‘Utility redlining’: Detroit power outages disproportionally hit minority and low

City's electricity provider uses resilient lines in richer and whiter areas while poorer districts suffer from failure-prone equipment

In late August, strong thunderstorms rolled through metro Detroit, knocking out power for six days at Marlene Harris-Bady's Highland Park home. It was the second long outage that month in the largely low-income neighborhood, and Harris-Bady said she and her husband endure similar outages about five times annually.

"It's always a big mess and this has been going on for years," Harris-Bady said, adding that DTE Energy, the private utility serving the area, always tells her the problem is with a nearby transformer. A few miles away, in a wealthier suburb, Harris-Bady's sister lost power during the August storm for only a few hours, and rarely endures long outages.

A new report proposes an explanation: DTE has generally disinvested in low-income and minority neighborhoods, and spends more resources on improving service in whiter, wealthier areas.

The type of power delivery system DTE most often operates in the region's low-income and minority neighborhoods is antiquated, and equipment like poles and transformers in these areas are generally much older and beyond their expected life. The policy brief, written by Michigan consumer advocates with data gleaned from regulatory hearings, characterizes the situation as "utility redlining".

"DTE predominantly underserves an area that has higher percentages of Bipoc and people experiencing poverty," the brief, co-written by We the People Michigan and Soulardarity. "It's a textbook example of an inequitable electric distribution system."

DTE faces ongoing criticism over frequent and long outages in Detroit caused by an aging grid and strong storms that occur more often as the climate changes. Federal data from 2019, the most recent year available, shows Michigan customers experienced the fourth longest average duration of outages, and DTE ranks among the worst utilities in the metric in Michigan.

Though state regulators have asked DTE for more granular data that would show outage frequency and duration in areas served by the two systems, it has not yet been publicly released.

In a statement to the Guardian, the company highlighted recent upgrades and maintenance, like tree trimming, that it says have reduced the number of outages in Detroit. A spokesperson also pointed to several wealthier, whiter cities served by the older system, and noted plans to upgrade its entire service area to the newer system, though it didn't provide a timeline.

Throughout the DTE service area, wealthier and whiter communities are most often served by 13.2kV lines, while lower-income and minority communities are generally served by a 4.8kV system installed over 60 years ago.

The newer systems are much more resilient and capable of weathering a storm without widespread, long outages because they have about three times as much voltage capacity, according to industry literature. When an outage occurs, the newer system enables utilities to restore service faster by rerouting customers to an adjacent circuit without making repairs, and the newer system provides more circuits.

The newer systems also integrate advanced technology that helps improve service with solar, storage and electric vehicle charging stations.

Minority customers largely do not get those benefits, the report finds. About 90% of residents served by the older system in Detroit are minorities, as are about 24% outside of the city. Only about 21% of those served by DTE's newer system are minorities.

Similarly, residents living below the poverty line comprise about 38% of DTE customers served by the older system inside Detroit and 15% outside Detroit. Only about 10% of customers served by the newer system live beneath the poverty line.

DTE and utilities around the country generally invest in areas where there is economic growth, an approach that favors wealthier, whiter suburbs. The company has said in regulatory hearings that it does not consider race or income when making improvements, said Jackson Koeppel, a co-author of the brief and independent consultant for Soulardarity.

"We know that race- and income-blind policies are self-fulfilling prophecies that will keep poor and non-white communities underdeveloped," he said.

The report also looked at the age of the utilities’ infrastructure, including substations, switchgear, poles, cables and transformers, and found all except poles were beyond their industry expected life in older areas.

Substations have an industry life expectancy of 45 years, while the average age in DTE's newer system is 32 years compared with 53 years in its older system. Cables in the utility's older system average 64 years compared with 25 years in the newer system, while the average industry life expectancy is 25 years.

The Michigan Public Services Commission, which regulates private utilities in the state, has said it is clear DTE's service is worse in areas with older systems.

"Communities served by [the older system] are plagued by the highest trouble in the DTE electric system, yet the very system that causes the increased trouble is also the one that limits their ability to seek solutions," Joy Wang, a staff member with the commission, said during a recent regulatory hearing.

DTE told the Guardian it plans to convert all of its 4.8kV systems to 13.2kV, and noted that half of that work is planned for Detroit. But the work that has begun and is planned for the coming years is in greater downtown Detroit, which holds the city's highest concentration of wealthy and white residents. Improvements are also planned for areas where large industrial customers operate.

Some are also calling for the utility to take simple, cost-effective steps like implementing software that allows utilities to flag weak points in the grid system before they cause an outage.

Consumer advocates have called for regulators to order DTE's shareholders to take the financial hit to improve the grid. DTE is a "regulated monopoly", meaning customers in its service area have to buy power from it. But regulators can order the utility to make improvements, and set the return on equity for its Wall Street shareholders.

So far, the company and its shareholders largely have not faced financial consequences, Koeppel said.

"If there's no connection between performance and profits, then DTE is going to keep making profits without improving performance," he said.

For now, that financial burden falls on residents like Harris-Bady. She and her husband have purchased a generator to protect against outages. They’ve lost food, and a surge during the August storm destroyed their stove. When they lose heat in the winter, they have to stay in hotel rooms, and having the lights out in a high crime area creates a safety risk, Harris-Bady said. She estimates outages have cost them at least $10,000 in expenses.

They have received only a $25 credit from the utility for their trouble over the years.

"We’re not just complaining – we’re spending money to try to fix it on our own," said Shawn Bady, Marlene Harris-Bady's husband. "We’ve done preventive maintenance to make sure these things don't happen, but it's out of our control."