations to the ICE Calculator. The currently used

surveys are old and outdated. The surveys are from 1980-1990 and represent a time

when many people did not work at home. Not all utilities or regions of the country are

represented by the surveys. The surveys are designed around shorter duration

interruptions and their use is not recommended for interruptions lasting longer than 24

hours.

There is a plan to update and upgrade the ICE Calculator at the beginning of next year.

It would include the development of a consistent set of short duration, customer

interruption cost survey questions including some to understand customer behavior

during widespread, longer duration 6 interruptions. It would coordinate the administration

of surveys to ensure the results are statistically representative of all US regions and

customer classes. It would also include new information and improvements to design

and performance. Sponsoring utilities’ responsibilities in the update is to provide funding,

support survey administration and sampling of customers, and provide feedback on ICE

Calculator improvements to Berkeley Lab.²

¹See utility distribution system investment plans in docket U-20147.

²See page 5 of the Staff report at

https://www.michigan.gov/documents/mpsc/BCA_Report_122121_FINAL_2_744216_7.pdf

6

The particular deficiencies of the ICE calculator presented by Eto are especially relevant in

Michigan where we have a history and continuing problem of widespread, longer duration

outages. Standard economic reasoning suggests that because customers have fewer options to

mitigate the effects of an outage when it is widespread and/or of long duration, the costs to a

single customer of an outage will increase with the scale of the outage and accelerate with the

duration of an outage. It follows that the estimates produced by the ICE Calculator understate

the outage costs experienced by Michigan utility customers.

This deficiency of information to support valid benefit-cost analysis is not only a problem at this

moment, but one that will endure, as it will likely take a considerable time to improve distribution

system reliability in Michigan and the problem of distribution reliability will be exacerbated by

climate change. We therefore recommend that the Commission create a new rule in this rule set

that gives the Commission clear authority and assigns utilities a clear responsibility to

accumulate and provide to the Commission and stakeholders the data necessary to accurately

analyze the economic value to customers of electricity service interruptions. The Commission

could then make initial use of that authority to require Michigan utilities to participate in the

Berkeley Lab’s plan to improve the ICE Calculator. We propose the following rule:

“R 460.xxx Determination of the customer cost of service interruptions

(1) The commission may adopt on its own motion standard service interruption survey

instruments and procedures for the purpose of obtaining data about the customer cost of

electric service interruptions.

(2) Following each service interruption event experienced by customers of an electric utility

or cooperative, the electric utility or cooperative shall survey affected customers as

prescribed by the Commission’s standard service interruption survey instruments and

procedures. Not later than March 1 of each calendar year, each electric utility or

cooperative shall convey to the commission in a form and manner prescribed by the

commission all data accumulated by the electric utility or cooperative through such

surveys, excluding data that identifies the respondent customers. Such data will be

made available to researchers and stakeholders by the commission.

(3) Within one year of the effective date of the amendments to these rules and not less than

once every three years thereafter, the commission will open a docket for the purpose of

establishing appropriate formulas and values to determine the customer costs of

electricity service interruptions that are to be used by electric utilities in reporting service

interruptions and in analyses of utility investments in distribution system reliability.”

III. Initial valuation of customer interruption costs

Economists have estimated the cost of outages through a combination of methods, such as

surveys of customer behavior and computer modeling of changes in general equilibrium from

7

power outages.³Lawrence Berkeley National Laboratory and Nexant have entered dozens of

datasets of various surveys estimating interruption costs into a meta-analysis that was used to

develop the econometric model behind the ICE Calculator.

We entered Michigan-specific data into the ICE Calculator⁴and it produced a total cost to

residential customers of $78.55 million for that CAIDI/SAIFI combined score, or $17.85 per

customer. With average restoration time (CAIDI) at nearly six hours, that cost comes out to

about $3 per hour.

The ICE Calculator model is partially based on willingness-to-pay surveys, which ask

participants for the maximum price they would be willing to pay for a product or service. Other

estimates more specifically produced by willingness-to-pay surveys have estimated residential

costs of power outages at $4.4 per hour⁵and $0.07 per minute, or $4.2 per hour.⁶

Willingness-to-pay estimates, however, should be viewed as a lower-bound estimate for cost of

outages. Since electricity is a basic necessity, the willingness-to-pay for electricity is, relative to

share of income, comparably higher for low-income customers than it is for moderate or

high-income customers. Their willingness-to-pay is so relatively high, in fact, that it at times

outstrips their ability to pay. This reality can be observed by the amount of low-income

customers who go into arrears on their electric bills, as well as through empirical studies of the

sacrifices low-income customers make to be able to pay for power. Willingness-to-pay studies

cannot capture the full value of electricity to customers of lesser means.

In summation, the above sources have estimated $3 to just over $4 as a reasonable hourly cost

of outages for residential customers, and those estimates should be used as lower bounds due

to the aforementioned issues with willingness-to-pay surveys when applied to electricity.

Aside from the use of outage-duration thresholds, which we discuss below, the Staff proposal to

use $2 per hour for residential customers appears to be materially less than the marginal

residential customer cost of outage duration. CUB previously proposed $2 per hour for all hours

of outage as a more reasonable value than the amounts used in the current rules. The evidence

suggests that CUB’s proposal of $2 per hour for all outages is very conservative, and likely too

low. CUB recognizes, however, that when introducing a sharp change from the status quo, it is

prudent to be conservative at the outset. Therefore, we also recommend that the MPSC order a

³Baik, Hanus, Sanstad, Eto and Larsen (2021). A Hybrid Approach to Estimating the Economic Value of

Enhanced Power System Resilience. Lawrence Berkeley National Laboratory.

https://www.researchgate.net/publication/349746078_A_Hybrid_Approach_to_Estimating_the_Economic_

Value_of_Enhanced_Power_System_Resilience

⁴4.4 million residential customers, CAIDI: 356, SAIFI: 1.5, all numbers from CUB Utility Performance

report

⁵Hartman, Doane, Woo (1991). Consumer Rationality and the Status Quo. The Quarterly Journal of

Economics.

