DTE Power Supply Cost Reconciliation Docket for 2023
Synapse provided expert witness testimony on behalf of the Michigan Environmental Council (MEC) in DTE’s Power Supply Cost Reconciliation docket for the 2023 calendar year. Our testimony evaluated the causes and drivers of DTE’s under-recovery of fuel and power cost expenses in 2023, with a focus on the reasonableness of DTE’s fuel charges and plant operational practices.
We investigated DTE’s use of its 13 peaking plants and evaluated whether their unusually high usage was economic for ratepayers. We also assessed DTE’s management of warranty and maintenance outages at the Blue Water Energy Center (BWEC) and other baseload plants, reviewing the replacement power costs incurred during those outages. Additionally, we reviewed the company’s natural gas transportation contracts—specifically with the NEXUS pipeline—as well as its gas storage contracts and management of excess NEXUS pipeline capacity. We evaluated the reasonableness of DTE’s operational practices at its coal- and gas-fired power plants, and whether DTE made prudent and economic unit commitment and reserve decisions.
We found that BWEC underwent two planned outages in 2023 for routine and warranty maintenance. Both outages extended beyond the original schedule, and DTE incurred substantial replacement power costs—$6.4 million of which were attributed to the extensions required to complete warranty maintenance. We found that DTE relied on its peaking fleet far more than planned in 2023, with its large gas turbines collectively generating 288 percent more MWh than expected. At the same time, DTE relied on its baseload fleet less than planned, with unplanned outages resulting in $4.6 million in replacement power costs. We also found that the cost of DTE’s NEXUS pipeline capacity exceeded its supply value by approximately $6.0 million in 2023—continuing a pattern from previous years of incurring greater costs than benefits.
Synapse recommended that the Commission disallow the $6.4 million in replacement power costs incurred during the BWEC outage extensions related to warranty maintenance, on the basis that DTE has not justified why ratepayers—rather than the company, contractor, or manufacturer—should be responsible for those costs. We also recommended that the Commission disallow the $6.0 million in net costs incurred from the NEXUS pipeline.