WORRIES ABOUT CHINA. WE’LL TALK ABOUT THAT TOO, ALL TODAY. ON FLASHPOINT.
WE’RE COMING TO YOU FROM INSIDE
THE COMMAND CENTER FOR DTE IN
DOWNTOWN DETROIT, A PLACE THAT
HAS BEEN WAY TOO BUSY AND TRYING
TO SOLVE WAY TOO MANY PROBLEMS
OVER THE LAST COUPLE OF WEEKS
FOR THE FOLKS WHO WORK HERE, AND
THAT CERTAINLY INCLUDES THE CEO
OF DTE JERRY NORCIA, JERRY,
THANKS SO MUCH FOR THE TIME.
THANK YOU, DEVON AND GOOD
AFTERNOON. GOOD TO HAVE YOU
HERE. I WE REALLY APPRECIATE THE
INVITATION. I IT’S NOT NEWS TO
YOU TWO FOR ME TO TELL YOU THAT
YOU HAVE A LOT OF ABSOLUTELY
FURIOUS CUSTOMERS. WHAT ARE YOU
TELLING HIM? WHILE WE COMPLETELY
UNDERSTAND, YOU KNOW, LAST
WEDNESDAY NIGHT, WE HAD A
HISTORIC HIGH STORM THAT ROLL
THROUGH WEDNESDAY NIGHT THROUGH
THURSDAY NIGHT, AND AT THE END
OF ALL OF THAT WE HAD ABOUT 1.7
MILLION CUSTOMERS ARE STILL HAD
POWER. BUT THAT’S WHAT’S NOT
IMPORTANT. WE HAVE 630,000
CUSTOMERS WITHOUT POWER THAT
EVENING, AND WHILE WE RESTORED
50% YOU KNOW BY FRIDAY NIGHT AND
80% BY SATURDAY NIGHT AND 98% BY
SUNDAY NIGHT. WE HAD ABOUT 14 OR
15,000 CUSTOMERS THAT ROLLED
INTO MONDAY, TUESDAY AND
WEDNESDAY, AND I JUST HAVE TO
SAY TO MY CUSTOMERS THAT’S
UNACCEPTABLE TO HAVE THAT
LENGTHY OF AN OUTAGE. WE’VE MADE
TREMENDOUS INVESTMENT IN THE
SYSTEM, WHICH I’D LIKE TO TALK
TO YOU ABOUT. BUT WE NEED TO DO
MORE SO THAT ALL OF OUR
CUSTOMERS HAVE THE SAME
EXPERIENCE THAT AT 1.7 MILLION
CUSTOMERS HAD EVEN IN A HISTORIC
ICE STORM. THE GRID NEEDS TO
STAND UP TO THESE INCREASINGLY
SEVERE WEATHER PATTERNS. SO
THAT’S WHAT I WOULD LIKE TO SAY
TO MY CUSTOMERS. WE ARE GOING TO
DO BETTER. WE WILL BE BETTER AND
WE’RE INVESTING BILLIONS AND
WE’LL TALK A BIT MORE ABOUT
THAT. BUT I ALSO WANT TO JUST
BEFORE WE STOP. UM IS I’D LIKE
TO CERTAINLY SHOW APPRECIATION
FOR THE 4000 PEOPLE. THAT ARE
OUT IN THE FIELD, EVEN TODAY,
RESTORING POWER AND MAKING
PERMANENT REPAIRS. WE HAD 2000
MICHIGANDERS, INCLUDING 1000, DT
EMPLOYEES, AS WELL AS 2000 OUT
OF STATE WORKERS THAT CAME TO
ASSIST AND JUST WANT TO EXPRESS
MY GRATITUDE TO THEM. WE KNOW IT
TAKES AN ARMY TO TRY TO RUN THIS
EVEN IN THE BEST OF
CIRCUMSTANCES. THEN YOU HAVE
CONDITIONS LIKE THIS, BUT WE
ALSO HAD A BIG PROBLEM WITH
EXPECTATION MANAGEMENT. YOU
KNOW, DON’T TELL ME MY POWER IS
GOING TO BE BACK ON ON SUNDAY.
