Jake May/The Flint Journal via AP
Dana Nessel is taking “a step up from previous attorneys general” on energy-related issues, one observer says.
Michigan Attorney General Dana Nessel is on a mission to protect the Great Lakes from pollution and advocate on behalf of consumers against corporate interests. The energy sector provides her a venue to do both.
In her first nine months in office, Nessel has emerged as an outspoken supporter of residential utility customers, clean energy, climate change action and — perhaps most noticeably — shutting down the Line 5 pipeline in the Great Lakes.
As Nessel clashes with utilities and pipeline company Enbridge, though, critics say she is overstepping her authority and sending the wrong signals to the state’s business community through a politically driven agenda. She’s accused of being “reckless” on the Line 5 issue, and blustering when it comes to fighting with the state’s largest utilities over rate increases.
Nessel, a Democrat, follows 16 years of Republican control of the department. Her supporters say she is a relief, both politically and in policy substance, with her vocal support of ratepayers and clean energy.
“I think this office does have the ability to help frame some of those arguments and decisions down the road,” Nessel said of climate and clean energy advocacy during a recent extended interview with the Energy News Network. “I have a hard time thinking that I have this limited opportunity to be sitting in this seat and not have worked real hard to do something to prevent catastrophic impacts to our state in years to come.”
Private practice to public office
Nessel, 50, was elected in November 49% to 46% over former Republican House Speaker Tom Leonard. She replaces former Republican Attorney General Bill Schuette, who lost his campaign for governor last year to Gov. Gretchen Whitmer. Democrats took control of statewide offices in last year’s midterm, and made gains in the state Legislature and congressional delegation.
Nessel graduated from the University of Michigan and Wayne State University Law School in Detroit. She has spent her career in southeastern Michigan, and was an assistant prosecuting attorney in Wayne County after graduating law school in 1994. From 2005 to 2018, Nessel was in private practice as a criminal defense attorney. Among her most high-profile cases was the successful challenge of Michigan’s ban on same-sex marriage.
Nessel was managing partner at the Nessel & Kessel Law firm when she started campaigning for attorney general.
Nessel campaigned on protecting the Great Lakes and particularly the Line 5 issue, vowing prior to taking office to file an injunction to close the pipeline. She has also said Line 5 was the issue that drove her to run for attorney general.
Nessel has also pushed for a strong consumer protection division, which has helped shape the department’s priorities since she took office, “whether it be through unfair utility rate increases or unscrupulous business practices,” according to her office’s website. Nessel said her time in private practice exposed her to the impacts of high energy prices on low-income populations.
Ratepayer, clean energy advocacy
On residential ratepayer advocacy, Nessel is “definitely a step up from previous attorneys general, perhaps going back to Frank Kelley,” said Robert Nelson, president of the Citizens Utility Board of Michigan who served as an independent on the Michigan Public Service Commission from 2001 to 2005. The Citizens Utility Board formed a Michigan chapter last year and focuses on residential ratepayer advocacy.
Nessel said “part of the legend” of former Attorney General Frank Kelley — the affectionately known “eternal general” who served 37 years in office before term limits, the longest of any in the U.S. — was creating the nation’s first consumer protection division that other states followed.
“Particularly when it comes to utilities, these are monopolies,” Nessel said. “That’s why it’s particularly important the attorney general be very strong: That’s our job to protect ratepayers in these cases.”
Nessel says prioritizing utility issues is a shift for the department, even though previous attorneys general have represented ratepayers in cases before the Public Service Commission. She said Michigan “definitely saw a movement away” from robust residential ratepayer advocacy from the previous two officeholders, Republicans Mike Cox and Bill Schuette.
“She’s full of s—,” Cox responded in an interview. “I met every week with our Special Litigation Division.”
Nessel spokesperson Kelly Rossman-McKinney responded: “Mike Cox certainly does have a way with words, doesn’t he? Unfortunately, Cox eliminated the department’s Special Litigation Division. In its absence, ratepayer issues were handled by several different divisions before being consolidated back under the recreated Special Litigation Division. … Perhaps knowing that Cox eliminated the Special Litigation Division would be sufficient information as to his priorities while in office.”
Nessel has also advocated clean energy and climate change action since taking office. She, along with environmental groups, backed an agreement over Consumers Energy’s long-term plan that calls for 6,000 megawatts of new solar power and no new fossil fuel plants. She has also joined lawsuits with other states opposing the Trump administration’s attempts to roll back fuel economy standards and the Clean Power Plan.
