MPSC authorizes DTE Electric Company to increase its electric rates

January 31, 2017

Contact: Judy Palnau, 517-284-8300
Agency: Michigan Public Service Commission

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today authorized DTE Electric Company to increase its electric rates by $184,336,000 annually, effective Feb. 7. Because the amount the MPSC approved is less than what the utility self-implemented in August last year, customers will see a refund, plus interest, in the future.

“One of the primary reasons that customers experience power outages is the lack of maintenance and the age of electric distribution equipment such as substations, transformers and wires,” said Sally Talberg, chairman of the MPSC. “To help improve electric reliability for all energy users, the Commission’s order approves new investments by DTE Electric to upgrade its distribution infrastructure.

“To build on this commitment, the MPSC asks DTE Electric to develop a comprehensive, five-year system improvement investment plan to address aging infrastructure and ensure safe and reliable future operations. This planning effort will provide increased communication and coordinated planning for electric system conditions and upgrades. This program will complement Michigan’s efforts to rebuild its infrastructure across all industries.” 

DTE Electric Company, in Case No. U-18014, sought a rate increase of $344 million. It self-implemented a rate increase of $245 million on August 1, 2016.

The rate increase granted is 46 percent below what the utility requested.

Residential customers using 500 kilowatt-hours of electricity a month will see a decrease on their monthly bills beginning in February, compared to what they have been paying since August last year.

The total amount approved today represents an increase of 4 percent over the rates set in its previous electric rate case (Case No. U-17767) in December 2015.

A fact sheet follows:

 

 

 

DTE Electric Company

Case No. U-18014

Commission Order Fact Sheet

 

Revenue increase granted: $184,336,000

 

Rate of return on common equity: 10.1 percent

 

Capital structure: 50 percent equity and 50 percent long-term debt

 

Overall rate of return: 4.78 percent

 

Authorized a 10 percent increase for 2016 and a 12 percent increase for 2017 for capital distribution operations to improve electric reliability and to serve new load

 

Removed $18.1 million in contingency costs

 

Excluded $13.1 million in planning costs for new generation, given expected filing of Certificate of Need in 2017

 

Directed utility to attend quarterly meetings with MPSC staff beginning in June to investigate the potential for improving DTE Electric Company’s distribution

 

Removed $41.8 million for facilities relocation for the Gordie Howe International Bridge and $13.4 million for facilities relocation along Interstate I-75, until details for both projects and timelines are more fully developed

 

Reaffirmed the 4CP 75-0-25 production cost allocation method

 

Increased monthly residential customer charge from $6 to $7.50.

 

Directed the utility, in its next rate case, to provide details and a proposed timeline on all proposed capital projects

 

Directed the utility to submit a draft distribution investment and maintenance plan to the MPSC staff by July 1, and to subsequently meet with the MSPC staff to complete a final five-year distribution investment and maintenance plan by Dec. 31.

 

Directed utility to file an application for review of opt-out charges for advanced metering infrastructure (AMI) within six months of completion of its AMI installation

 

Additional MPSC actions today include:

 

 

U-17981: The MPSC directed the administrative law judge in this complaint filed by the Independent Power Producers Coalition of Michigan (IPPC) to set a schedule in this contested matter. The IPPC filed a complaint against Consumers Energy Company alleging violations of the Public Utility Regulatory Policies Act of 1978 (PURPA).

U-18145: The MPSC approved a settlement agreement authorizing Northern States Power Company to implement a 2017 power supply cost recovery (PSCR) factor of negative $0.00042 per kilowatt-hour (kWh), beginning with the next billing month.

U-18147: The MPSC approved a settlement agreement authorizing Upper Peninsula Power Company to implement a 2017 PSCR factor of negative $0.00399 per kWh, effective with the next billing month.

Case Nos. U-18014, U-17981, U-18145, and U-18147

For more information about the MPSC, please visit www.michigan.gov/mpsc or sign up for one of its listservs to keep up to date on MPSC matters.