MPSC authorizes Consumers Energy to increase rates

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today authorized Consumers Energy Company to increase its electric rates by $113,277,000 annually, effective March 7. Because the amount the MPSC approved is less than what the utility self-implemented in September last year, customers will see a refund, plus interest, in the future.

Commission Chairman Sally Talberg said replacing infrastructure is a top priority of the Michigan Public Service Commission. She said the Commission order approved today allocates $40 million to deploy innovative technology that provides real-time information to optimize the operation of the electric system and has the potential to improve reliability and efficiency, while lowering future operating costs.

Consumers Energy Company, in Case No. U-17990, sought a rate increase of $225 million. It self-implemented a rate increase of $170 million on Sept. 1, 2016.

The rate increase granted is 49.7 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 March, compared to what they have been paying since September last year.

The total amount approved today represents an increase of 2.8 percent over the rates set in its previous electric rate case (Case No. U-17735) in November 2015.

A fact sheet follows:

Consumers Energy Company

Case No. U-17990

Commission Order Fact Sheet

 

  • Revenue increase granted: $113,277,000

  • Rate of return on common equity: 10.1 percent

  • Capital structure: 46.80/52.87 percent debt to equity

  • Overall rate of return: 5.94 percent

  • Approved $40 million for the deployment of innovative grid technology

  • Disallowed projected contingency costs totaling $32.943 million

  • Directed the utility to submit a five-year distribution investment and maintenance plan to the MPSC staff by Aug. 1. Subsequently, the company will meet with MPSC staff to discuss the framework for completing the final plan by Jan. 31, 2018.

  • Approved $48.5 million for tree trimming/vegetation management

  • Approved $24.7 million for uncollectibles

  • Denied the utility’s request to implement revenue adjustment and investment recovery mechanisms

  • Maintains the current $7 per month customer charge (residential system access charge)

  • Maintains the current senior citizen and residential income assistance rate monthly credits of $3.50 and $7, respectively.

  • Denied the utility’s request to increase the advanced metering infrastructure (AMI) op-out tariff, instead directing the utility to recalculate AMI opt-out charges in its next general rate case following full deployment of AMI meters, or in a contested case filed six months following full deployment, whichever is sooner.

  • Directed the utility to provide a detailed cost/benefit analysis on the retirement of the Karn and Campbell facilities in its next general rate case
     

The MPSC will host a technical conference inviting the various stakeholders, including utilities, auto manufacturers, third-party suppliers of charging equipment, transportation planners and others to discuss issues associated with the deployment of plug-in electric vehicle (PEV) charging.

Case No. U-17990

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.