[00:00:00] Arpan Lobo: Hello and welcome to Facts Matter, a podcast by the Citizens Research Council of Michigan. I’m Arpam Lobo, a politics reporter with the Detroit Free Press, guest hosting the Facts Matter pod today with Eric Paul Dennis, a research analyst specializing in infrastructure policy at the Research Council.

Eric, last year you published a paper focusing on Michigan’s investor owned utility companies. And potential options for improving the service reliability for their electric customers. Undergrounding electrical lines is an option to prevent power outages, but state policy is needed to better enable the practice.

And undergrounding, or burying existing power lines underground, is especially relevant now. I recently reported in the Free Press that state regulators have approved Consumers Energy’s plan to spend 3. 7 million dollars on an undergrounding pilot project. Eric, how can undergrounding power lines improve electric service reliability in Michigan?

And what are some obstacles to getting those lines from overhead electric poles to under our feet?

[00:00:59] Eric Paul Dennis: Eric, thank you so much for being here. Yes so the most Frequent source of power outages in Michigan, as in most states, is storm damage, especially from trees sometimes from ice on the lines as well, but in Michigan, trees are our biggest problem.

Getting those power lines away from trees would obviously be very helpful in preventing power outages. The biggest barrier to this is it’s also usually the most expensive way to prevent power outages. It’s the most effective, but also the most expensive. And when Our Michigan Public Service Commission works with these utilities to figure out ways to make the grid more reliable and more resilient undergrounding existing above ground lines.

It just doesn’t pencil out as the best, most cost efficient method. And so really neither the Michigan Public Service Commission or the utilities are prioritizing this as a way to improve reliability. They’re focusing on several other things.

[00:02:15] Arpan Lobo: And you mentioned the storm damage that so, you know, frequently causes outages if, if downed tree branches are falling on power lines.

In Michigan, that’s kind of a given that we’re going to have some severe storms. I can think of last February when we had the severe winter ice storms and even last August when a tornado hit down in parts of mid Michigan. But you mentioned the cost You know, prohibitions when it comes to undergrounding and for this consumers initially said that they’re going to spend over 400, 000 a mile for line.

And then the state regulators said, well, we’re going to knock that price down a little bit. So, but for a little bit more than 10 miles of power lines, they’re spending 3. 7 million. In your paper, you mentioned dig once policies. How could this help the under grounding effort? And if you could explain those a little bit.

[00:03:05] Eric Paul Dennis: Part of the reason that undergrounding is so expensive is because in the cost benefit analysis that the Michigan Public Service Commission reviews with the utilities both parties are assuming that all of those costs will be borne by rate payers. But the benefits of preventing storm damage power outages really isn’t fully incorporated into that.

So they’re looking at service interruption minutes, basically per customer, but the socioeconomic costs of power outages, the inconvenience to businesses and residents losing the food in your refrigerator, Possibly losing medicine, businesses closing down. Those costs don’t really factor into the decisions being made by the, the investment decisions being made by the utilities or the Michigan public service commission.

But those are real costs that are born collectively by all of us. And so what I argued is there is an opportunity to look at this from a A collective interest perspective, a public interest, like, this is a collective interest problem, right? We all suffer when there’s a power outage, but those costs of our suffering from those power outages aren’t being considered by either the NPSC or the utilities when they’re doing their job.

determining how to make investments to, to prevent them. So what I’m arguing is we should look at ways to socialize or subsidize those costs to better prevent power outages so that we’re not so inconvenienced. And that would have to come from somewhere else because the Michigan Public Service Commission is, their charge is to.

Keep power rates at. Basically the lowest reasonable cost for what they call safe and safe and sufficient power service and infrequent power outages don’t meet that cost burden enough to actually spend the money to get these things underground. But cities have the opportunity and sometimes do have the opportunity to work with the utilities to.

Get those get existing above ground power lines underground. But then a lot of that additional cost has to come from usually the city the taxpayers in the city. So it’s the same people. It’s just taxpayers. People as taxpayers rather than rate payers but I think we can look at this more coherently and better understand the costs that are imposed on all of us when the power goes out and incorporate that into a larger cost benefit analysis when we determine how we should invest to prevent those power outages, including underground and power lines.

And

[00:06:17] Arpan Lobo: it sounds like a lot of this change would have to come from Lansing from our, from our state legislature through. The legislative process and some bills there now, last year, the legislature took up a couple of different pretty notable packages dealing with Michigan’s energy infrastructure, but not along the lines that you mentioned last year, Michigan lawmakers.