IF I’M GONNA NOT ACTUALLY SEE
POWER UNTIL THE FOLLOWING
TUESDAY OR WEDNESDAY. I MEAN,
WHERE WAS THE WHY WAS THAT
MISTAKE MADE IN MAY BE
UNDERESTIMATING WHAT IT TOOK TO
GET BACK ONLINE. GREAT QUESTION.
YOU KNOW, WE GET THESE TYPES OF
ICE STORMS EVERY 50 OR 60 YEARS
. SO TYPICALLY WHEN WE PRODUCE
AN ESTIMATE, IT’S BASED ON A
HISTORIC INSTANCES WHERE WE’VE
HAD OUTAGES AND SO MANY
CUSTOMERS AND SO MANY DEVICES
THAT ARE THAT APPEAR DISABLED ON
THIS SCREEN, AND WE MAKE AN
ESTIMATE. BUT WHEN YOU ARRIVE ON
THE JOB, AND YOU ACTUALLY SEE
THE DAMAGE, IT WAS A LOT MORE
EXPENSIVE EXTENSIVE THAN ANY OF
OUR MODELS HAD PREDICTED. THAT’S
WHY WE ON THURSDAY AND FRIDAY,
WE BROUGHT AN INCREMENTAL 1000
WORKERS AND BECAUSE THE DAMAGE
WAS MUCH WORSE, SO WE ARRIVED AT
THE JOB. WE FOUND THAT IT WAS
GOING TO TAKE A LOT LONGER TO
REPAIR. THAT’S WHY ESTIMATES
CHANGED. NOT IDEAL. NOT GREAT
FOR OUR CUSTOMERS, BUT THESE ARE
VERY RARE EVENTS THAT ARE
HAPPENING MORE AND MORE OFTEN,
THAT’S WHAT I WAS GOING TO SAY,
RARE BUT INCREASINGLY LESS RARE
. WE HAD A HUGE WIN PROBLEM LAST
SUMMER. AS A MATTER OF FACT,
LAST AUGUST, WHERE WE HAD LOTS
OF OUTAGES WE WERE TOLD IN THE
DTE WAS MAKING LOTS OF CHANGES
AND LOTS OF IMPROVEMENTS. I WANT
YOU TO TALK ABOUT THOSE BECAUSE
IT WOULD APPEAR THAT THEY’RE NOT
ENOUGH YET. THEY’RE NOT ENOUGH
YET. I THINK THAT’S A CORRECT
CONCLUSION. WE’VE INVESTED ABOUT
$5.5 BILLION IN A GRID OVER THE
LAST FIVE YEARS AND DONE
THOUSANDS AND THOUSANDS OF MILES
OF TREE TRIMMING AND OVER THE
NEXT FIVE YEARS WILL INVEST OVER
$9 BILLION IN THE GRID, SO WE’RE
MAKING FUNDAMENTAL INVESTMENTS
TO HAVE A BEST IN CLASS GRID AND
WHAT’S HAPPENING? DE’VEON IS
THESE EVENTS THAT USED TO
HAPPEN. EVERY 50 OR 60 YEARS ARE
HAPPENING EVERY TWO OR THREE
YEARS. THE WEATHER PATTERNS ARE
FUNDAMENTALLY CHANGING, AND WE
STARTED TO SEEING THIS HAPPENING
ABOUT 5 TO 7 YEARS AGO, AND
THAT’S WHY WE RAMPED OUR TREE
TRIMMING BY 300% WE’VE GOT 1500
TREE TRIMMERS ON SITE EVERYDAY
TRIMMING TREES WE’VE GOT OVER
1000 LINE WORKERS, IMPROVING THE
INFRASTRUCTURE, WITH A BILLION
AND A HALF A YEAR OF CAPITAL
BEING INVESTED LAST YEAR AND
JUST AS MUCH THIS YEAR AND ABOUT
NINE BILLION OVER FIVE YEARS, SO
WE ARE INVESTING HEAVILY AND
WHERE WE’VE MADE THE INVESTMENTS
. IT’S BEEN FABULOUS PERFORMANCE
. WE GET. FOR EXAMPLE, IN
DETROIT IN THE LAST FIVE YEARS,
WE’VE SEEN A 45% REDUCTION IN
OUTAGES JUST IN THE CITY OF
DETROIT, WHERE WE’VE INVESTED
