How Utilities Neglect Certain Customers — Episode 189 of Local Energy Rules

Alex Hill:

There was a handful of folks whose response was, okay, now what you’ve told us this is terrible in our community, or that we’re being underserved, or, but what can we do? The research is the fairly easy part. And thankfully I was able to do that research within an organization like We the People of Michigan, that, you know, it’s an organizing entity in and of itself. So we were working on actively mobilizing people before this rate case happened. And then also during, so then it wasn’t just kind of the knowledge to have the knowledge, it gave people an opportunity to then work with others in the community and learn how to give a public comment or even find out when the next public comment is gonna be. ‘Cause sometimes they make that confusing on purpose <laugh>. But I think that was the, I don’t know, I feel like that was probably the most critical part of, of the work that we did was that it wasn’t, it wasn’t just research to generate the knowledge, but you know, it was research for the community.

John Farrell:

If you’ve heard of redlining before, you’ve probably heard of it in the context of housing, a practice sanctioned by the federal government to prevent home loans from being given to folks in communities with a significant proportion of Black and brown folks. According to new research from We the People Michigan, your electricity service may similarly show racial disparities. Joining me in July, 2023, Alex Hill, research director for We the People Michigan, discussed their new policy brief, which shows how the power grid in areas of Detroit is nine times less reliable and nine times less able to incorporate solar panels or electric vehicles that we need for the clean energy transition. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance. And this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system. Alex, thanks so much for joining me for this podcast.

Alex Hill:

Absolutely. Thanks so much for having me.

John Farrell:

Well, I’d love to start off with guests on the podcast just asking them how they got into this work. ‘Cause there are so many different interesting paths that people have taken. This particular research was at the intersection of utility grids and climate change and energy justice. How did you get to We the People of Michigan and, and kind of what motivated you to get into work like this at the intersection of those crucial issues?

Alex Hill:

Yeah, well, <laugh> I can say partly, partly I fell into it <laugh>. So I’ve always kind of tangentially worked in the social justice sphere supporting a lot of advocacy organizations and you know, sitting on a lot of research committees and teams for smaller initiatives and campaigns. And so I’m relatively newly the research director at We the People Michigan. It was an exciting opportunity with a growing organization to really be able to bring a lot of the work that I do on the research side into kind of full-time into the, the social justice side of things and kind of energy, energy justice and climate change. Uh, again, I had been kind of tangentially involved. I had a lot of friends and colleagues who were very deeply in the issues. So I had some good familiarity but hadn’t really kind of dove in myself. <laugh>, so definitely would support. I did a lot of learning, a lot of listening, and a lot of reading.

John Farrell:

<laugh>. Absolutely. I find like myself, there are a lot of people who seem to have fallen into this work rather than intentionally gone into this work. I had a social justice background in myself and then ended up in energy. A lot of on the job training I like to tell folks.

Alex Hill:

Yes.

John Farrell:

So let me add, pivot and talk about this research. And maybe first a little more broadly about energy justice. So when I, when I hear people talk about energy justice, I feel like we’re typically talking about things like polluting power plants or maybe access to solar. So we’re thinking like power generation in the electricity side of things is what we often talk about and the like environmental implications of it. I guess one of the things I’m just curious about is what made you think of looking at the electric grid itself from this perspective of fairness and justice?

Alex Hill:

Yeah, well, so we had a really interesting rate case for one of the largest energy companies in Michigan, DTE, Detroit Edison, where they were requesting an increase in their rate. And so we had access to all these wonderful documents, <laugh> in the discovery for that case. So I was able to work with a lot of our coalition partners, Solardarity in Highland Park, which is Highland Park is surrounded by the city of Detroit, <laugh> where we are here. And they said, Hey, look at this. We had different networks of voltage serving very different communities where it was like, you know, Detroit was all one very old system that hadn’t been upgraded in close to 50 years. And then a whole different system that served kind of the suburbs further out. And then even some very specific municipal and industrial partners in kind of the downtown region of the city. I guess just being able to read through those discovery documents, it was very visibly apparent <laugh> that there was, there was something going on. Our hypothesis was this isn’t good and there’s gonna be an equity equity issue here and a racial disparity.

John Farrell:

Yeah. Can you talk a little bit more about that? So when you talk about the different grids, maybe a little more specific about what was different about them and maybe what are the, in particular, what are the implications for what the grid is capable of or its reliability and such given these differences that you were seeing between different communities?

