MPSC Authorizes Consumers Energy Company to Increase Its Electric Rates By $118.5 Million

Contact:  Judy Palnau, 517-241-3323
Agency:  Michigan Public Service Commission

June 7, 2012 - The Michigan Public Service Commission (MPSC) today authorized Consumers Energy Company to increase its electric rates by $118,475,000 annually, effective June 8.  That amount is 39 percent below what the utility requested.

As a result of today's order, a residential customer using 500 kilowatt-hours of electricity a month will see an increase of $4.28 on their monthly bill (over self-implemented rates).

Consumers Energy on June 10, 2012 filed an application requesting a $195 million rate increase and other relief. The utility on Dec. 8, 2011 self-implemented a rate increase of $118 million.  The final amount approved today ($118,475,000) is $475,000 above the self-implemented amount and represents an increase of 3.3 percent over the rates set in its previous electric rate case (Case No. U-16191).

A fact sheet with details follows: 

Consumers Energy Company

Case No. U-16794

Commission Order Fact Sheet

 

1.  Commission order date:  June 7, 2012

 

2.  Revenue increase granted:  $118,475,000, jurisdictional

 

3.  Rate of return on common equity:  10.3 percent

 

4.  Debt to equity ratio:  48.11 percent debt; 51.38 percent common equity

 

5.  Overall rate of return:  6.6973 percent

 

6.  Requests for the Uncollectible Expense True-Up Mechanism and Choice Incentive Mechanisms, known as trackers, were denied.

 

7.  Development and deployment of Phase 2 of the Advanced Metering Infrastructure program was authorized.

 

8.  The methodology for allocating production plant costs was changed from a system that uses peak demand for 12 months to one that uses peak demand for four summer months.

 

The MPSC is an agency within the Department of Licensing and Regulatory Affairs.

 

Case No. U-16794

 

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