EXTREMELY HEAVILY. EVERY STATE
RIGHT NOW, THOUGH, IS DEALING
WITH INCREASED AND MORE
HYPERACTIVE WEATHER. IT WOULD
SEEM AND YET YOU’RE I’M SURE
YOU’RE FAMILIAR WITH THE
CITIZENS UTILITY BOARD
BREAKDOWN. THAT SHOWS THAT
MICHIGAN THE WORST EFFICIENCY
WHEN IT COMES TO AND RELIABILITY
WHEN IT COMES TO UTILITIES IN
THE COUNTRY, I THOUGHT, WELL,
MICHIGAN HAS MORE TREES. MAYBE I
STARTED LOOKING INTO IT.
WASHINGTON STATE SECOND BEST
MINNESOTA NINTH BEST, EVEN
WISCONSIN. I THINK, 24TH OR 25TH
BEST. WHY ARE WE LAGGING THE
REST OF THE COUNTRY IN OUR
RELIABILITY OF OUR OF OUR
SYSTEMS? GREAT QUESTION. LET ME
BREAK IT DOWN FOR YOU. SO
THERE’S REALLY TWO COMPONENTS TO
RELIABILITY. ONE IS THE NUMBER
OF OUTAGES INTO THE AMOUNT OF
TIME THAT IT TAKES TO RESTORE
THOSE OUTAGES. SO FROM A NUMBER
OF OUTAGES PERSPECTIVE WERE
ABOUT AVERAGE IN A COUNTRY WHICH
IS STILL NOT GREAT. WE DON’T
HAVE THE BEST GRID IN TERMS OF
NUMBER OF OUTAGES IN THE
FREQUENCY OF OUTAGES. THAT
DURATION IS BELOW AVERAGE. THE
AMOUNT OF TIME THAT IT TAKES TO
RESTORE. I MIGHT SAY WHY IS THAT
ABOUT 16,000 OF MILES OF OUR
GRID IS QUITE OLD, WAS BUILT IN
THE FORTIES FIFTIES AND SIXTIES
AND IN VERY OLDER, OLDER CITIES
LIKE DETROIT, CROSS POINT, ROYAL
OAK BIRMINGHAM HAVE A VERY AGING
SET OF GREAT EQUIPMENT. AND WHAT
WE NEED TO DO, AND ALSO DOESN’T
HAVE AUTOMATION. AND I THINK I
WAS DESCRIBING THE EARLY ONCE
YOU INTRODUCE MORE AND MORE
AUTOMATION. THAT’S WHY WE BUILT
THIS CONTROL CENTER BECAUSE THE
OLD CONTROL CENTER COULDN’T TAKE
ALL OF THE AUTOMATION DATA
COMING IN THIS ONE WILL AND AS
THAT, WE INTRODUCED MORE AND
MORE AUTOMATION. WE CAN ISOLATE
OUTAGES FROM THIS CONTROL CENTER
. SO IF A TREE GOES DOWN AND
KNOCKS THE WIRE DOWN AND OXEN
PULL DOWN, WE CAN ISOLATE THAT
LOCATION AND SEND OUR CREW RIGHT
TO THE BLOCK WHERE THE ISSUE IS
AND RESTORE ALL OF THE OTHER
CUSTOMERS. THEY NEED TO SIDE OF
THE OUTAGE IMMEDIATELY. SO YOU
TAKE 1000 CUSTOMER OUTAGE THAT
LAST SIX OR SEVEN HOURS INTO A
100 CUSTOMER OUTAGE THAT LASTS
SIX OR SEVEN HOURS BECAUSE YOU
RESTORE THE REST OF THEM
IMMEDIATELY, SO THAT’S WHAT’S
REQUIRED ON A SYSTEMS AUTOMATION
, AND WE ALSO NEED TO UPGRADE TO
POLES AND WIRES AND TRANSFORMERS
16,000 MILES OF IT. SO THAT IT
PERFORMS AT THE SAME LEVEL AS
THE OTHER 75% OF OUR GRID, WHICH
I’M ASSUMING IS PART OF WHY
YOU’VE TWO WEEKS BEFORE THIS ALL
HAPPENED. WE’RE REQUESTING A
RATE INCREASE. YOU NEED MORE
INVESTMENT, BUT THE TIMING WAS
NOT LOST ON A LOT OF PEOPLE.