And government Richard Whitmer signed into law, but Michigan lawmakers passed. Bills to establish new clean energy goals and new renewable energy goals, pretty aggressive ones aiming to be carbon free. So to speak by 2040 and also quite notably give the Michigan. Public service commission, as you mentioned more power to approve a large scale solder projects, but they didn’t really.

Tackle reliability in the way that you mentioned that you mentioned some of the food and medicine loss and other, you know, ill effects of power outages and lawmakers held hearings and held kind of town hall meetings across the state, talking to residents were affected. By those mass outages last year, but they didn’t really take up any policies when it comes to when it comes to.

Addressing that now for lawmakers, you mentioned possibly subsidizing, ways to improve reliability. How imperative is it for both consumers and energy? Michigan’s other large investor-owned utility company, how imperative is it for them to have better electric reliability? Given that last year a free press review of electric reliability found that they were among the worst performing nationally.

How imperative is it for them to get on track and provide better service for Michiganders?

[00:07:58] Eric Paul Dennis: Well, that’s kind of up to them as well as the MPSC, and it doesn’t, so when we’re talking about reliability, usually when both the MPSC and the utilities are using that word, they’re not focused on storm damage because there’s a lot of other things going on right now. As you mentioned, they are now charged with pretty rapidly and aggressively decarbonizing the power grid, and there are a lot of costs involved with doing that while maintaining reliability from the perspective of knowing if they’re going to have enough power generation to meet demands for Until about three or four years ago, for the last 20 years prior, their job was pretty simple.

A lot of electricity came from coal plants or gas peaker plants that were very schedulable. Our power demands were very predictable. And so it was pretty easy to know that they could create enough power for any given day to meet the demands. That problem is getting much more difficult when we are moving towards renewables that are intermittent generation sources, weather dependent.

And so it’s quite a bit more difficult to predict how much power there’ll be making on a given day. And at the same time, we are electrifying our transportation system. We’re electrifying our homes and businesses. And so the. Demand spikes that they need to meet are becoming also less predictable and generally higher.

And so when they’re taught, they are making hundreds of millions of dollars, billions of dollars in investments to address reliability demands, but mostly what they’re focusing on is making sure there’s enough power that to meet the demands to keep the lights on. Basically. The. Reliability issues around storm damage.

They’re certainly concerned but it’s like the 3rd or 4th most important thing they’re concerned with right now. We do have fairly low reliable system across the state. I think we rank 45th in the most recent data that I’ve seen in terms of, there’s actually several different ways to measure reliability, but there’s organization called the Citizens Utility Board of Michigan.

They’re actually a national organization that has state subsets as well, but they’ve ranked, they’ve taken all of the different reliability metrics, and in 2021, they ranked Michigan 45th for reliability. So it’s not just our imagination, we lose power a lot, and it is a lot because we have a lot of above ground power lines that are struck by trees.

And so this is something they can do to keep the power on, but it’s not really anyone’s priority right now. They have bigger fish to fry, so to speak.

[00:11:01] Arpan Lobo: And Eric earlier, we mentioned this consumers pilot project. It’s a little more than 10 miles of power lines that they’re going to underground in 6 different counties.

They had asked state regulators to do another 11 miles, but didn’t get approval from that. Their most recent rate case, but consumers. They’ve said their goal is to underground more than 1000 miles. Of power lines in the next five years. It’s going to cost over 400 million in their estimates. And those costs are passed down to the rate payers through electric rate cases.

Do you know if Michigan is an outlier with when it comes to having two major investor owned utilities provide the bulk of power for residents of the state? Do other states have this model? And if so why is Michigan ranking so low when it comes to electric service reliability?

[00:11:53] Eric Paul Dennis: I don’t believe we’re unusual having investor owned utility, the, as far as I know, most states have the majority of their customers served by investor owned utilities.

And so that’s an interesting question, why we’re so unreliable. I think a lot of it comes down to just the Michigan’s natural environment. We’re a state where tree, we have a lot of trees. We’re heavily, heavily forested. Our trees grow fairly fast. Unlike, some other forested states where the climate.

Isn’t as conducive to quick tree growth. And we’re also another thing that I haven’t heard anyone talk about is we have some issues with invasive species, such as Siberian elm, which are rapidly progressing across the state becoming more established and trees like that, they grow very fast and they have weak wood.

They’re liable to fall down in storm damage. So we’re a heavily forested state with some. weak, sometimes invasive trees. Some of our native species grow fast in our week as well. And we also have this capacity for damaging storms 365 days a year. We get wind storms and tornadoes in the summer. We get snow storms and ice storms in the winter.

So those factors combined, I think it is. Really uniquely challenging in Michigan to prevent storm damage on our electrical system when we have above ground power lines. It is quite a challenge locally.

