December 22, 2005

The Michigan Public Service Commission (MPSC) today limited the amount The Detroit Edison Company is authorized to implement as temporary quarterly power supply cost recovery (PSCR) factors for 2006.  PSCR costs reflect the rising cost of electric generation fuel (coal, natural gas and uranium) and purchased power.

Recognizing that ratepayers face high energy costs this winter, the Commission approved temporary factors that vary each quarter during 2006, as follows:  0.38 mills per kilowatt-hour (kWh) for January through March, 7.0 mills per kWh for April through June, 7.98 mills per kWh for July through September, and 2.15 mills per kWh for October through December.  The current PSCR factor is 0.48 mills. To limit the impact of the increase on customers, the MPSC approved factors are 4.61 mills below what the company requested for the first quarter.  This will delay the majority of the rate effect until the summer, when customers will not be paying large heating bills.

If the MPSC had not acted, the utility would have self implemented 2006 factors 10 times higher than what was authorized today.

As a result of last year’s Detroit Edison rate case and today’s PSCR order, the typical residential customer will see a rate increase of $3.83 per month in January.  The rate increases are 66 percent below what the utility requested.

“During the first quarter of 2006, when customers are already facing substantially higher natural gas bills, increasing electric bills to residential customers by almost half a cent per kilowatt-hour, as requested by the utility, is unacceptable,” said MPSC Chairman J. Peter Lark.  “A modest decrease in the PSCR factor during the winter heating season will be appreciated by all customers.  The summer increase will come at a time when customers are better able to pay a little more because they will not be using as much gas.”

The MPSC is an agency within the Department of Labor & Economic Growth.

Case No. U-14702