YOU’RE GOING TO ASK ME MORE FOR
MORE MONEY WHEN MY SERVICE IS
WHAT IT IS. WHAT THE REALITY IS,
IS THAT FOR FOUR YEARS WE HAVE
NOT ASKED FOR PRICE INCREASE. IN
OUR DELIVERY RATES, AND WE’VE
INVESTED $8 BILLION INTO THE
GRID. AND IF WE’RE GOING TO
INVEST ANOTHER $9 BILLION IN A
GRID, WE’RE ASKING FOR ABOUT AN
8 TO $9 PER MONTH INCREASE THAT
COVERS THAT FOUR YEARS WITHOUT
ANY INCREASE, AND ALSO SOME
FUTURE INVESTMENTS. WE’VE WE’VE
RECEIVED A TON OF QUESTIONS FOR
ME TO ASK YOU. ONE OF THEM SAID
I SPENT HUNDREDS OF DOLLARS ON
HOTELS AND FOOD AND DT IS ONLY
GIVING ME A $35 CREDIT. WHY
CAN’T YOU REIMBURSE ME FOR THE
TOTAL LOSSES? I WANT TO ASK YOU
ABOUT THE $35 CREDIT. A LOT OF
PEOPLE FOUND THAT INSULTING AND
A LOT OF PEOPLE WERE TELLING ME
IT WAS WORSE THAN GIVING ME
NOTHING. WHAT IS $35 FOR? LOOK
AT THE $35. I WOULD AGREE IS NOT
GOING TO COVER THE TYPE OF
EXPENSES THAT AN EXTENDED OUTAGE
WOULD CAUSE. YOU KNOW, HOTEL
STAYS LOSS OF FOOD AND THAT SORT
OF THING. AND WHEN WE WORK WITH
OUR REGULATOR, WE’RE TRYING TO
FIND A BALANCE FOR HOW MUCH DO
WE REIMBURSE FOR AN OUTAGE
VERSUS HOW MUCH DO WE REINVEST?
