How a big storm caused big trouble for Consumers Energy
It began with an August storm. In the summer heat, a line of intense squalls moved east across the southern half of Michigan’s Lower Peninsula, causing widespread electrical outages. Powerful storms were increasingly testing electrical grids across the US. Despite Consumers Energy personnel working night and day to restore power, almost half a million people and businesses remained without electricity and some schools were closed for a week.
Concerned by the delays in restoring power, the Michigan Public Service Commission (MPSC) announced a management audit of the utility’s electric operations in the state.
Finding an experienced guide for a complex process
Facing an unprecedented audit, Consumers Energy was committed to demonstrating its dedication to providing reliable energy to its customers. The utility viewed this as an opportunity to not only defend its robust operational practices but also to learn and improve where appropriate, ensuring preparedness for future severe weather events.
Consumers Energy recognized it needed a trusted adviser to guide it through the process. A firm with deep regulatory and industry knowledge, audit experience, and the technology to help the company prepare and respond with agility, transparency, and accuracy. The utility chose KPMG, which had served as its adviser for more than 14 years.
KPMG specialists Arun Mani and Dan Elmblad assembled the right team and crafted a wide-ranging strategy to help Consumers Energy address audit challenges, prepare coordinated responses, and respond to audit requests and recommendations.
Thorough preparation leads to consistency and confidence
For four months, the KPMG team worked with Consumers Energy professionals to help prepare for the audit. The team’s background provided deep insights into auditors’ expectations and potential areas of focus. Along the way, KPMG helped Consumers Energy to:
- Assemble data, records, and information that could be provided as background information to the third-party auditor and MPSC staff
- Research and analyze specific topics that might arise during the audit, such as vegetation management and asset inspection practices
- Benchmark Consumers Energy’s asset management and operations investments and practices with its peers to identify potential gaps.
Reaching out to other utilities to benchmark performance
Due to its extensive industry experience, KPMG was able to predict critical areas of focus for the audit. As Arun Mani stated, “We recognized that the MPSC staff and auditors might be probing the company’s reliability, performance, and spend relative to others.”
With this knowledge, KPMG proposed benchmarking key audit-related areas. “We brought together regional and national utilities to address common issues and compare performance across key topics such as vegetation management, inspections and maintenance, incident response, and system restoration and system hardening, along with grid modernization investments,” says Dan Elmblad. “By proactively gathering and preparing comparative insights, Consumers Energy was able to anticipate and prepare for auditor’s questions even before they were asked.”
