Approved return on equity: 9.9%
Approved overall rate of return: 5.46%
Approved revenue requirement increase: $188.285 million
Requested return on equity: 10.5%
Requested overall rate of return: 5.73%
Requested revenue requirement: $351 million
Latest News
The MPSC approved DTE’s rate increase on May 8, 2020, but with major revisions of DTE’s original request:
- The revenue to be collected from customers was cut from $351 million to $188.3 million.
- DTE must perform a new cost-benefit analysis of the date to retire the Belle River coal-fired plant.
- The MPSC required DTE to draft a proposal for new regulations that would tie at least some of the utility’s financial return to performance metrics.
On March 5, an administrative law judge argued the commission should modify the rate case from DTE’s original request in several ways, including:
- reduce the return on equity to 9.8%.
- require DTE to perform a new analysis of the costs of retiring the Belle River coal-fired power plant.
- do not charge ratepayers for costs from running River Rouge unit 3 (a coal-fired unit) after May 2020 because DTE has not provided justification for extending the plant’s retirement.
- reject DTE’s proposed pilot for fixed billing. This pilot would allow “up to 5,000 residential customers to pay a prespecified fixed monthly amount for a period of one year that is not subject to any adjustments for actual usage or price,” according to DTE. But the administrative law judge concluded that this pilot would likely hurt energy conservation goals in Michigan because it would encourage consumers on fixed billing to waste more energy.
- also reject DTE’s proposed pilot for a “low-income renewable energy program.” This program would be an expansion of the utility’s existing MIGreenPower program (in which customers can pay an additional amount on their bills to “subscribe” to a certain amount of energy produced by DTE renewable power facilities). But this new program would be marketed specifically to low-income customers. The administrative law judge found that the program should be rejected because, among other reasons, it does not help low-income customers lower their electric bills.
Elements of the rate case that the judge agreed should be unchanged include DTE’s pilot for time-of-use rates for residential customers.
Here are a few things we think are important for you to know about this case if you are a DTE customer:
- DTE is requesting a 9.1% increase in rates for most residential customers, a 7.3% increase in rates for most commercial customers and a 2.9% increase in rates for most industrial customers.
- According to DTE’s application, “A TYPICAL RESIDENTIAL CUSTOMER’S AVERAGE ELECTRIC BILL MAY BE INCREASED BY UP TO $9.84 PER MONTH, IF THE MICHIGAN PUBLIC SERVICE COMMISSION APPROVES THE REQUEST.” Michigan ratepayers already pay the highest rates in the Midwest before this rate increase.
Since DTE and other Michigan utilities have higher costs of electricity, lower reliability and higher emissions rates than their peers across the country, DTE should not be piling more costs onto residential customers. Customers should not be paying higher rates than their fellow Americans for worse service.
- Over the past decade, Michigan’s industrial energy customer rates have remained about the same, but residential rates have been increasing rapidly. This rate case would continue the trend of putting on unfair burden on residential ratepayers.
- In 2017, DTE’s customers experienced more minutes of interruption in their service than the customers of any other Michigan electric utility. Its customers experienced about an average number of interruptions, but they experienced a much longer average time to restore their power.
- Overall, Michigan’s 2017 performance on emissions rates was somewhat worse than in most states, with high sulfur oxide emissions standing out (7th highest in the country).