Alex Hill:

So the example here, the majority of Detroit and the kind of inner ring suburbs, that’s what we call them, the ones that are kind of just adjacent to the city limit are primarily served by a 4.8 kilovolt system, which, you know, at this point is, is quite outdated. It’s ungrounded. So if there is an issue, you’re much more likely to be electrocuted, which has happened a lot unfortunately in Detroit and the metro area. And as far as reliability, it’s not even comparable <laugh>. When you look at kind of the reliability of the new and updated system to the old, it’s like nine times less reliable and has like nine times less hosting capacity. You can imagine it’s also much more difficult to then get that system back up and running and functioning if it does go down, which happens a lot.

John Farrell:

Yeah. I want to ask you about hosting capacity, since you mentioned that and explore a little bit more what that means for folks. But the ungrounded part is really sticking in my head right now. So I live in Minneapolis and have as a homeowner gone through the process of explaining to buyers or going through like our home inspection saying like, well some of our outlets in our house are ungrounded because when they first wired the house, it didn’t have a ground. And the implication of course, if something is ungrounded right, is like, oh, if I, I actually have a very old lamp for example, and for some reason when I plugged in my computer and my lamp into the same outlet, if I touched the lamp I would get a shock, right? And then if it, if an outlet or whatever’s properly grounded, if that, if there was having some issue like that, that that shock would go into the ground wire and not shock the individual, not shock the person. So it is a safety issue. I’d always thought that that was in an individual home that you would encounter this issue, but you’re telling me the whole grid system is not grounded? <laugh>.

Alex Hill:

So which means, you know, from from your example then, if a power line goes down, there’s no kind of backup, there’s no safety mechanism and you know, if people come into contact with that wire, they are much more likely to not survive. Whereas in the newer systems there are all those kind of safety mechanisms built in.

John Farrell:

Oh my gosh. Yeah. Okay. Well that definitely puts some color on your findings here in a way that I didn’t expect. Let me then ask you about the hosting capacity piece. So you mentioned it’s nine times less reliable, nine times less hosting capacity. Listeners of this podcast have probably heard me use that term before. In fact, we have an fabulous episode that I did with Yochi Zakai who works with the Interstate Renewable Energy Council on issues of hosting capacity. So this is about how much power generation or storage or things or electric vehicles or whatever that you can plug into the grid basically in particular, we usually talk about in the context of producing electricity. So what I hear you saying is these grids, because of their design, they can, you have much less hosting capacity, which means essentially from the perspective of like access to solar, it’s a lot less likely you’d be able to set up a solar array and on these, on this old grid because there wouldn’t be space for, it wouldn’t be capacity for it on the system to move that power around for the energy that you wouldn’t use on your own property.

Alex Hill:

Exactly. Yeah. And, and especially like things like even electric vehicles, you know, if everyone in the city of Detroit was able to get an electric vehicle tomorrow, the grid would explode. <laugh> It could not handle the capacity of folks kind of plugging in their electric vehicle and recharging them.

John Farrell:

Wow. And I want to pivot and ask you, because this was a part of a rate case when you were getting this information, through the discovery process and then putting together your report, I’m, I guess I’m kind of curious what do you think that the state’s utility regulators should do in response to this evidence? And if you’ve already presented it to them, has anything happened so far?

Alex Hill:

Yeah, so the rate case that we put this together for is done. There was a huge response from even just everyday folks coming out and being very unhappy <laugh> with the state regulatory agency and with the utility company and saying this rate case is absurd. Like we can’t, we just had millions of people without power for an extended period of time. There’s no way you can approve this rate case. Which it was a useful circumstance that there was a mass power outage right before this rate case was decided. And it really kind of helped folks kind of dig into the research and the background on what’s happening with their power and what this state sponsored energy monopoly <laugh> has been doing with the funding that they have been giving them through rate cases. I mean, I know our research was fairly impactful in pushing the state agency to demand more from the utility, or to ask for more answers because the utility wasn’t doing this research themselves.