AND MAKING THE FUTURE BETTER AND
MAKING A GRID BETTER IN ADDITION
TO THAT BEYOND THAT, DEVIN JUST
SO THAT, YOU KNOW, WE’VE
PARTNERED WITH LOCAL AGENCIES ON
SUPPLYING FOOD RESOURCES TO
CUSTOMERS THAT ARE HAVE THE
LEAST AMOUNT OF RESOURCES AMONG
US AMONGST US ARE LOW INCOME
CUSTOMERS. WE ARE GOING TO
CONTACT ALL OF THOSE THAT WERE
IMPACTED AS WELL AS GENERALLY A
GREAT NUMBER OF THOSE THAT ARE
IN NEED OF FOOD RESOURCES, SO
WE’RE GOING TO DO THAT, ABOVE
AND BEYOND. WHAT OUR FOUNDATION
ONE OF THE OTHER QUESTIONS THAT
WE GOT OFF AND WHAT IS BEING
DONE. YOU’VE TALKED ABOUT THIS A
LITTLE, WHAT IS BEING DONE TO
PREVENT THIS FROM HAPPENING
AGAIN? AS WE HEAD INTO THE
SPRING? WE KNOW THAT’S REALLY
WHEN WE’RE SUPPOSED TO GET ICE
STORMS. WE HAVE FUTURE PROBLEMS
AHEAD OF US. WHAT CAN WE DO IN
THE SHORT TERM TO TRY TO MAKE
SURE THAT WE DON’T HAVE THAT
KIND OF? I JUST NEED TO CONTINUE
INVESTING, DEVIN, THIS IS GOING
TO BE A LONG TERM SOLUTION, YOU
KNOW, THE GREATEST AGED OVER
MANY DECADES. AND AS WE TACKLE
MILE AFTER MILE OF THE GRID AND
B, REMAINED PERSISTENT AND
CONTINUE TO INVEST. WE NEED TO
INVEST HEAVILY IN ITS GRID TO
PREPARE IT FOR TWO THINGS. ONE
IS THE FACT THAT WORSENING
PATTERN OF CLIMATE PATTERNS ARE
WORSENING AND I ATTACKS ON OUR
GRID ARE BECOMING MORE AND MORE
VIOLENT. FROM A WEATHER
PERSPECTIVE TO WE’VE ALSO GOT
GROWING DEMAND. COMING WHICH IS
TVS, SO WE NEED TO PREPARE FOR
BOTH. AND THAT’S WHY THESE
INVESTMENTS ARE FUNDAMENTAL AND
THE FUTURE PROSPERITY OF
MICHIGAN. WE NEED A RELIABLE
GRID, A SAFE GRID TO ENSURE THE
FUTURE PROSPERITY OF THIS STATE
. THOSE WHO ARE VERY CYNICAL
ABOUT THEIR TRANSFER THE TRANS
FOR INTO THE IV CHUR. THIS IS
ONE OF THE THINGS THEY POINT
OUT. THAT OUR GRID IS IN NO WAY
READY FOR THAT. YOU LOOK AT THE
INVESTMENTS THAT THE STATE IS
MAKING RIGHT NOW. ARE YOU
CONVINCED THAT WE CAN HANDLE IT?
WE CAN HANDLE IT. IF WE CONTINUE
TO MAKE THE INVESTMENTS THAT
WE’RE MAKING IN A GRID, YOU
KNOW, AS WE CONTINUE TO
TRANSFORM THE CONDITION OF OUR
GRID WITH $9 BILLION GOING IN
OVER THE NEXT FIVE YEARS, IT’S
GOING TO FUNDAMENTALLY CHANGE IN
FIVE YEARS AND IN 10 YEARS WE’LL
HAVE INVESTED PERHAPS OVER $20
BILLION INTO THE GRID. IT IS A
SIGNIFICANT INVESTMENT TO
PREPARE FOR BOTH OF THESE
EVENTUALITIES, WHICH IS
INCREASINGLY WORSENING WEATHER
PATTERNS AS WELL AS TV DE’VEON.
