August 26, 2009

LANSING - Attorney General Mike Cox today announced the end of a five-year rate hike battle with Detroit Edison that will result in a total savings of $2.5 billion for Detroit Edison customers because a 40-year, $62.5 million annual rate hike will not take place.

            "This is great news for Michigan consumers who are already struggling to pay for basic, everyday needs," said Cox.  

The case began in 2001 when Detroit Edison's parent company, DTE Energy Corporation (DTE), acquired MCN Corporation, the parent company of MichCon.  DTE paid MCN a premium of $893 million above the book value of MCN's stock.  Detroit Edison then went before the Michigan Public Service Commission (MPSC) seeking to recover $590 million of the $893 million premium, plus interest, from its customers, which over 40 years would cost consumers $2.5 billion. 

Cox opposed that rate hike and the MPSC agreed, denying the request in 2004.  However, in 2007 the Michigan Court of Appeals reversed that decision.  Cox, along with the Association of Businesses Advocating Tariff Equity (ABATE) and MPSC staff, appealed the case to the Michigan Supreme Court.  The Supreme Court sided with Cox earlier this year, seemingly ending the rate increase request.

However, Detroit Edison again requested the $2.5 billion recovery as part of another rate increase case filed with the MPSC on January 26, 2009.  Cox, ABATE, and MPSC staff again opposed this increase and asked an administrative law judge to strike the request from the current case, which was recently approved.  Detroit Edison has now agreed not to appeal that ruling, bringing an end to more than five years of litigation.

Cox continues to oppose the rest of the current Detroit Edison rate hike request, which would increase consumer costs by $378 million-per-year.  Hearings for that request (U-15768) are currently ongoing before the MPSC.

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