⁶Collins, Sullivan, Schellenberg and Bieler (2019). Southern California Edison: 2019 Value of Service

Study. Southern California Edison Workpapers.

8

regularly scheduled review process for the value of the credit, so stakeholders can further refine

the estimate and make it better conform to customer experience. We recommend that the

proposed rules be changed to provide an initial bill credit for residential customers based on $2

per hour, but that the rules authorize and require the Commission to update that value based on

evidence.

We also note that Staff did not propose a change in the bill credits for business customers,

which is essentially capped at a proportion of the customer’s monthly fixed charge. This amount

is generally radically less than the business customer cost of service interruption shown in the

available evidence. Due to the variability of business customers both as to size of load and the

sensitivity of the business to outages, the Commission will likely need to use a different

approach than a bill credit based on outage duration. We recommend the Commission engage

business customers in consideration of bill credit design for those customers.

IV. To be effective, bill credits must be automatically paid to customers

Current rules provide that bill credits are to be paid only to customers “that notify the utility of the

interruption.” Unfortunately, it is clear from the available record that bill credits available to

customers under the current rules are rarely paid to customers, with Consumers Energy

apparently crediting customers for less than 1% and DTE crediting customers only around 5%

of the bill credits for which customers were eligible.⁷Indeed, it is unclear that bill credits are paid

by some utilities to customers who “notify the utility of the interruption” unless the customer

requests the bill credit.

Given that customers receive bill credits at such low rates, it is simply implausible that bill credits

serve any policy purpose.

At the time the current rules were adopted in 2004, it was plausible to argue that a utility would

not necessarily know of an outage or of the duration of an outage unless notified by the

customer. With the advent of advanced metering and other grid sensors, a utility should know of

an outage contemporaneously with its start and should have metered records of the start and

end times of an outage. It is therefore practical for the utility to automatically credit customers for

outages on the same schedule as it bills for power usage.

We strongly support the Commission’s proposed amendments to require an electric utility to

automatically credit customers for outages when the customer is eligible for credit.

⁷Testimony of Douglas Jester on behalf of Michigan Environmental Council in Cases U-20134 and

U-20162

9

V. The Commission should establish outage bill credits that reasonably

reflect its best estimates of the customer costs of service interruptions,

rather than limit credits based on the concept that they are penalties

As embodied in current rules and the proposed amendments thereto, bill credits serve primarily

as a form of penalty for “unacceptable service,” standards for which are defined in the existing

rules and would be modified by the proposed amendments; credits are payable only to

customers who experience “unacceptable service” as prescribed by the rules and in amounts

that that have no established relationship to the customer costs of service interruptions. Nothing

in the Commission’s stakeholder process or in the Commission’s records indicate that the

standards for “unacceptable service” were proposed in light of evidence about the levels of

service that can cost-effectively be achieved by a utility. Consequently, both the standards of

service and the amounts of bill credits are essentially arbitrary.

The Commission should not view bill credits as penalties for “unacceptable service.” Rather, bill

credits should be viewed as an instrument by which customers are partially insured against the

costs of service interruption, partial redress for inequities amongst customers in electric utility

service reliability and restoration, and as a key tool for performance-based regulation of utility

distribution system reliability. Through provisions regarding utility revenue recovery for bill credit

liabilities, the Commission can determine the degree to which bill credits serve as penalties for

“unacceptable service,” without limiting customer bill credits to instances of “unacceptable

service.” Much of the usefulness of bill credits depends on unlinking bill credits from exclusive

treatment as a penalty for the utility. The usefulness of bill credits as insurance, for redressing

inequities, and as a tool for performance-based regulation is optimized when bill credits closely

reflect the customer costs of service interruptions.

There is no doubt that most electric utility customers suffer economic harm because of electric

service interruptions and that that harm exceeds the customer’s avoided payments for electricity

that is not delivered to the customer. Electric utilities have both a natural and a legal monopoly

in the provision of electricity distribution services to customers in Michigan, so customers are

stuck with the level of distribution reliability provided by their utility. Customers have some

options to defend against lack of electric distribution reliability through use of on-site power

supply resources, but these are comparatively expensive, are not physically and economically

accessible for all customers, and in some cases are discouraged or limited by utilities and

Michigan regulatory policy. Thus, most customers must suffer the consequences of electricity

service interruptions and either suffer harms or make expenditures to mitigate those harms by

replacing lost food, eating out, finding alternative lodging, etc. Lost work time either costs the

employer in lost productivity or the person in lost income.

We could, as a society, provide optional insurance for utility customers to recover a portion of

these costs but this is generally not done for small customers because of the marketing and

10

transaction costs that would be involved. Furthermore, an approach wherein each customer

must either provide their own insurance or mitigate the costs of service interruption necessarily

burdens those customers who, through no fault of their own, have the worst service reliability

and they generally do not have control over their service reliability. Thus, separating the

financing of insurance or mitigation of harm from the financing of utility service just adds insult to

injury for those who experience poor reliability. We think that reasonable provisions for bill

credits that offset a significant portion of the harms and/or mitigation costs of electricity service

interruptions would be welfare-improving.

Providing bill credits for customer service interruptions does not increase electricity bills. To the

extent that bill credits are not recoverable by the electric utility, bill credits will constitute a bill

reduction and a utility incentive to cost-effectively reduce service interruption; we further discuss

these aspects of bill credits below. To the extent that bill credits for customer service

interruptions are recoverable by the electric utility by, for example, being included in distribution

rates per kWh, that revenue is also paid out to customers in the form of bill credits. The net

effect of rate-recoverable bill credits on customer bills is zero, but those customers who

experience reliable service pay more and those customers who experience service interruptions

pay less than they would in the absence of bill credits. Bill credits that are not rate-recoverable

provide a bill reduction to customers who experience service interruptions.