WE’RE ATTACHING ABOUT 1000 TVS
EVERY MONTH TO OUR GRIP,
GOVERNOR WHITMER SAID THIS PAST
WEEK. WE’VE GOT TO MAKE SURE
THAT WE’VE GOT ACCOUNTABILITY
HERE. SHE’S TALKING ABOUT YOU,
ISN’T SHE? I THINK SHE’S TALKING
ABOUT ME AND THE ENTIRE COMPANY
AND WE’RE HAPPY TO BE
ACCOUNTABLE FOR WHERE WE MAKE
OUR INVESTMENTS AND IMPROVE THE
QUALITY OF THE GRID. LIKE I SAID
75% OF THE GRID OPERATED JUST
FINE DURING A HISTORIC ICE
STORM. AND WE NEED TO SHOW THAT
THE INVESTMENTS THAT WE’RE
MAKING ARE INCREASING THE NUMBER
OF CUSTOMERS THAT CAN SUSTAIN
THAT TYPE OF ATTACK ON THE GRID
, AND WE WILL DO THAT. WE’RE
HAPPY TO DO THAT. THE LAST
QUESTION. I WANTED TO ASK THEN
IF WE ARE THE FIFTH WORST IN THE
COUNTRY AT RELIABILITY. HOW LONG
CAN IT REASONABLY TAKE FOR US TO
MOVE UP MUCH, MUCH HIGHER WHERE
WE BELONG? I WOULD SAY THAT. YOU
KNOW, WE HAVEN’T BEEN INVESTING
HEAVILY FOR THE LAST FIVE YEARS
AND OVER THE NEXT FIVE YEARS, I
THINK WE WILL CLIMB THAT LADDER
TO BEING AT LEAST MEDIAN
PERFORMANCE AND THEN WE’RE GONNA
CONTINUE TO BUILD THE BEST IN
CLASS GRID AND BUILD A FLAWLESS
GRID FOR OUR CUSTOMERS AND FOR
THE CITIZENS OF MICHIGAN, WHICH
THEY DESERVE IT LONG, THOUGH, I
WOULD SAY IT WOULD TAKE A DECADE
TO DECADE TO BE BEST IN CLASS. I
DO HAVE ACTUALLY ONE MORE
QUESTION BECAUSE THIS IS THE
OTHER QUESTION THAT WE GET ALL
THE TIME PLACES. UH NEW BUILDS
OFTEN GET THEIR LINES PUT IN THE
GROUND. CORRECT EVERYBODY WANTS
TO KNOW IN A CERTAIN POINT, AS
EXPENSIVE AS IT IS, DOESN’T IT?
MAKE MORE SENSE TO GET THOSE
POWER LINES DOWN AND PUT THEM IN
THE GROUND AS EXPENSIVE AS IT
CAN BE. LOOK HOW EXPENSIVE IT
WAS TO KEEP THEM IN THE AIR THIS
PAST COUPLE OF WEEKS. WELL IT’S
A GREAT QUESTION, AND ABOUT A
THIRD OF OUR SYSTEM IS
UNDERGROUND, NOW TWO THIRDS THAT
WAS BUILT BEFORE THE 19 SIXTIES
IS ABOVE GROUND, ESPECIALLY IN
THE SORT OF RESIDENTIAL
NEIGHBORHOODS ALL RESIDENTIAL
NEIGHBORHOODS THAT HAVE BUILT
TODAY AND ALSO COMMERCIAL
ESTABLISHMENTS. ALTHOUGH
UNDERGROUND WE ARE LOOKING TO
SEE. CAN WE BRING THE COST DOWN?
BECAUSE RIGHT NOW IT’S A
MULTIPLE PUTTING LINES
UNDERGROUND IS COST MULTIPLE
TIMES MORE THAN PUTTING THE
LINES ARE LEAVING THE LINES UP
IN THE AIR. BUT AS WE REBUILD
THIS GRID AND REALLY TRY TO
TRANSFORM THAT 16,000 MILES,
WHICH IS THE OLDEST PART OF OUR
GRID REALLY HARD AT HOW MUCH OF
THAT CAN WE PUT UNDERGROUND, AND
WE’RE GONNA SEE IF WE CAN
COMPRESS THE COST AND GET THE
COST DOWN. I THINK THE MORE WE
TRY AND THE MORE WE DO. WE CAN
FIND WAYS TO MAKE THAT MORE AND
MORE EFFICIENT, SO WE ARE
COMMITTED TO TRYING IT AND
MAKING IT HAPPEN. THAT’S A