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Consumers Energy fined $1M over complaints of faulty meters, delays in electric and gas services

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Consumers Energy fined $1M over complaints of faulty meters, delays in electric and gas services

May 27, 2024 | 6:49 am ET
By Kyle Davidson
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Consumers Energy fined $1M over complaints of faulty meters, delays in electric and gas services
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A Consumers Energy bill | Susan J. Demas

Consumers Energy, one of the state’s largest energy providers, has agreed to pay $1 million after state energy regulators investigated complaints of malfunctioning electrical meters, violations of rules on estimated billing and significant delays in providing new electric and gas service.

The Michigan Public Service Commission (MPSC), which regulates energy and telecommunications companies within the state, learned about the issues in March 2023 from customers who attended a town hall hearing in Jackson focused on taking comments from people impacted by power outages that winter. 

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The commission’s customer assistance staff also took complaints from customers about broken electrical meters, extended billing cycles with “excessively high” estimated electrical use, and lengthy delays in gas and electric service hookups.

Consumers Energy has faced repeated criticisms on the quality and reliability of its services, with members of the House Energy, Communications and Technology Committee pressing the company on its plan to address future long-term outages after an ice storm in February 2023 left thousands of Michigan households without power for days.

In October, the commission instructed consumers energy to show cause as to why it should not be held in violation of the MPSC’s rules governing billing and service quality and reliability.

According to a statement from the commission, the metering issue was tied to Consumers’ transition from 3G cellular meters to 4G meters, with staff investigating the issue finding that supply and staffing constraints prevented the company from meeting its expected time frame for replacing older meters, with the company neglecting to inform the commission about the delays and service issues.  

Staff also discovered Consumers Energy was estimating electric bills for customers with 3G meters before cellular phone companies discontinued 3G Service because the meters were not working and showed blank screens, meaning Consumers and its customers could not determine the meter’s actual readings. 

“It is a fundamental job for a utility to measure the amount of electricity used and then accurately bill their customers,” MPSC Commissioner Katherine Peretick said in a statement. “There was a clear and obvious failure here, and this $1 million fine and the corrective actions required in the settlement agreement will hopefully ensure this doesn’t happen again.”

The commission also investigated the complaints about establishing new service, which violated its standard requiring 90% of new service installations to be completed within 15 days. 

According to the commission, Consumers acknowledged its customer service issues and did not contest the commission’s enforcement recommendations, saying it would focus on rectifying the problems and working to prevent them in the future.

Consumers Energy has not responded to a request for comment as of the time of publication. 

With MPSC staff determining the company had shown significant improvements in addressing the metering and estimated billing issues and the delays in service, the parties in the case — which include Consumers Energy, the MPSC and Michigan Attorney General Dana Nessel — agreed on the $1 million fine, which Consumers cannot recover through customer rates. 

Under the requirements of the settlement, Consumers Energy must also:

  • Disclose any known issues that may affect future company requests for waivers of MPSC rules.
  • Not seek recovery of company costs resulting from estimated customer bills.
  • Submit semiannual reports for two years detailing consecutive meter reading estimates, timelines for new electric and gas service installations and reporting meter failures.
  • Improve its processes for new service installations.