The MPSC rightfully cut Consumers Gas’s rate increase from $217 million as proposed by the utility to $157 million, but the cut should have been much bigger based on testimony CUB submitted in this case. As CUB detailed in a 2025 report, Michigan ratepayers cannot afford the expanding investments into the gas system that our utilities are planning over coming decades. We are still evaluating the MPSC’s order to see where it missed opportunities to keep the utility’s spending in check. But the MPSC did make a good move with this order by telling Consumers to revise its policies for expanding gas service to ensure that existing customers do not subsidize new customers.
While CUB is pleased the Commission reduced Consumers Gas’s return on equity from 9.9% to 9.8%, that is still a higher rate of profit than the 9.7% that is a more typical return on equity for gas utilities based on national averages. Return on equity is essentially the part of the ratepayer bill that goes toward profit for the utility’s shareholders. CUB presented compelling testimony in this rate case that Consumers Gas’s return on equity should be reduced to 9.24%, based on comparisons to investments of similar risk, and the utility provided no evidence to the contrary to show that the level of risk for Consumers Gas warranted the higher-than-average profit. A problem with this high return on equity is that it encourages the utility to keep building more gas infrastructure in order to collect a profit for shareholders, despite Michigan’s commitments to reduce greenhouse gas emissions and ultimately move away from gas in the long-term.