If service interruptions are essentially random, then rate-recoverable bill credits serve simply as

insurance. If service interruptions are not really random but instead reflect geographic variation

in utility infrastructure and performance, then both non-recoverable and rate-recoverable bill

credits provide more equitable electric service and bills. The commission has limited formal

evidence regarding inequities in electric service but substantial reasons to assume that there is

significant inequity amongst customers. Underground distribution and service lines are well

known to provide more reliable service than overhead distribution and service lines and portions

of each utility service territory are overhead and other portions are underground but with

customers in the same class paying the same ongoing rates for distribution without regard to

whether they are served by underground or overhead facilities.⁸The Commission has long

required utilities to report “worst circuits,” a concept that has meaning only if reliability is not

uniform and is therefore in some sense inequitable. Recent utility reports filed in docket U-21122

provide maps showing significant geographical inequities in distribution system reliability.

There is also good reason to believe that inequities in electric service reliability are correlated

with income. Newer suburbs were developed after underground facilities became the norm and

low-income communities are typically located in the older portions of towns and metropolitan

areas. Distribution systems are upgraded when required by load growth so that growth areas

tend to have new and improved distribution facilities that are likely more reliable but low-income

communities are typically located in areas where load is not growing.

⁸We acknowledge that the costs of initial construction of underground facilities as compared to overhead

facilities are largely addressed through payments at service installation, but this practice falls far short of

providing for accurate cost allocation and does not address the differences in reliability experience.

11

We therefore conclude that a system of bill credits, whether recoverable in utility revenue or not,

will provide a valuable blend of insurance against the harms caused by service interruption and

more equitable utility services and rates. Note that in Section X, below, we articulate a standard

for recovering bill credits based on performance relative to an external standard. Setting bill

credits at such a level will beneficially provide customers with appropriate insurance against the

harms or mitigation costs of outages, reduce inequities in service quality and bills as between

customers with different reliability experiences and likely improve equitability in relation to

individual and community income. Used in conjunction with allowance for rate recovery of bill

credits, bill credits will provide a key tool for implementing performance-based regulation of

utility distribution system reliability. We strongly urge the Commission to change the proposed

rules to align bill credits with the customer cost of service interruptions.

It is obvious that both the insurance and equity-improvement of a system of bill credits are best

served if bill credits reasonably approximate the customer costs of electricity service

interruption.

VI. The Commission should penalize and incentivize utilities through the

cost recovery of bill credits, not through the bill credits themselves

We next discuss the degree to which bill credits should be recoverable by the utility and the

mechanisms by which bill credits provide a key tool for performance-based regulation. In effect,

the Commission can determine the degree to which bill credits function as a penalty without

limiting the amount of bill credits or the circumstances in which they are paid.

The utility’s ability to fully recover the costs of bill credits back through customer rates weakens

any incentive effects on the utility of the obligation to provide bill credits. The ability to recover a

portion of the bill credit costs also weakens the incentive effect, although less so the farther the

portion is from 100%. On the other hand, if recovery of bill credits is based on a performance

standard that is fixed with respect to the utility’s actual performance, then the full amount of bill

credits per outage event serves as an incentive to the utility to reduce outage frequency or

duration. If the utility provides service that is worse than the fixed standard, then bill credits will

exceed recovery and will be a penalty for the utility. If the utility provides service that is better

than the fixed standard, then recovery based on the bill credits that would be paid under the

fixed standard will exceed actual bill credits and the utility will receive excess revenue and a

positive incentive. If the fixed standard is understood to be either permanent or slowly evolving,

then the expected net present value of avoided bill credits becomes an explicit benefit to the

utility for improving reliability. If the amount of the bill credits reasonably approximates the

customer costs of service interruption, then the net present value of avoided bill credits is a

good proxy for customer benefits of reliability improvements. A comparison of the costs of the

12

avoided bill credits to the costs of reliability improvement can be an effective benefit-cost test for

those reliability improvements. For these reasons, bill credits are a most effective tool for

performance-based regulation if they reasonably approximate the customer costs of service

interruptions and are not recoverable in proportion to bill credits paid out.

A Commission decision to establish bill credits that reasonably approximate the customer costs

of service interruptions leaves open the question whether the revenue allowed to offset bill

credits is structured so that utilities are penalized for their existing poor performance or provided

an opportunity to earn additional earnings to equity. If for example, the revenue allowance for bill

credits was set at the current expected level of bill credits (or higher), then the utility would only

experience a positive incentive in that reduced outages would produce reduced bill credits

which would increase utility earnings. Setting revenue allowance for bill credits at zero would

mean that the utility would always experience bill credits as a penalty, though that penalty would

be reduced by reliability improvements. Selection of any intermediate standard of performance

as the basis for setting a revenue allowance for bill credits would create an initial penalty for

currently poor performance but provide the utility the opportunity to reach incentive earnings

through improved performance. The following graph illustrates that the Commission can

establish the relative use of penalties and incentives by the way in which rate recovery is

allowed, while providing bill credits that fully reflect the customer cost of service interruptions.

We therefore conclude that concern about utility financial results need not be a bar to applying

bill credits that reasonably approximate customer costs of service interruption. Setting bill credits

at such a level will beneficially provide customers with appropriate insurance against the harms

or mitigation costs of outages, reduce inequities in service quality and bills as between

customers with different reliability experiences and likely improve equitability in relation to

individual and community income. Used in conjunction with allowance for rate recovery of bill

credits, bill credits will provide a key tool for implementing performance-based regulation of

utility distribution system reliability. We strongly urge the Commission to change the proposed

rules to align bill credits with the customer cost of service interruptions.