They weren’t doing anything to ensure that they were studying and understanding equity across their systems. They weren’t doing anything to make sure there wasn’t any spatial racism appearing in how they were providing electricity. ‘Cause everyone pays the same rate, but not everyone is getting the same level of service. That’s really where we saw that redlining. So what ended up happening, the utility was requesting a 9% rate increase and what they got was a 0.9% increase, which is fairly significant. The state agency historically was just known for being kind of a rubber stamp. They would usually make some cut. So it looked like they were holding some accountability, but usually it was, you know, the utility came to the board and said, Hey, we want this. And they would like cut 25% off and approve it. And that was the kind of go-to. In this case, you know, they took a massive cut and said you need to do better next time to prove that you need this. I know our research was one small part of that ’cause there were a lot of folks mobilized around that rate case, although the utility turned around and submitted a request for a 19% rate increase <laugh> after their last one was denied. So they <laugh> they don’t sleep.

John Farrell:

Wow. I mean maybe there’s no plans. I suppose you already have the information that led to this report. I’m just curious though, given that they’ve come back with another rate case already, do you have plans to be involved in that rate case as you were in the last one?

Alex Hill:

Absolutely, yes. <laugh>, so we have a new, a new report coming out, <laugh>. So the utility would always say that their deciding factor in making improvements to the grid stemmed around population density and then kind of job density and economic growth or whatever. So all the jobs and economic opportunity are in downtown. So that sure, that proves their argument there. It’s not a great argument <laugh>, I don’t think it’s worthwhile. But then the other one with population density, you know, the city of Detroit, the downtown area is not the only or the most population dense area of the city. So there are pockets of population density that you’re just completely ignoring. And the other ones that they ignore happen to be, you know, Black and brown communities. So our next kind of research brief digs into Detroit’s population and demographic changes over time compared with where DTE is making these investments in the grid.

John Farrell:

That’s great. We’ll be looking forward to that coming out. When is that gonna be released by the way? If you know?

Alex Hill:

Uh, very soon. If not today <laugh>.

John Farrell:

Oh wow. All right. So maybe by the time next podcast is live, we should have a link to that. That’s great.

Alex Hill:

Yeah. <laugh>,

John Farrell:

We are going to take a short break. When we come back, I ask whether this form of grid redlining is common elsewhere, what the challenges are in getting the data from reluctant utilities, and Alex shares some lessons learned for duplicating this work in other places. You are listening to a Local Energy Rules podcast with Alex Hill, research director for We the People of Michigan.

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John Farrell:

So one thing that I was really curious about after reading your report, since ILSR does a lot of work across the country, my, one of my first reactions was, oh, I wonder if this is happening elsewhere. Are you familiar with any research or findings that look at this issue of kind of grid disparities across the country? Are you planning additional research either on like other utilities in Michigan or other places across the country?

Alex Hill:

Absolutely. So this, a lot of the work that we looked at first to kind of build our own research was some work out of California. So I mean obviously there’s the example of PG&E, which is a really, I mean truly it also it feels like our, our investor owned utility is trying to do the same thing where they’re just extracting, extracting, extracting as much as they possibly can from the system before they do any investment or they’re doing the bare minimum so they can just maximize profit, maximize profits. I mean even within their rate cases they have a majority of the rate increased funds are gonna go to investors. And then we’ve also presented with the folks at the Energy Policy Institute and from that we had a large response from folks in Washington DC and from Ohio. So it’s, it’s something that folks are, are seeing across the board and where they are.

What really varies is the level of access to information. So we got lucky with a rate case but not that lucky because what we had to go off of was, you know, pulling digital images of maps off of PDFs when we know all of that data actually exists as data sets that they could share with us if they really want it <laugh> to be transparent or open. So I know some other utilities are a little bit, more open with the data on their, on their grid and on their their systems, but there are still ways to do the research even if you just have the images <laugh>.

John Farrell:

Great. And then the other thing I was gonna ask you about is, you know, you mentioned you had to pull this information like digital images of maps off of PDFs, but you said you assumed the utility had it in a kind of more usable format. Did you request it and they denied giving you the sort of more accessible data and this is what you had to work with? Or did you just use what you had?

Alex Hill:

For the first rate case, I just geo-referenced the map images from the PDFs ’cause we were in a little bit of a time crunch. We also knew that it was extremely unlikely that they were gonna share any data ’cause they had already been fairly withholding with the actual data sets for the new rate case. They actually did share a spreadsheet that had a census tract breakdown of reliability stats, which was great because after the first rate case I was in invited to our state agency that regulates the utility. They had a work group around data sharing. Um, ’cause they’re gonna, they have these new data sharing regulations for the utilities. They have to do kind of a quarterly report on a whole bunch of different metrics. And they were trying to fight over at what granularity they were gonna report it <laugh>. And they kept saying, no, no, no, not the census tract level.

