MPSC approves Consumers Energy gas rate increase

July 31, 2017

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today approved a gas rate increase for Consumers Energy Co. (Consumers) totaling $29,211,000.

The increase will allow the utility to further upgrade and modernize its natural gas distribution system by replacing older pipe and equipment. The added expenditures are justified to improve natural gas pipeline safety and reliability, the Commission said.

The rate increase is nearly 68 percent less than the original $90,483,000 increase Consumers had sought (Case No. U-18124). The utility subsequently reduced its request to $79,976,000.

The approval means a residential customer using 10 Mcf of natural gas per month will pay an additional $1.66 a month. However, those customers had already been paying part of the increase -- 72 cents a month -- after Consumers was legally allowed to self-implement $20 million of the rate increase beginning Jan. 20, while it awaited the Commission ruling.

The rate increase goes into effect Aug. 7. The amount approved today represents an increase of 3.2 percent over rates set in Consumers’ previous rate case.

As part of the case, Consumers will invest $29,559,670 through 2019 on its pipeline integrity program.

It also will spend $13.3 million on its advanced metering infrastructure (AMI) program and expects to complete installation of the new devices by the end of 2017.

Consumers will also continue to fund the residential income assistance (RIA) program and the Low Income Assistance Credit (LIAC) pilot program. Under RIA, 83 percent of program participants will get a credit of $11.75 while 17 percent will get a $30.27 credit. Participation in both programs will be capped at a total of 69,000 customers.

Consumers Energy Co.

Case No. 18124

Commission Order Fact Sheet

 

  • Rate base: $4,304,494,000

  • Rate of return: 5.97 percent

  • Income Required: $256,795,000

  • Adjusted net operating income: $238,958,000

  • Equity-to-debt ratio: 53.1 percent to 46.9 percent

  • Rate of return on common equity: 10.1 percent

The Commission said the rate of return and the rate of return on common equity provide appropriate compensation for risk, ensure financial soundness of the business, and maintains a strong ability to attract capital.

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.

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