13

We also draw the Commission’s attention to the way in which use of bill credits for

performance-based regulation helps to focus utility activity to improve reliability. Simply, a utility

seeking to avoid bill credits because of the incentive effects of a performance-based regulation

mechanism such as we propose will naturally focus on measures that are directly tailored to the

avoidance of bill credits. This will include measures that reduce outage duration and not just

efforts to avoid outages. The utility will focus on both the geography and distribution system

components that are likely causes of outage. Bill credits as a tool for performance-based

regulation would also create nearly as much incentive for operations and maintenance

expenses as for investments, reducing the capital bias that we observe in current distribution

system investment plans. In contrast, we believe that the most recent round of distribution

system investment plans proposes expenditure patterns that are significantly less focused than

we would expect under a performance-based regulatory mechanism that is based on bill credits.

VII. Limiting bill credits to customers that experience “unacceptable

performance” undermines the effectiveness of bill credits for any purpose

CUB stands by its proposal in previous comments that the credit should initially be a simple per

hour credit that applies to all sustained interruptions (those that last more than five minutes) in

all grid conditions.

The $25 flat credit for unacceptable performance in the existing rules has no rationale behind it,

as all parties seem to have agreed in the lengthy discussions throughout 2020 in the Service

Quality and Technical Standards workgroup. The proposal to update the credit to $35 to account

for inflation, therefore, retains the same flaw as found in the original credit. The lack of rationale

is perhaps best demonstrated by considering the Customer Average Interruption Duration Index,

which measures the average time a customer is waiting for power to be restored after an

interruption. The thresholds that the Staff have chosen for bill credit eligibility compare

unfavorably to the CAIDI score of 356 minutes for Michigan utilities, or 5.93 hours. With a

customer not receiving a credit until 16 hours under normal grid conditions, 48 hours under gray

sky conditions and 96 hours under catastrophic conditions, Michigan customers would never

qualify for credits under the vast majority of outages, despite the material economic harm that

can come from outages that last well below 16 hours, much less 48 or 96 hours.

However, based on the available evidence that a residential customer experiences

approximately a $3 per hour cost of service interruption and with bill credits as provided in the

proposed rules, a customer that experiences just under a 16-hour service interruption normal

grid conditions has a cost of approximately $42 but would receive no bill credit and a customer

that experiences just over a 16-hour service interruption under normal grid conditions similarly

experiences a cost of approximately $42 but would receive a $35 bill credit. A customer that

experiences just under a 48-hour service interruption under gray sky conditions has a cost of

14

approximately $144 but would receive no bill credit and a customer that experiences just over a

48-hour service interruption under gray sky conditions similarly experiences approximately $144

in costs but would receive a $35 bill credit. A customer that experiences just under a 96-hour

service interruption under catastrophic conditions has a cost of $288 and would not receive a bill

credit and a customer that experiences just over a 96-hour service interruption under

catastrophic conditions has a cost of $288 but would receive a bill credit of only $35.

While the Staff’s idea of the credit increasing hourly after a certain threshold has been passed

pushes the credit in the right direction, the use of thresholds based on the proposed definitions

of “unacceptable performance” clearly fails to provide bill credits that will provide any material

insurance function for customers, fails to address inequities in outage experiences as between

customers, and fails to provide a useful tool for performance-based regulation. Furthermore, we

do not believe that a system of credits based on large outage-duration thresholds can be made

to provide those potential functions of a system of bill credits. While using a short outage

duration such an hour as a “deductible” for bill credits would likely fit with an insurance

perspective for most outages, it would fail to provide either insurance or utility incentives for

customers who experience repeated temporary outages. We urge the Commission to apply bill

credits to all sustained service interruptions (excluding momentaries) and to make those bill

credits generally proportional to or increasing in the duration of the service interruption.

VIII. The Commission should not use the “gray sky conditions” category as

proposed to determine bill credit eligibility.

The “gray sky” conditions proposed by staff can refine data collection about outages by

capturing a middle category of grid conditions that are neither normal nor catastrophic. While we

support the concept of the “gray sky” category for data collection, the staff’s proposal as is

should not be used to determine credit eligibility.

The staff’s proposal would create a new missing middle group of customers who currently

qualify for credits but would not under the new rules: customers who lose power for more than

16 hours but less than 48 hours under gray sky conditions. Under the current standards, that

situation would be considered normal grid conditions, and those customers would be eligible for

credits. Given the severity of the reliability problem in Michigan, as seen this summer, this is not

the time to be making it harder for customers to qualify for credits.

CUB’s proposal avoids these problems entirely by using the same standard for credit eligibility

regardless of grid condition. Another option would be to simply revise the threshold for gray sky

conditions from 48 to 16, the same threshold as the staff’s proposal for normal conditions.

We recommend the Commission not use the gray sky conditions category for bill credit eligibility.

A very simple way to implement this recommendation is to set the credit at a fixed dollar rate per

15

hour, as we advocate above. Alternatively, it should allow customers whose power is out for 16

hours or more to be eligible for a bill credit under gray sky conditions.

IX. The Commission should not base utility performance-based regulation,

bill credits, nor revenue allowances for bill credits on performance

standards as lax as those in the proposed rule.

The existing rules, only slightly modified by the proposed amendments, allow a utility that meets

all of the performance standards in the rules to seek an incentive plan from the Commission that

would reward the utility for its performance (Rule 460.741) The existing performance standards

would allow a utility to seek incentive revenue when up to 10% of the utility’s customers who

experience sustained service interruptions have service interruptions that exceed what the

rules otherwise deem to be “unacceptable performance.” The proposed rules would further relax

the standards by allowing utilities to seek incentive revenue even if up to 10% of customers lose

power for more than 4 days under “gray sky” conditions. While we think it unlikely that the

Commission would actually authorize incentive revenue for a utility that had these performance

levels, this illustrates how inadequately these rules are formulated as performance-based

regulation.

Although there is not a straightforward way to model these standards in relation to the widely

available SAIDI, SAIFI, and CAIDI statistics to compare Michigan utilities to those in other

states, we believe that a utility satisfying the performance standards in the proposed rules could

still have reliability performance that is amongst the worst in the United States. We note that the

record in support of this rulemaking does not even include a calculation whether Michigan

utilities currently satisfy all of the proposed standards for acceptable performance, despite their

currently very poor ranking in comparison to utilities in the rest of the United States. Although

there is no current reporting using the “gray sky” conditions defined and used in the proposed

rules, our review of the available evidence on outage frequency and duration suggests that

Michigan utilities would currently qualify for an incentive plan under the proposed rules.