Making an impact
Nessel’s office released the energy-related case load from January 2019 to August as well as January 2018 to August 2018 under Schuette. Under Nessel, the office has handled 121 open, closed and pending cases. Under Schuette in that time, the office handled 86. A Nessel spokesperson said the “vast majority” of these cases involve energy, such as intervening in utility rate cases and long-term energy plans, while a few involve 911 issues.
Rossman-McKinney said eliminating the Special Litigation Division made it difficult to make a “comparison count” of cases handled by the office that involve energy regulation.
Michael Moody, who leads the Special Litigation Division and has worked in the Department of Attorney General for eight years, said Nessel is bringing a stronger ratepayer focus to the office based on case load and public statements. One former department staffer under a previous attorney general said each officeholder picks issues to make priorities — and energy appears to be one of Nessel’s.
Attempts to reach Schuette were unsuccessful. Former Michigan Attorney General and former Gov. Jennifer Granholm could not comment for this story, a spokesperson said.
Nessel’s tenure also comes after sweeping energy reforms passed by the Legislature in late 2016, which Moody and others say have increased the case load before the Public Service Commission. The reforms led to a host of new dockets and formal planning groups on issues like renewable energy, efficiency and grid infrastructure, to name a few. The 2016 laws also doubled the funding available to the attorney general’s office to intervene in commission cases, and expanded the type of cases they could join.
“There’s definitely been an increase in focus from the standpoint of publicity around [ratepayer advocacy] issues,” said commission chairperson Sally Talberg, who was appointed by former Gov. Rick Snyder.
Talberg said while the overall number of cases before the commission has increased in the past few years, “I’d also say Attorney General Nessel has made this a priority and has been very vocal about it. That’s part of the difference — the prioritization at that level to raise the issue was not necessarily there.”
Nessel is ‘no different,’ Cox says
Cox was elected as attorney general in 2002 and served two 4-year terms. He says the attorney general’s role is about balancing ratepayer interests with utilities’ need to maintain capacity and “ensure there’s sufficient capital” for them to do so. He said it’s important for attorneys general to advocate for residential ratepayers, and that Nessel is “no different” than her predecessors on this point.
Cox also said Michigan’s nature as a peninsula means it can’t take advantage of transmission like other “through states.”
“She can rattle her saber and talk all this bulls— about helping people, but we’re a peninsula and energy always costs more,” Cox said.
As he and Nessel both note, a key aspect of the department’s involvement in utility cases surrounds rates residential customers pay compared to commercial and industrial customers. In recent years, Michigan’s residential rates have increased while industrial rates have remained flat or decreased in order to reflect the true “cost of service” and prevent large ratepayers from subsidizing smaller ones.
While Cox said this is necessary to promote fairness, advocates say rates have shifted too far. In 2015, a rate design proposal by the state’s two largest utilities would have continued the shift. At the time, Schuette sided with residential ratepayers, calling the proposal — backed by large industrial users — “extreme and unsubstantiated.”
Nelson added: “The residential ratepayer has been getting the short end of the stick for a long time. Industrial customers are well funded. Residential customers, for the most part, are not.”
But another aspect, as Cox and others have noted, is that low industrial energy rates keep the state competitive in attracting new business. That’s not a theory Nessel endorses.
“I think that’s entirely unfair to residential ratepayers and to people who can least afford those rates,” she said.
In July, Nessel issued a public statement opposing DTE Energy’s proposed $328 million rate increase, noting the utility had been denied a major increase in the previous rate case and that she was putting DTE “on notice” that the company should act in customers’ interest, not shareholders.
A major component of DTE’s and Consumers Energy’s planned investments in the coming years are to replace outdated electric and gas infrastructure. Aren’t those investments needed?
“DTE seems to think they’re needed,” Nessel said. “One big concern we had was they were continually provided these rate increases but their service didn’t seem to get any better. That’s a lot to ask of customers — that they continue to pay massive rate increases but not obtain better service. It’s remarkably poor service recently, in my opinion.”
Line 5 takes spotlight
Since taking office, Nessel has focused on a variety of issues — sexual abuse by Catholic Church clergy, opioids, the Flint water crisis, and elder abuse, to name a few.
Among those top priorities is the Line 5 pipeline. Nessel has previously said Line 5 is one of the main reasons she ran for attorney general. In June, Nessel took legal action against the pipeline owner, Enbridge, claiming that an agreement the company reached under the administration of former Gov. Rick Snyder was unconstitutional. Nessel is also looking to shut down Line 5 in the Straits of Mackinac, alleging — in part — that the pipeline violates the public trust doctrine.
