AG Nessel Reverses Rate Increase Trend for Michigan Utility Customers

Contact: Kelly Rossman-McKinney 517-335-7666
Agency: Attorney General

May 23, 2019

LANSING – Michigan utility ratepayers will save more than $11 million in total thanks to settlement agreements reached by Michigan Attorney General Dana Nessel with Upper Peninsula Power Company (UPPCO) and two other Michigan utilities. The settlements were approved today by the Michigan Public Service Commission (MPSC).  

“In this never ceasing rate increase climate for essential goods and services, I am happy to be able to reverse this trend for Upper Peninsula Power Company, Michigan Gas Utilities Corporation and Upper Michigan Energy Resources Corporation electric and natural gas customers,” said Nessel.  “This is much needed relief – especially UPPCO electric residential customers, who have been facing some of the highest electric rates in the state.”

The Upper Peninsula Power Company filed a rate increase application with the MPSC in September 2018 seeking to increase its rates by nearly $10 million, impacting more than 54,000 customers across the Upper Peninsula. In addition to UPPCO’s request to increase rates, the company also sought increases in the monthly service charge for residential customers by $10 a month, small commercial customers by $33 month, and medium-size commercial customers by $25 a month.

Attorney General Nessel intervened in the case in February, arguing that the rate increase and monthly service charges were exorbitant – especially considering the already high electric rates being paid by UPPCO customers.

Upon further investigation and litigation, and working the Michigan Public Service Commission staff and Citizens Against Rate Excess (CARE), Nessel signed a settlement reducing the $10 million request to $1.8 million, eliminating the monthly service charge increases for all customers and decreasing residential customers’ base rates by 4.5 percent. This needed rate decrease comes at the same time a current refund from a separate case ends.

In separate orders, the MPSC also approved settlements with Michigan Gas Utilities Corporation (MGUC) and Upper Michigan Energy Resources Corporation (UMERC). In both cases, AG Nessel intervened and was able to increase refunds to both natural gas and electric customers of these two companies.  In MGUC’s case, Nessel was able to increase the refund to customers by $3 million; the refund in UMERC’s case was increased by $50,000.

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UPPCO provides electricity to 54,000 retail customers, including cities, villages, and townships located in the counties of Alger, Baraga, Delta, Houghton, Iron, Keweenaw, Marquette, Menominee, Ontonagon, and Schoolcraft.

MGUC serves approximately 167,000 customers in the Southern and Western portions of Michigan’s Lower Peninsula.

UMERC serves approximately 41,000 customers in the Upper Peninsula, including Alger, Baraga, Delta, Dickinson, Gogebic, Houghton, Iron, Marquette, Menominee, and Ontonagon Counties.