We provided evidence above that basing bill credits on the proposed outage thresholds means

that customers may experience very substantial harms without qualifying for a bill credit and that

the proposed bill credits will often fall far short of the level of harm experienced by customers.

This poor alignment of bill credits with harm is primarily due to the use of these “unacceptable

performance” standards as the basis for bill credits. As noted above, this problem is

exacerbated by the Staff’s proposed addition of a “gray skies” condition to the rule.

For the same reasons, the proposed “unacceptable performance” standards should not be used

as the basis for determining the revenue allowed a utility for recovery of bill credits.

16

We urge the Commission to unlink bill credits and incentives from the list of “unacceptable

conditions” in the draft rules. We also urge the Commission to direct Staff to provide an analysis

of whether meeting the proposed “unacceptable conditions” will materially improve current

electric utility reliability in Michigan.

X. If the Commission adopts a performance-based regulation method

based on an allowance for bill credits in rates, the allowance should be

based on national average performance.

Based on our experience of the regulatory process, if the revenue allowed a utility for recovery

of bill credits is not based on an external reference but is instead “negotiated” with the

Commission, we think it likely that the Commission will start with an approach that is meaningful

but that utilities will gradually render it ineffective or one based on positive incentives alone. We

therefore strongly urge the Commission to apply an external reference in these rules.

Given the current poor reliability performance of Michigan’s utilities, we do not support an

approach to performance-based regulation that only provides a positive incentive. Furthermore,

most strategies proposed by utilities in their recent distribution investment plans and in rate

cases attempt to improve reliability through additional capital investment that has the effect of

increasing utility profits. Thus, a positive incentive would simply add to those profits and the

associated increase in rates. We therefore strongly urge an approach that would initially result in

a net penalty for the poor performance currently achieved by Michigan utilities.

Since improving reliability is likely to include investments that increase utility profits, we are

inclined to achieve some symmetry by treating all bill credits as penalties. However, we

anticipate that would inevitably lead to other utility accommodations, such as an increase in the

authorized return on equity. We therefore recommend an approach that is symmetric, uses an

external point of reference, and allows the standard to evolve as climate, technology practices,

and technology evolve. We recommend that the Commission authorize revenue allowance for

bill credits based on national average reliability of investor-owned utilities. This will begin as a

penalty for the current poor performance of many Michigan utilities but enable them to reach a

level of performance that provides additional earnings by outperforming their peers.

Redlines

DEPARTMENT OF LABOR AND ECONOMIC GROWTH

17

PUBLIC SERVICE COMMISSION

SERVICE QUALITY AND RELIABILITY STANDARDS

FOR ELECTRIC DISTRIBUTION SYSTEMS

(By authority conferred on the public service commission by section 10p of 2000

PA 141, section 7 of 1909 PA 106, section 5 of 1919 PA 419, sections 4 and 6 of 1939

PA 3, and sections 3, 9, and 231 of 1965 PA 380, MCL 460.10p, 460.557, 460,55,

460,4, 460.6, 16.103, 16.109, and 16.331)

PART 1. GENERAL PROVISIONS

R 460.701 Application of rules.

Rule 1. (1) These rules apply to electric utilities as defined by MCL 460.562(e) and

cooperative electric utilities that are member regulated as provided in 2008 PA 167.

(2) These rules do not relieve an electric utility that is subject to the jurisdiction of

the public service commission from any of its duties under the laws of this state,

including all of the requirements of R 460.3101 to R 460.3908.

History: 2004 AACS.

R 460.702 Definitions.

Rule 2. As used in these rules:

(a) "All conditions" means conditions reflected by data derived through the

amalgamation of data from normal conditions, gray sky conditions and catastrophic

conditions. "All conditions" does not mean only normal conditions or only gray sky

conditions or only catastrophic conditions.

(b) "Answer" means that a utility representative, voice response unit, or automated

operator system is ready to render assistance or ready to accept information necessary

to process the call. An acknowledgment that the customer is waiting on the line does

18

not constitute an answer.

(c) "Call" means a measurable effort by a customer to obtain a telephone

connection whether the connection is completed or not.

(d) "Call blockage factor" means the percentage of calls that do not get answered.

The call blockage factor is calculated by multiplying the remainder obtained by

23

subtracting the number of answers from the number of calls, multiplying by 100, and

then dividing that value by the total number of calls.

(e) "Approved by the commission" means that a favorable commission order has

been obtained.

(f) "Catastrophic conditions" means either of the following:

(i) Severe weather conditions that result in sustained interruptions for 10% or

more of an electric utility's or electric cooperative’s customers.

(ii) Events of sufficient magnitude that result in issuance of an official state of

emergency declaration by the local, state, or federal government.

(g) “CELID” or “Customers Experiencing Long Interruption Durations” or “CELID”

means the ratio of the number of customers experiencing one or more sustained

interruptions longer than an indicated duration to the total number of customers

served. For purposes of these rules, the interruption duration is denoted as an

number and unit of time immediately following the term CELID, for example

CELID8hours.

(h) “CEMIn” or “Customers Experiencing Multiple Interruptions” means the ratio of

individual customers experiencing n or more sustained interruptions to the total

number of customers served.

19

(i) "Complaint response" or "response" means a communication between the utility

and the customer that identifies the problem and a solution to the complaint.

(j) "Complaint response factor" means the annual percentage of the complaints

forwarded to a utility by the commission that are responded to within the time period

prescribed by these rules.

(k) "Commission" means the Michigan public service commission.

(l) "Completion date" means the day on which service at a new installation is

permanently energized. The provision of construction power does not affect a

determination of the completion date.

