In its newest rate case, filed earlier this month, DTE, the largest electricity provider in Michigan, proposes a 13.9% residential rate increase. That rate hike is among the biggest proposed by a Michigan utility in the past several years, but it also represents a slap in the face to DTE customers, as well as the Michigan Public Service Commission (MPSC).
That’s because it comes right after DTE got a stunning rebuke from regulators in the form of the MPSC’s November rate case order, which rejected about 90% of the rate hike requested by the utility. The MPSC issued that order because DTE failed to justify their plans to spend ratepayer dollars. As MPSC Commissioner Katherine Peretick said at the time, “there needs to be enough evidence on the record to be able to be confident that customer money is being spent in a reasonable and prudent manner.”
“The Michigan PSC agreed with CUB, AG Dana Nessel and others that, in many instances, DTE failed to do its homework and prove that its spending requests were in the best interests of ratepayers,” we said in a public statement at the time of the rate case decision.
Now we see that DTE not only did not learn its lesson, but is doubling down on the same plans it had before. In this new rate case, DTE is asking to increase rates on all customers (not just residential, but also commercial and industrial) by $619 million. That is much higher than the company’s rate increase request for $388 million in the recently-concluded rate case (the MPSC ended up granting the company only $30.56 million).
So essentially, DTE is trying to redo the rate case that just concluded, but with the addition of even more spending they want charged to customers. In its application, DTE Electric justifies the spending increase by saying it is needed to implement “a major capital investment program to improve reliability and resilience” and that the “Company’s existing rates and projected electricity sales cannot sustain this level of infrastructure investment without a rate increase.” But as CUB and other groups have shown through testimony in the last rate case, the problem is not that DTE wants to invest to improve the grid; it is that DTE’s plans are not the most cost-effective use of ratepayer dollars. Its investment priorities consistently are aimed more at enriching DTE shareholders by investing more capital that generates a return for the utility, rather than spending smarter to get the same (or better) improvements in grid reliability, while saving money for ratepayers.
What makes it possible for DTE to already be filing another rate case is a Michigan statute that allows a utility to file for a rate case after just 12 months have passed since the last rate case. The legislature should seriously consider whether the revolving door of rate increase requests allowed by this statute is in the public interest.
The new rate case (U-21297) will be a months-long process of regulatory review, so we are at just the beginning. DTE customers can submit comments on this proposal by going to the case docket here and clicking the “Submit Comment” button. Stay tuned for more information about how to participate in this case.