Approved return on equity: 9.87%
Requested return on equity: 10.5%
Approved revenue requirement increase: $19.9 million
Requested revenue requirement increase: $38.1 million
Here are a few things we think are important for you to know about this case if you are a SEMCO customer:
- SEMCO had requested a 14% increase in residential rates, but residential rates will instead increase 8% as the result of the settlement with Attorney General Dana Nessel, the MPSC staff, CUB of Michigan and the Retail Energy Supply Association.
- SEMCO had also proposed an increase in fixed charges, including increasing the monthly customer charge on each residential customer by $2.40 to $17.40. But per the terms of the settlement, the charge will instead go up by just $0.75. SEMCO described the proposed increase as an “alternative revenue decoupling mechanism” – meaning that, because energy waste reduction measures mean the utility may not get as much revenue from selling gas as they expect, SEMCO proposed getting more of its revenue from a fixed charge rather than revenue that is “coupled” to the amount of gas sold.
- SEMCO will implement a Low-Income Assistance Credit program in which the utility will provide a $30 credit to customers whose household income does not exceed 150% of the Federal Poverty Level. Enrollment is limited to 2,000 customers. SEMCO also agreed to implement a Residential Income Assistance program, in which up to 10,500 customers will receive a monthly credit equal to the customer charge.
- Previously, SEMCO had requested a Low-Income Assistance Credit program with enrollment limited to 3,200 participants, but with no accompanying Residential Income Assistance program.
- SEMCO’s 9.87% approved return on common equity is a decrease from the 10.35% approved in its last rate case (Case No. U-16169, decided by the Commission on Jan. 6, 2011).
- SEMCO agreed to not seek another general rate case before Jan. 1, 2023.