Michigan AG reviews DTE’s debt collection practices — ProPublica


This article was produced for ProPublica’s Local Reporting Network in partnership with Outlier Media. Subscribe to Dispatches to get stories like this as soon as they’re published.

What is usually a routine procedure — a utility requesting and then receiving approval for a consumer rate increase — has become unusually contentious for DTE Energy, Michigan’s largest such provider.

Critics point to both the financial impact on Detroit-area consumers and draw attention to other issues affecting local communities, including widespread outages and the company’s treatment of customers who don’t have cannot afford to pay their bills.

A March investigation by ProPublica and Outlier Media found that DTE had shut down service for nonpayment more than 200,000 times during the pandemic. In an August story, news organizations showed how DTE had sold off old customer debt, an unusual financial maneuver by a Midwestern utility. Reporters discovered that DTE received only pennies for every dollar of debt sold to a collection company owned by a private equity firm. The consequences were severe for thousands of Detroiters who were sued and, in some cases, had their wages garnished.

Last week, three members of Congress, including Rep. Rashida Tlaib, a Democrat whose district covers much of Detroit, introduced a resolution recognizing access to utilities such as power, water and high throughput as a human right. This resolution calls for a ban on the sale of household debt, the creation of a federal database to track disconnections, and a congressional hearing on utility issues, among other things. Tlaib also testified at a public hearing about the rate increase, joining a chorus of protests that included dozens of customers.

Following our article last month on debt sales, a spokesperson for the Michigan attorney general’s office said it was “taking a closer look” at the DTE’s debt sales practice. The spokesperson added that the attorney general plans to raise the issue during negotiations on current and future DTE regulatory cases, which are decided by the Michigan Public Service Commission.

Additionally, Detroit council member Angela Whitfield Calloway, who represents part of the northwest side of the city, told ProPublica that she intends to ask DTE officials to appear before the city council to answer questions about company closures, outages and debt sales.

“The selling of debt, in my view, is blatant,” said Whitfield Calloway, who following the March inquiry co-sponsored a resolution calling on DTE to suspend power cuts and gas.

“What’s in it for DTE?” she asked. “You are causing harm to your customers.”

The proposed DTE tariff would bring in an additional $388 million in annual revenue from residential, commercial and industrial customers combined. About 60% of this revenue increase would come from residential customers, who would see their rates increase by 8.8%. On Monday, an administrative law judge issued a draft ruling that would reduce the revenue increase to $145.7 million. The commission has until November 21 to issue a final order.

Brynn Guster, spokesperson for DTE, said in an email that when the board approves new rates, it will be the first base rate increase in nearly three years.

In public filings, the company said its proposed rate increase was driven by investments in infrastructure improvements that would prevent power outages and improve worker safety.

Guster also said the company plans to invest in “a network of the future that supports our rapidly changing lifestyles, businesses and economy.”

The utility has defended its shutdown policies; its closing rate was higher than that of six other state-owned electric utility companies, reporters found. A DTE spokesperson told reporters the company is working with customers to arrange an affordable payment plan or find financial assistance through programs for low-income communities.

In response to questions about DTE’s debt sales, Guster previously said the sales reduce the financial burden on other customers and that DTE only sells debt from “closed” accounts, where customers’ utilities have been shut down. or residents had moved away from DTE’s service area. .

About 200 people attended a hearing in August on the proposed rate increase. This is the first time the Michigan Public Service Commission, which regulates utility rates, has held a public hearing devoted to taking evidence on a rate increase.

“We understand that people are frustrated,” said commission spokesman Matt Helms. “That’s why the Board decided to hold the hearing in Detroit, so that the commissioners could hear directly from customers concerned about the costs and reliability of their electrical service.”

Detroit’s Annie Beaubien testified at the hearing about two outages in as many days in July that left her home without air conditioning or fans in 90-degree weather. Getting information from the DTE about what was wrong or when power would be restored was difficult, she said.

“It’s completely ridiculous, the amount we pay compared to the quality of service we get,” she said in an interview.

Tlaib, meanwhile, took aim at DTE’s shutdown policies during the hearing. “You know what is scandalous and what should be the biggest scandal for all of you as members of the commission: in 2020, at the worst of the pandemic, DTE cut off power to customers more than 80,000 times” , she said. Democratic state representatives Laurie Pohutsky and Yousef Rabhi also testified against the rate hike.

On August 29, just a week after the hearing, severe storms left some 265,000 customers without power. The outages shut 24 Detroit public schools and some homes went without power for days. More than 43,000 customers were still without power on the afternoon of September 2.

Guster said the company apologized to customers affected by the storm in late August and said extensive damage from high winds and the complexity of repairs had delayed DTE’s efforts to restore power to some customers. . She added that 99% of customers who had experienced outages were reconnected by the evening of September 2.

Siedah Spencer-Ardis, a marriage and family therapist in Detroit, said she went four days without power after the August 29 outage – a situation she called “hell”.

Her two children missed three days of school. She and other therapists had to juggle appointments as the outages affected them and their clients. She said her family had to throw away food from two refrigerators in her six-person household. And it’s not the first time: she estimated that she had lost races during DTE power outages four times in the past three years.

“It’s like a recurring thing where we lose power,” she said. “They need to do better.”


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