On Thursday, February 19, 2026, the Michigan Public Service Commission (MPSC) issued its final decision on DTE Electric’s request to raise electric rates in case U-21860. The Commission approved a revenue increase of about $242 million per year. The new rates go into effect March 5, 2026. The Citizens Utility Board of Michigan (CUB) intervened in the case to advocate for residential ratepayer interests.
Because of this ruling, DTE’s residential rates will rise by more than 4% in March, about 50% higher than the 2.7% rate of inflation that has accrued since its last rate case. CUB urges the Commission going forward to hold DTE and other regulated utilities to increases less than inflation, emphasizing that they should always offset increases in costs with gains in productivity. The Commission must hold DTE accountable by rejecting excessive annual rate hikes. DTE’s residential customers, already saddled with among the highest rates and worst outage performance in the country, deserve no less.
Key Components of the Commission’s Decision
1. Rate increases
- Residential customers will see an average increase of about 4%. While this is only about half of the increase DTE had proposed, it is still much higher than the rate of inflation.
- Business customers will see smaller increases.
2. Profit level (Return on Equity)
- DTE asked for a high shareholder profit level of 10.75% return on equity.
- The Commission maintained the current rate of 90%. While CUB recommended reducing ROE to 8.9%, the Commission’s decision to maintain the status quo will save customers tens of millions of dollars per year compared to the excessively high rate DTE requested.
- CUB continues to argue that a regulated monopoly utility does not face the same level of market risks as companies competing for market share and therefore does not merit earning the same risk premium on its invested capital.
3. Capital spending and grid investments
- The Commission agreed that Michigan needs a more reliable grid, stronger storm response, and preparation for electric vehicles and new technology.
- However, it found that DTE’s plan included too many projects that were not ready, not well supported, or unlikely to be completed during the rate period.
- As a result, the Commission approved many investments, but cut or delayed funding for projects that were speculative, poorly documented, or ahead of schedule. DTE can ask to recover these costs later—but only after the money is actually spent and clearly justified.
4. Inflation and cost assumptions
- The Commission found that DTE used aggressive inflation forecasts to raise its cost estimates.
- It rejected those assumptions and instead adopted more conservative inflation numbers recommended by Commission staff and consumer advocates. This decision reduced how much DTE could charge customers for operating and capital costs.
- CUB argued that inflation adjustments should be offset by productivity improvements, which would reduce the net cost adjustment significantly. Despite agreeing that DTE failed to demonstrate that it is becoming more cost-effective and productive, the Commission did not adopt CUB’s proposed productivity offset, citing methodological concerns.
5. Infrastructure Recovery Mechanism (IRM)
- DTE asked for broad, multi‑year authority to recover infrastructure costs through an automatic adjustment mechanism.
- CUB opposed extending the IRM beyond 2026 because it shifts financial risks from DTE to its customers, weakening cost discipline by nearly eliminating the risk of cost disallowance.
- The Commission allowed continued use of the IRM but limited its duration to run through 2027, and added stronger oversight and refund protections to ensure customers only pay for work that is actually completed.
6. Reliability and Tree Trimming
- The Commission ordered DTE to maintain a five-year tree-trimming cycle, despite the utilities request for a longer cycle that would have resulted in less efficient protection of power distribution assets. CUB has long advocated for an emphasis on efficient tree trimming as a low-cost strategy to ensure grid reliability.
- The Commission authorized up to $20 million for DTE to catch up to this cycle where it is behind. DTE will track what it uses of the $20 million allowance and can add it to the company’s next rate case, pending Commission approval that DTE’s use was reasonable and prudent.
- The Commission approved continued funding for DTE’s accelerated pole inspection and maintenance program but required better tracking of spending, and more discipline in deciding which equipment truly needs replacement.
- CUB’s advocacy in these areas helped ensure safety and reliability improvements without unnecessary upgrades that drive up costs.
7. Customer Protection
- DTE must improve tracking and reporting of shutoffs, arrearages, and reconnections. CUB recommended, and the Commission ordered, that DTE investigate a recent sharp surge in disconnections for non-payment and propose remedies in its next rate filing. This surge in disconnections was also discussed in a recent report from CUB on energy insecurity in Michigan’s low-income communities.
- Responding to CUB testimony, the Commission also ordered DTE to demonstrate whether its cash-only payment requirements reduce arrearages and costs, and to provide financial assistance information to any customer who is under the cash-only policy.
8. Electric Vehicles and Utility Make-Ready Infrastructure Program
- The Commission approved near-term spending for DTE’s EV infrastructure program but ordered the utility to track costs going forward, heeding CUB’s caution against approving large increases without strong justification and clear projections.
How CUB Influenced the Decision
CUB persuasively argued that affordability for residential customers must be central to the Commission’s decision.
The Commission repeatedly adopted positions that align with CUB’s advocacy, including cutting the overall rate increase by more than half, rejecting DTE’s inflation methodology, maintaining recent reliability improvements with shorter tree-trimming cycles, trimming or deferring capital projects that were not ready, and emphasizing accountability, transparency, and customer protection.
While the Commission did not adopt every CUB proposal exactly as filed, CUB’s arguments strongly reinforced the Commission’s skepticism of DTE’s large requests and helped shape a more cautious, customer-focused outcome.
Bottom line
The Commission’s message was clear: DTE can and must invest in the grid—but customers are not a blank check. CUB’s advocacy helped to control bill increases, rein in overly optimistic projections, and put customer affordability and accountability front and center.
Going forward, the Commission should recognize that just and reasonable rates should protect ratepayers—not only DTE’s shareholders—and refuse to allow rate increases that worsen Michigan’s already unsustainable household energy burden.