[00:13:32] Arpan Lobo: And so it sounds like undergrounding is really, you know, the key kind of tool for the state to avoid some of these long outages in the future.

[00:13:42] Eric Paul Dennis: Yeah, it would certainly help. And to be fair, the last 4 or 5 years, we have had an uptick in damaging storms. You can see if you look up storms with ice storms or storms where a wind speed met a certain threshold, like, you can see this in our climate data that they have had more challenges in the last 3, 4, 5 years, which has really pushed it to the forefront.

But Michigan has always had challenges with reliability compared to other states.

[00:14:15] Arpan Lobo: Yeah, and on those storms, I think it was even DTE Energy official Jerry Narcia came out and said, well, these once in a lifetime storms aren’t exactly once in a lifetime, they may be once in a year moving forward, given the, the, the changes in our climate.

So. In Lansing lawmakers are back. There’s a kind of even divide in the house. So it’s slowed a little bit of legislative traction there, but it still sounds like that there’s some action lawmakers can take to, to kind of help improve reliability. You mentioned potentially subsidizing you know some of these changes.

Are there any other big legislative policies that lawmakers could take up to improve reliability?

[00:14:55] Eric Paul Dennis: Yeah, one thing that I would like to see is a statewide system that really tries to make sense of our underground utilities in our public rights of way. So I think I’m an engineer by background and I’ve worked on projects that involve excavation and subsurface work.

And I think a lot of people would be shocked at how little we know about what we’re going to find when we start digging in the public right of way. So we have the 8. 11 MSTIG system, which compels utilities when there’s going to be a project involving excavation to go out and mark where the utilities are.

But that the database, the data that they’re working with and the methods that they’re working with are not very precise. They miss a lot. So there are a lot of costs involved when you want to do anything underground, including undergrounding Above ground power lines. So my thought is to develop a system that would really, we have the technology now to map out and collect and distribute to other right of way users exactly where these utilities are.

Because we also have the technology, it’s called directional boring, to basically bore a conduit without actually digging up the entire ground. With centimeter precision, like you can know exactly where you’re boring that conduit. And so if you know exactly where those other utilities are within the right of way, you can miss them.

You can bore right by them, but this information is very difficult to get. It’s often not accurate at all, because, you know, as we’ve developed our infrastructure system over the last 100, 150 years, for most of that time, this wasn’t even possible. People just dug a hole, put stuff in the ground. Left it and kind of had some paper plans that gave a general impression of where it is, but we can do this digitally digitally now know exactly where it is and have much more efficient construction processes, but we don’t have a system that.

One compels that high precision data to be collected in the first place, and then two, made available to other right of way users who could definitely use that when they’re working in the right of way for things like undergrounding power lines.

[00:17:24] Arpan Lobo: So it sounds like a statewide system. Would be something that maybe if lawmakers either task the NPSC with maintaining that or another way would be something beneficial for not only, you know, electric service reliability, but for the utilities themselves.

So they know what they’re getting into before they dig.

[00:17:42] Eric Paul Dennis: I think so, and people know this. We have the Michigan infrastructure commission that has a dig once portal. And but what that portal. basically does is provide a platform where utilities and public agencies can upload their project data.

So they can kind of know when other utilities or public agencies are going to be working or planning on working in the same place near the same time, which gives them the opportunity to coordinate and share data, maybe do these dig ones projects, but there is. Not a lot of incentive to do that. These dig once project projects are very difficult.

If you are a power company and you’re doing a dig once project in coordination with the road agency, there’s that coordination takes a lot of additional resources, frankly, it’s a pain in the butt. And often they would prefer not to do it. Even if the company would save costs. The project manager does it, he’s getting paid, he or she is getting paid the same and their job becomes much more difficult working with another agency and so at an individual level, the way that these decisions are often made, they often just choose not to cooperate as much as they could, because it’s, it’s a much harder job, but if we had a statewide Platform or even regional platforms, local platforms that formalized the way that this data was made available and really formalized a way to compel agencies and utilities to work together in these dig ones projects.

I think as a state, as the public, we could save a lot of money and start getting a better, more resilient, more efficient infrastructure system.

[00:19:37] Arpan Lobo: Yeah, and Eric, lawmakers stand to gain by, you know, passing policies that. Result in a more resilient and reliable system because they can go back to their voters and brag about it.

Once again, I’m Arpan Logo with the Detroit Free Press, and I’ve been chatting with Eric Paul Dennis of the CRC in Michigan online at crcmich. org and on Twitter at crcmich. This is Facts Matter, a podcast presentation of the Citizens Research Council. Thanks for listening.