(m) “Electric Cooperative” means cooperative electric utilities that are member

regulated as provided in 2008 PA 167.

(n) "Electric utility" or "utility" means that term as defined in section 2(e) of 1995

PA 30, MCL 460.562(e).

(o) “Gray sky conditions: means conditions that result in sustained interruptions for

greater than 1% but less than 10% of an electric utility’s or electric cooperative’s

customers.

(p) "Meter reading factor" means the percentage of meters read within an

approved billing period. An approved billing period is a "billing month" within the

meaning of R 460.2102(b) of not less than 26 days, nor more than 35 days, or some

other time period approved by the commission.

(q) "Metropolitan statistical area" means an area within the state of Michigan

identified by the federal office of management and budget on June 30, 1999. A map of

the metropolitan statistical areas was attached to the July 11, 2001, order in Case No. U12270

as exhibit C and appears on the website of the United States department of

20

commerce, economics and statistics administration, bureau of the census. at

http://www.census.gov/geo/www/mapGallery/stma99.pdf.

(r) "Minimum bill prorated on a daily basis" means the amount that results from

24

dividing the customer's minimum bill amount by the number of days in the billing period

and then by multiplying that quotient by the number of days during which the customer

remained out of service.

(s) "MISS DIG activities" means the requirements imposed pursuant to 1974 PA

53, as amended, MCL 460.701 et seq.

(t) “Momentary Interruption” means the full or partial loss of service to 1 or more

customers for less than or equal to five minutes. Such switching operations must be

completed within a specified time of less than or equal to five minutes. This definition

includes all reclosing operations that occur within five minutes of the first interruption .

(u) "New service installation factor" means the percent of new service hookups

that are completed within the time period prescribed by these rules, from start date to

completion date. New service hookups dependent on the construction of a line

extension other than the service line shall be excluded from the calculation of this

factor.

(v) "Normal conditions" means conditions that result in sustained interruptions for

one percent or less of an electric utility’s or electric cooperative’s customers,

(w) "Service restoration" means that the interruption condition has been corrected

and that the interrupted customer or customers have regained the full use of their electric

service.

(x) “Sustained interruption” means any interruption not classified as part of a

21

momentary event – that is any interruption that lasts more than five minutes. The duration

of a customer’s interruption shall be measured from the time that the electric utility or

electric cooperative is notified or otherwise becomes aware of the full or partial loss of

service to one or more customers for longer than five minutes.

(y) "Start date for new installations" means the first business day after all of the

following events have occurred:

(i) All rights of way, easements, licenses, and consents have been obtained and

are and remain physically unencumbered.

(ii) All permits have been received.

(iii) All joint use requirements have been met.

(iv) All required inspections have been completed.

(v) All commission-approved tariff payments have been received.

(vi) All MISS DIG activities have been completed.

(v) "Wire-down relief factor" means the annual percentage of the non-utility

employee first responder guarded downed wires that are relieved by a utility representative

within the time period specified in Rule 23.

History: 2004 AACS.

R 460.703 Revision of tariff provisions.

Rule 3. Not more than 30 days after the effective date of these rules, an electric utility

subject to the commission's jurisdiction shall file any revisions of its tariff provisions

necessary to conform with these rules.

History: 2004 AACS.

25

PART 2. UNACCEPTABLE LEVELS OF PERFORMANCE

22

R 460.721 Duty to plan to avoid unacceptable levels of performance.

Rule 21. An electric utility or electric cooperative shall plan to operate and maintain

its distribution system in a manner that will permit it to provide service to its customers

without experiencing an unacceptable level of performance as defined by these rules.

History: 2004 AACS.

R 460.722 Unacceptable levels of performance during sustained interruptions.

Rule 22. It is an unacceptable level of performance for an electric utility or electric

cooperative to fail to meet any of the following sustained interruption standards:

(a) Considering data derived through the amalgamation of data from normal, gray

sky and catastrophic conditions, an electric utility or electric cooperative shall restore

service within 36 hours to not less than 90% of its customers experiencing sustained

interruptions.

(b) Considering data including only catastrophic conditions, an electric utility or

electric cooperative shall restore service within 60 48 hours to not less than 90% of its

customers experiencing sustained interruptions.

(c) Considering data including only gray sky conditions, an electric utility or

electric cooperative shall restore service within 24 hours to not less than 90% of its

customers experiencing sustained interruptions.

(d) Considering data including only normal conditions, an electric utility or electric

cooperative shall restore service within 8 hours to not less than 90% of its customers

experiencing sustained interruptions.

(e) CConsidering data derived through the amalgamation of data from normal, gray

sky and catastrophic conditions, an electric utility shall not experience 4 or more

repetitive sustained interruptions in a 12-month period for more than 5% of its customers.”

23

History: 2004 AACS.

26

R 460.723 Wire down relief requests.

Rule 23. (1) It is an unacceptable level of performance for an electric utility or electric

cooperative to fail to respond to a request for relief of a first responder non-utility employee

guarded downed wire at a location in a metropolitan statistical area within 120 240 minutes

after notification at least 90% of the time under all conditions.

(2) It is an unacceptable level of performance for an electric utility or electric

cooperative to fail to respond to a request for relief of a first responder non-utility

employee guarded downed wire at a location in a non-metropolitan statistical area within

180 360 minutes after notification at least 90% of the time under all conditions.

(3) It is an unacceptable level of performance for an electric utility or electric

cooperative to fail to exercise due diligence and care to ensure that first responders are

relieved from guarding downed wires in the quickest manner possible.

(4) It is an unacceptable level of performance for an electric utility or electric

cooperative to fail to exercise due diligence and care to ensure downed wires are repaired

responded to and secured in the quickest manner possible.

History: 2004 AACS.

R 460.724 Unacceptable service quality levels of performance.

Rule 24. It is an unacceptable level of performance for an electric utility or electric

cooperative to fail to meet any of the following service quality standards:

(a) An electric utility shall have an average customer call answer time of less than

90 seconds.

