The Michigan Public Service Commission (MPSC) today issued an order authorizing Consumers Energy Company to collect its combined 2002 and 2003 stranded costs of $63,214,364. The amount will be collected through use of a stranded cost recovery charge of 1.2 mills per kilowatt hour starting with the company's next billing month and running until fully collected. The 1.2 mills charge will be paid only by those customers buying power from competitive electric suppliers.

A company has stranded costs only when, during the transition from a regulated environment to a competitive one, the utility is unable to recover its generation costs.

"Today's MPSC order recognizes that Consumers Energy has incurred costs due to electric choice that Michigan law permits the utility to recover," noted MPSC Chair J. Peter Lark. "While today's order includes a modest surcharge on electric choice customers, it allows Michigan's fledgling competitive market to continue to grow."

Consumers Energy filed an application for determination and approval of its 2002 net stranded costs on March 4, 2003. The utility subsequently filed an application for determination of its 2003 stranded costs. In the interest of efficiency, the MPSC combined both cases in today's order.

The Commission determined the company's 2002 stranded costs, including interest, to be $12,310,844. Using the same methodology, the Commission calculated the utility's 2003 stranded costs, including interest, to be $50,903,520.

The total amount approved in today's order is $63,214,364. There were 1,387 customers purchasing power from competitive suppliers in Consumers' territory at the end of the third quarter.

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

Cases Nos. U-13720, U-14098

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