(Source: MIRS.news, Published 12/01/2023) The Michigan Public Service Commission (MPSC) unanimously approved a $368 million rate increase for DTE to fund utility reliability upgrades, a figure 40% lower than the $622 million rate increase the company initially requested.
The rate increase will take effect Dec. 15 and result in a 6.38% monthly rate increase for customers who use 500 kilowatt-hours of electricity per month, equatable to $6.51.
DTE is said to need the increase to pay for infrastructure investments to increase reliability and deploy clean energy generation faster.
On the decision, House Minority Leader Matt Hall (R-Kalamazoo), House Minority Floor Leader Bryan Posthumus (R-Rockford) and Rep. Mark Tisdel (R-Rochester Hills) pointed to the rise in Michiganders’ electric bills as proof that “mandates come with expensive compliance costs."
“As the state ramps up new energy requirements, Michiganders’ electricity prices will keep ramping up, too,” Tisdel said. “We’re already seeing rates rise because of previous ‘clean energy’ regulations, and burdensome new laws will require costly investments and make electric bills more expensive for residents and local businesses.”
With clean energy legislation signed by Gov. Gretchen Whitmer this week, he said the price increases will keep coming.
Sarah Mullkoff, advisor to the MPSC, said the company also initially requested a permanent capital structure of 50% equity and 50% long-term debt, along with funding for tree trimming research funding in 2025 and several electric vehicle charging pilot programs.
Along with the rate increase, the MPSC approved the requested debt-to-capital ratio, and a two-year investment recovery mechanism (IRM) designed to help track investments in DTE’s electric distribution system and ensure continued investment.
The $350 million in investments in 2024 and 2025 will go towards circuit conversions, sub-transmission redesign and rebuild, breaker replacement, underground residential distribution replacements and a 4.8 kilovolt circuit automation.
“The commission emphasizes the importance of providing transparency to the selection and prioritization of certain distribution grid investments,” Mullkoff said.
The program is limited to two years and is expected to conclude late summer 2024.
Other requests that were approved include:
- An additional $2 million in funding for DTE’s pilot program providing $1,500 rebates for income eligible households which purchase electric vehicles under $50,000.
- $9 million for the utility’s planned 220-megawatt Trenton Channel Battery project.
- Funding for DTE’s strategic capital program to improve reliability and modernize the grid.
- Funding for DTE’s efforts to harden the city of Detroit’s 4.8 kV grid, in exchange for providing a detailed, longer-term plan for the work, with performance benchmarks and an analysis of equity impacts using a Department of Environment, Great Lakes and Energy interactive mapping tool.
- A request to accelerate DTE’s ongoing tree trimming surge in an attempt to address outages in Michigan, along with a study on tree trimming on residential service drops, or the electric lines between power poles and homes, which is normally maintained by homeowners, but can have an impact on the length of outages.
- The MPSC also ordered DTE to conduct a study examining the impact of on-peak rate structures on low-income customers before they transition to the new time-of-day rates, which were implemented in March 2023 and incur higher charges on weekdays between 3 and 7 p.m. June through September.
Costs that were not approved included $346 million in capital costs, $133 million in information technology costs and $59.6 million in avoidable capital expenses associated with the coal-fired Monroe Power Plant.
Attorney General Dana Nessel said when the case was filed, she noticed that it was the largest requested increase her office has ever seen, “and that my team would review it with a fine-tooth comb to make sure customer interests are protected.
“That is exactly what we did, and today’s Commission order validates the extensive work my office did in an attempt to limit any rate increase to reflect reasonable expenditures,” Nessel said. “While I am pleased the Commission limited the increase, I recognize that $368 million is still a tremendous rate increase and is too high for many ratepayers, especially right before the holidays.
She said she also advocated for strong metrics and benchmarks to hold DTE accountable for poor electric reliability, and was “disappointed” it was not adopted.
DTE’s last rate increase was granted in November 2022, a $30.5 million increase but a 90% reduction from the $388 million the utility had requested.
MPSC Chair Dan Scripps said the focus with this order was on improving grid reliability and decreasing the number and duration of outages.
“And that’s as it should be,” he said. “The Commission remains committed to supporting reasonable and prudent investments in basic grid infrastructure, so long as there is adequate support for these investments on the record.”
The Michigan Freedom Fund’s Mary Drabik said: “the utility companies took Democrats for a ride and Michiganders are paying the price.
“Power companies agreed to Democrats' wildly unrealistic green energy laws in exchange for the ability to continue to raise electricity rates without guarantee of improved service for customers, and the second it became the law of the land, the rate-raising began,” she said. “As utilities continue to work hand-in-hand with the Michigan Public Service Commission which fails to hold them accountable, Michigan residents can count on increased electric bills and continued blackouts."