(b) An electric utility shall have a call blockage factor of 5% or less.

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(c) An electric utility shall have a complaint response factor of 90% or more

within 3 business days.

(d) An electric utility shall have a meter reading factor of 95% 85% or more within

the approved period, including customer reads.

(e) An electric utility shall complete 90% or more of its new service installations

within 15 business days.

History: 2004 AACS.

27

PART 3. RECORDS AND REPORTS

R 460.731 Deadline for filing annual reports.

Rule 31. Not more than 120 days after the end of the calendar year in which these

rules became effective, an electric utility or electric cooperative shall file an annual report

with the commission regarding the previous calendar year. For subsequent calendar

years, an electric utility or electric cooperative shall file its annual report not more than 75

days after the end of the year. The annual report shall be filed on a form prescribed by the

Commission.

History: 2004 AACS.

R 460.732 Annual report contents.

Rule 32. The annual report of an electric utility or electric cooperative made pursuant

to these rules shall contain all of the following information:

(a) The call blockage factor. If the call blockage factor is more than 5%, then the

annual report shall contain a detailed explanation of the steps that the electric utility is

taking to bring its performance to an acceptable level.

(b) The complaint response factor. If the complaint response factor is less than

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90% within 3 business days, then the annual report shall contain a detailed explanation

of the steps that the electric utility is taking to bring its performance to an acceptable

level.

(c) The average customer call answer time. If the average customer call answer

time is 90 seconds or more, then the report shall contain a detailed explanation of the

steps that the electric utility is taking to bring its performance to an acceptable level.

(d) The meter reading factor. If the meter reading factor is less than 95% 85%, then

the report shall contain a detailed explanation of the steps that the electric utility or

electric cooperative is taking to bring its performance to an acceptable level.

(e) The new service installation factor. If the new service installation factor is less

than 90% completed within 15 business days, then the report shall contain a detailed

explanation of the steps that the electric utility or electric cooperative is taking to bring its

performance to an acceptable level.

(f) The wire-down relief factor. If the wire-down relief factor is less than 90%

within 120 240minutes within metropolitan statistical areas or less than 90% within 180

360minutes in non-metropolitan statistical areas, then the report shall contain a detailed

explanation of the steps that the electric utility or electric cooperative is taking to bring its

performance to an acceptable level.

(g) The service restoration factor for all conditions. If the service restoration

factor for all conditions is less than 90% of customers restored within 36 hours or less,

then the report shall contain a detailed explanation of the steps that the electric utility or

electric cooperative is taking to bring its performance to an acceptable level.

(h) The service restoration factor for normal conditions. If the service restoration

factor for normal conditions is less than 90% of customers restored within 8 hours or

26

less, then the report shall contain a detailed explanation of the steps that the electric

utility or electric cooperative is taking to bring its performance to an acceptable level.

28

(i) The service restoration factor for gray sky conditions. If the service restoration

factor for gray sky conditions is less than 90% of customers restored within 24 hours or

less, then the report shall contain a detailed explanation of the steps that the electric

utility or electric cooperative is taking to bring its performance to an acceptable level.

(j) The service restoration factor for catastrophic conditions. If the service

restoration factor for catastrophic conditions is less than 90% of customers restored

within 48 60 hours or less, then the report shall contain a detailed explanation of the steps

that the electric utility or electric cooperative is taking to bring its performance to an

acceptable level.

(k) CEMI4: The number of customers experiencing four or more sustained

interruptions, excluding those interruptions that occurred on major event days.

(l) Repetitive Circuit Interruptions. If more than 5% of circuits experience 4 or

more repetitive sustained interruptions within a 12 month period, then the report shall

contain a detailed explanation of the steps that the electric utility or electric cooperative is

taking to bring its performance to an acceptable level.

(m) A description of all catastrophic conditions experienced during the year.

(n) The number and total dollar amount of all customer credits the electric utility or

electric cooperative provided during the year, broken down by customer class, for its

failure to restore service to customers within 96 hours of a sustained interruption that

occurred during the course of catastrophic conditions.

(o) The number and total dollar amount of all customer credits the electric utility or

27

electric cooperative provided during the year, broken down by customer class, for its

failure to restore service to customers within 48 hours of a sustained interruption that

occurred during the course of gray sky conditions.

(p) The number and total dollar amount of all customer credits the electric utility or

electric cooperative provided during the year, broken down by customer class, for its

failure to restore service to customers within 16 hours of a sustained interruption that

occurred during normal conditions.

(q) The number and total dollar amount of all customer credits the electric utility or

electric cooperative provided during the year, broken down by customer class, for

repetitive sustained interruptions.

(r) For each electric utility with 1 million or more customers, a list of their ten

worst performing circuits for the prior year , excluding major event days. “Worst

performing” shall be in terms of SAIDI, excluding major event days, and the calculation

of SAIDI minutes for each circuit shall only consider the customers being served by the

circuit itself.

(s) For each electric utility or electric cooperative with less than 1 million

customers, a list of the worst performing 1% of circuits for the prior year. “Worst

performing” shall be in terms of SAIDI, excluding major event days, and the calculation

of SAIDI minutes for each circuit shall only consider the customers being served by the

circuit itself.

(t) For each of the ten worst performing circuits listed in parts (r) or (s), the electric

utility or electric cooperative shall provide the following information: (i) SAIDI and

SAIFI excluding major event days for the year; (ii) circuit name, number and location;

(iii) length of circuit (miles); (iv) number of customers served; (v) substation name; (vi)

28

last circuit trim; (vii) list of outages and causes; and (viii) corrective action to improve

29

performance.

(u) Number of Customers Experiencing Multiple Interruptions (“CEMI”) reporting

for indices CEMI0 hours through CEMI10+ hours excluding those interruptions that

occurred on major event days.

(v) Number of Customers Experiencing Long Interruption Durations

(“CELID”) reporting for indices CELID8hours, CELID24hours, CELID 48hours

excluding those interruptions that occurred on major event days.