And then they turn around and <laugh> share a spreadsheet of census tract data for the next rate case. So we know they can do it and we know all the data is there just, you know, at their fingertips they can pull any report they want. And so we did request in the new rate case they had a breakdown of kind of conversion zones where there they were gonna do modernization of the grid and so we requested, you know, hey can you send us  the data shape files of these geographic areas, <laugh>. And they essentially said, no way, you can look at our, our free online tools and get the same information. Which isn’t true at all. They, and they knew that the free online tools had none of this information. <laugh>, we know that they’re sitting on some sophisticated data systems and they’re really not bringing those to bear when it comes to, you know, equitably planning the energy grid.

John Farrell:

Is there any hope that the, you know, public service commission will require them to share that data? Or is that not typically how that would play out when you try to get that information?

Alex Hill:

Since this was a request in the rate case we can make the request and then they give the rebuttal and then we can ask to have that elevated <laugh> when they say no way or you know, completely give us a non-answer. So right now it’s our decision if we want to elevate it or not. Again, it’s probably just easier to do reference the, the map images and run from there. <laugh>

John Farrell:

I suppose if I recall working with a couple other groups that have been involved in rate cases, you often need an attorney involved when you’re doing your filings. It can get pretty expensive to be party trying to fight with the utility over getting data if you have to go back and forth a lot.

Alex Hill:

Absolutely, yes. And especially when they’re as well resourced.

John Farrell:

With our money, conveniently. Right.

Alex Hill:

<laugh>, yes, <laugh>.

John Farrell:

I’m just curious if others wanted to try to mimic your work in other states or for other utilities. You, you know, you referenced that you did this presentation with Energy and Policy Institute and I will, I look up a link to that to share with folks so people can see your brief presented in another format. But what would you recommend people do to try to mimic this work? Because I can only imagine that as people would study this in other states, they would uncover a lot of the same inequities in behavior by other utilities, whether intentional or not. But we could probably learn a lot about how our grids are designed and the implications that it has for different communities, especially as could be impacted by the clean energy transition.

Alex Hill:

Right, absolutely. And I think in this case, this really is a local context because you know, there is no national grid <laugh>, everything is not connected. It is a crazy patchwork even within our single utility. It’s a patchwork of systems and grids. Some updated, some not. And then when we look at our state with, you know, we have two major utility companies but then there’s others in our Upper Peninsula who are serving, you know, there’s even Wisconsin utilities ’cause they border our Upper Peninsula that are are involved. So it’s really a wild mess. But that’s why I think having folks really drill down at their local context is really beneficial. So having a focus on our Detroit research and kind of being able to dive in specifically for our city was really useful. And then the others that I’ve worked with so far, so I’m particularly thinking of Washington DC, they had a really clear focus on the city versus the capital. <laugh> was a strong, you know, they could already just look at the utility data that was available online and see that very clear line of disparity.

John Farrell:

Yeah. I’m glad you brought up Washington DC because I guess what I’m curious about is, is the process to do this kind of analysis similar, would you say that if people wanted to try to do this in another place, like in Washington DC, like did you know for example, did they do that through a rate case? Was that the way they were able to get access to the data? Is, is that what people should be thinking about is hey, the rate case is my opportunity, I should look at into how I can participate in that or partner with other groups that are already doing that work? Or are there other ways to get this data, other ways of going about this if folks are interested in mimicking what you’ve done?

Alex Hill:

Right? Yeah, yeah. So definitely step one is, is understanding your utility and how interested they’re in sharing information, <laugh> and I guess kind of first vetting what information they’re already sharing. So in the case of Washington DC they already had the data freely available online in a usable format, which was great for them. For ours we knew, you know, DTE is not, is not kind and does not share data <laugh>. So we had to find some other routes to get to that data and the rate case ended up being a really great opportunity.