Line 5 is among the more politically contentious issues Nessel is involved in. She’s drawn criticism from Republican lawmakers, and even some within her own party, as well as the building trades and business community.
Rich Studley, CEO of the Michigan Chamber of Commerce, said he believes Nessel is overstepping her boundaries on energy policy, which he said is set by the Legislature, the governor’s office and the courts.
“The attorney general has acted — both as a candidate for office and since taking office — as though she believes she is all three branches of state government rolled into one,” Studley said. He called shutting down Line 5 a “reckless campaign promise” and “irresponsible.”
The agreement to build a tunnel for Line 5, which was approved by the Legislature, was hastily signed at the end of Snyder’s administration in 2018. The Whitmer administration tried to negotiate a deal that included a set timetable for shutting down Line 5 in the Straits that would allow for the tunnel. The deal stalled, and Nessel filed suit in June.
“Dana Nessel didn’t just say ‘no,’ she said ‘hell no.’” Studley said. “The attorney general seems determined to misuse the authority of her office and tax dollars to carry out a radical anti-homeowner, anti-business, anti-jobs, anti-worker energy agenda.
“Crafting good energy policy in Michigan is difficult and time consuming, requiring negotiation and compromise. The attorney general’s office is not a dictatorship, and it’s not a monarchy.”
Studley added: “What we’re seeing is not only a difference in priorities but an extraordinary effort to radically expand the scope of the attorney general’s office in a way that would damage the legislative process.”
Nessel says her opponents mischaracterize her efforts, and that an orderly — rather than abrupt — closure of Line 5 in the Straits would minimally impact propane and gasoline prices. Nessel pushes the issue even further, claiming Enbridge is stalling to keep Line 5 open as long as possible and questioning whether the company even wants to build a tunnel at all.
“They don’t have a Plan B” if the tunnel isn’t built, Nessel said. “My theory all along has been that this tunnel — more than anything — is just an effort to keep Line 5 in its current form as long as possible.”
Enbridge spokesperson Ryan Duffy responded that the tunnel could be under construction by 2021 and in service by 2024.
“We know most Michigan residents recognize the tunnel as the best solution for Michigan and we are committed to build it,” he said. “Our focus is on the work currently going on in the Straits of Mackinac. We are moving forward with our rock and soil sampling, which is part of our $40 million investment in 2019 pre-construction work.”
Critics say this short timetable is misleading since the plan would likely be challenged in court — if not by Nessel than by other advocates or tribes.
Jim Olson, a longtime environmental attorney and founder of the advocacy group For Love of Water, said the case against the tunnel deal and for getting Line 5 out of the Straits of Mackinac is simply about the “rule of law.” Enbridge is free to go through a state environmental regulatory process to try and build the tunnel, which hasn’t happened, advocates say.
Nessel credited Olson and other advocates for raising the public trust legal argument around Line 5, a theory that essentially says private companies can’t use public resources — in this case, the Great Lakes — for private benefit.
Olson said he was “not surprised but immensely thankful” that Nessel is including the public trust argument in her case.
“Because of the Straits of Mackinac, the public trust waters and bottomlands and soil beneath the lake have a unique and much higher level and standard of protection,” Olson said. “The state has an interest in preventing impairment and to keep catastrophic risk from occurring from that. This isn’t far out, and it isn’t extreme. It is fundamental law and has been the law of the Great Lakes for about 125 years.”
Nessel said the threat of a pipeline spill in the Great Lakes simply isn’t worth the services it provides.
“For the small percentage of energy that actually runs through Line 5 and goes to the state of Michigan, or goes to anyone in the United States of America, it has not to me seemed worth the very large risk that we’re taking,” Nessel said. “There are so many different ways to make up for the loss of energy. We’ll never make up for the loss of the Great Lakes. That’s not a risk I’m willing to take on behalf of the residents of the state I represent.”
Olson noted this is a significant shift: “We have a new attorney general and I think governor who are stepping up to do what should have been done five years ago and finally acting as a leader of the state of Michigan. That’s the marked and major difference from the previous administration when it comes to Line 5 and the Great Lakes. There’s criticism of [Nessel] from the right, and lots of support on the left. But you know what? The reality is this is not about politics. This is about the Constitution of Michigan and the rule of law.”