(w) Number of Commercial and Industrial customers experiencing Momentary

Interruptions.

(x) A summary table indicating whether the electric utility or electric cooperative

complied or failed to comply with each of the standards established by these rules.

History: 2004 AACS

30

R 460.733 Availability of records.

Rule 33. (1) An electric utility or electric cooperative shall make available to the

commission or its Staff, upon request, all records, reports, and other information required

to determine compliance with these rules and to permit the commission and its Staff to

investigate and resolve service quality and reliability issues related to electric distribution

service.

(2) An electric utility or electric cooperative shall make records, reports, and other

information available to the commission or its Staff within 5 business days, preferably in

an electronic format available through the internet, accessible with standard browser

29

software, identification, and password or as soon thereafter as feasible.

History: 2004 AACS.

R 460.734 Retention of records.

Rule 34. An electric utility shall preserve, in detail, all records required by these

rules for the previous 24 months and shall preserve, in summary form, all records for not

less than 4 years, unless otherwise ordered by the commission.

History: 2004 AACS.

PART 4. FINANCIAL INCENTIVES AND PENALTIES

CUSTOMER ACCOMODATIONS

R 460.741 Approval of incentives AND PENALTIES by the commission.

Rule 41. (1) THE COMMISSION SHALL DETERMINE BY ADMINISTRATIVE RULING AN

EXTERNAL STANDARD FOR RELIABILITY PERFORMANCE. THIS STANDARD WILL BE A

BASIS FOR DETERMINING THE DEGREE TO WHICH A UTILITY CAN RECOVER THE

COST OF OUTAGES. The commission may authorize an electric utility to receive a financial

incentive if it exceeds all of the service quality and reliability standards adopted by these

rules.

(2) A request for approval of an incentive mechanism shall be made in either of

the following proceedings and shall be conducted as a contested case under chapter 4

of 1969 PA 306, MCL 24.271 et seq.

(a) A rate case proceeding.

(b) A single-issue proceeding filed specifically to address adoption of an incentive

program.

(3) An electric utility shall not file an application seeking approval of an incentive

mechanism until it has exceeded all of the service quality and reliability standards

adopted by these rules continuously for a period of not less than 12 months.

30

History: 2004 AACS.

31

R 460.742 Criteria for receipt of an incentive.

Rule 42. (1) If an electric utility qualifies for implementation of a previously approved

incentive mechanism, it shall file an application seeking authority to implement the incentive

mechanism at the same time that it submits the annual report required by R 460.732.

(2) An electric utility shall not apply for a financial incentive approved by the commission

unless all of the following criteria were met during the previous 12 months:

(a) All required reports have been filed in a timely manner.

(b) All required reports fully comply with the requirements as determined by the

commission.

(c) The electric utility's performance shall have exceeded all of the individual service

quality and reliability standards.

(d) The electric utility shall have fully responded to any inquiries about the content of

the reports made by the commission or its Staff in a timely manner.

History: 2004 AACS.

R 460.743 Disqualification.

Rule 43. An electric utility shall be disqualified from receiving an incentive if the

commission issues an order finding that the electric utility engaged in any type of

anticompetitive behavior within the 12-month period preceding the filing of an application

pursuant to R 460.742(1).

History: 2004 AACS.

R 460.744 Penalty Customer Accommodation for failure to restore service after a

sustained interruption due to gray sky and catastrophic conditions.

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Rule 44. (1) Unless an electric utility requests a waiver pursuant to part 5 of these rules, AN

ELECTRIC UTILITY SHALL PROVIDE A CUSTOMER THAT EXPERIENCES A SUSTAINED

INTERRUPTION THE APPROPRIATE BILL CREDIT IN THE BILL FOR THE BILLING PERIOD

DURING WHICH THE INTERRUPTION OCCURRED.

an electric utility that fails to restore service to a customer within 96 hours after a sustained

interruption that occurred during the course of catastrophic conditions shall provide any affected

customer with a bill credit on the customer's bill within 90 days. The amount of the credit

provided to a residential customer shall be the greater of a base rate $35.00 plus $2.00 for

every

hour of outage over 96 hours or the customer’s monthly customer charge. The amount of the

credit provided to any other distribution customer shall be the customer's minimum bill prorated

on a daily basis.

(2) Unless an electric utility requests a waiver pursuant to part 5 of these rules, an electric

utility that fails to restore service to a customer within 48 hours after a sustained interruption

that occurred during the course of gray sky conditions shall provide any affected customer with

a bill credit on the customer's bill within 90 days. The amount of the credit provided to a

residential customer shall be the greater of a base rate of $35.00 plus $2.00 for every hour of

outage over 48 hours or the customer’s monthly customer charge. The amount of the credit

provided to any other distribution customer shall be the customer's minimum bill prorated on a

daily basis.

THE AMOUNT OF THE CREDIT PROVIDED TO A RESIDENTIAL CUSTOMER SHALL BE

$2.00 FOR EVERY HOUR OF OUTAGE, OR A LARGER AMOUNT DETERMINED BY THE

COMMISSION PURSUANT TO RULE 460.xxx

(3) THE AMOUNT OF THE CREDIT PROVIDED TO A NONRESIDENTIAL CUSTOMER

SHALL BE [], OR A LARGER AMOUNT DETERMINED BY THE COMMISSION PURSUANT

TO RULE 460.xxx.

(3) (4) No sooner than September 1, 2022, and by October 1 every year thereafter, the

32

Commission shall issue an order adjusting the customer accommodations base rate under

subsection (1) and subsection (2) of these rules. The Commission shall adjust these customer

accommodations by multiplying these accommodations by the difference between the

Consumer Price Index for the month of October immediately preceding the commission’s order

implementing the inflation adjustment and the Consumer Price Index for the previous October.

The commission shall round up each adjustment made under this subsection to the nearest

multiple of $1.00.

R 460.xxx Determination of the customer cost of service interruptions