John Farrell:

I wanna ask you a very specific question and it’s totally fine if you don’t know the answer to this, but I was wondering back to that issue of hosting capacity. So some, there are a number of states and I think it’s a small number, maybe like a half dozen that have utilities that are required to do hosting capacity studies. So they actually have to report to the public service commission or public utilities commission and sometimes even post publicly like here’s how much capacity we have on our grid system in different places. I was wondering if you think that data would actually be the good basis, be a good basis for this? I’m wondering about in Minnesota right now, I’m like, Xcel energy has this hosting capacity study. I wonder if the information we’d want, if we wanted to mimic your work in Michigan here would already be available there. Do you think that’s likely that there might be an opportunity there? Or maybe you just don’t know, I don’t know how did you work with hosting capacity data and maybe it’s very different.

Alex Hill:

No, you’re absolutely right. That is, that is a perfect place to start looking because the hosting capacity reports, they’re gonna have all that information. The one thing we found with some other state we were working with where, you know they have all these, these hosting capacity reports and they’re really useful, have a lot of great information. But the one thing we found that was often missing was kind of that geographic breakdown of where the capacity actually was. And that was what was really essential for our research and for really digging into how is the utility company actually choosing which communities they’re investing in not, or are there some that they prioritize and others that they just totally forget about.

John Farrell:

That’s really helpful. ‘Cause I was thinking Minnesota or Xcel Energy has, there’s an online map so that you do have this sort of geo-reference stuff, but you know, you have to click on each little distribution feeder if you wanna get specific information. And I remember in their filing there’s also a huge spreadsheet that has like every substation, every feeder and like how much hosting capacity it has and sort of what the limiting factors are. But it’s not, that information is not like geo reference. So if you wanna know where that substation is and that feeder is, you have to like go back to the map and try to figure it out and like understand so there’s no census data or anything else that would allow you to do that. I imagine the useful connections there between a demographics of a community and hosting capacity, you know, a lot the work that you’ve done.

Alex Hill:

Right, right. Yeah, absolutely.

John Farrell:

Anything else that has is sitting in your mind where you’re like, oh I really ought to talk about this or wanna share about this from the process of going through this lessons learned that you think people would really benefit from?

Alex Hill:

Yeah, I mean I think, you know, there was a handful of folks whose response was, okay, now what you’ve told us this is terrible in our community or that we’re being underserved or, but what can we do? The research is the fairly easy part. And thankfully I was able to do that research within an organization like We the People Michigan that, you know, it’s an organizing entity in and of itself. So we were working on actively mobilizing people before this rate case happened. And then also during, so then it wasn’t just kind of the knowledge to have the knowledge, it gave people an opportunity to then work with others in the community and, you know, learn how to give a public comment or even find out when the next public comment is gonna be. ‘Cause sometimes they make that confusing on purpose <laugh>. But I think that was the, I don’t know, I feel like that was probably the most critical part of the work that we did was that it wasn’t, it wasn’t just research to generate the knowledge but you know, it was research for the community.

John Farrell:

Well Alex, thank you so much for coming on to share about the work that you’ve put together here. I just thought it was terrific to give people some perspective of different ways that disparities can show up on the system, but also to me really highlights how in our thinking about clean energy transition, whether it’s solar or electric vehicles or heat pumps or all the cool things that we talk about, that all of that is relying on this backbone of the grid. And I think we have this presumption that it’s the same everywhere. Like the upgrades are gonna happen for the customer at the customer level and maybe not thinking that, oh my gosh, we might have to be starting from very different places in one community to another. So I just think that the work you’ve done really illustrates something that we all need to pay very close attention to. And so for that, I’m very thankful for both the research you’ve done and for taking time to come explain it in a little more detail with me today.

Alex Hill:

Yeah, definitely. Thanks so much for having me.

John Farrell:

Thank you so much for listening to this episode of Local Energy Rules with Alex Hill, research director for We the People Michigan, where we discussed redlining and electricity service and its implications for the clean energy transition. On the show page, you’ll find links to the Utility redlining policy brief by We the People Michigan, including the new report Alex mentioned on the podcast. We’ll also link to my prior interview on utility hosting capacity with Yochi Zakai – episode 135. And if you like this episode, you might also like my interview with Ted Thomas, former chair of the Arkansas Public Service Commission, in episode 173. We’ll also have some links to ILSR’s other research on grid interconnection, as well as two great podcasts with Sky Stanfield and Mari Hernandez about the tug of war between our clean energy advocates and utilities over getting clean energy on the grid. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.