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AG Nessel Argues to Eliminate Over 96% of Consumers Energy’s $136 million Rate Hike; Advocates Gas Rate Reduction

LANSING – Today, Michigan Attorney General Dana Nessel filed testimony (PDF) before the Michigan Public Service Commission (MPSC) arguing that Consumers Energy Company’s requested natural gas rate increase should instead be a rate reduction.

“My staff and expert witness worked tirelessly reviewing this rate increase request from Consumers Energy,” said Nessel.  “For our efforts, we are able to present direct evidence to the Commission to refute the need for any rate hike for Consumers Energy at this time and argue Consumers’ customers should instead see a rate decrease.”

If granted by the Commission, Consumers Energy’s $136 million rate increase request equates to a 5.7% increase for residential customers and an 8.1% increase for small commercial customers.  In addition, Consumers Energy is seeking a 37% increase in the residential monthly charge and an 18% increase in the small commercial monthly charge.  Moreover, Consumers Energy is seeking to increase the profit percentage it makes on capital expenditures (investments into its own infrastructure and generation capacity). Coupled with a request for more than $3 billion in those capital expenditures, Consumers seeks to further increase financial gains for its shareholders at the direct expense of its customers.

The Attorney General’s testimony demonstrates that Consumers Energy has at most a $5.3 million need (compared to the $136 million requested) for a rate increase in the coming year before a credit is applied to customers from the Company’s sale of its Appliance Service Program.  Consumers Energy is proposing to credit only 50% of the net proceeds from the sale of the program toward customers over the next five years, despite the program profits previously being 100% credited toward customers, as the customers paid to build the program.  Now, Consumers proposes retaining the other 50% of the net proceeds from the sale for the exclusive benefit of its corporate shareholders, thereby converting the ratepayer-built program to the immediate financial benefit of investors. The Attorney General is arguing for a 100% return of the proceeds to customers. Assuming only $14 million is returned, customers would receive a rate decrease of nearly $9 million, but if the Attorney General’s testimony is adopted, customers could see an even larger rate decrease and savings on their gas bills.

“For years we have fought against DTE and Consumer’s rate hikes, coming one right after the last and asking for more and more every time,” Nessel continued. “While Consumers Energy is once again begging the commission to let them squeeze their customers for even more on their gas bill, our experts can show that the customers are actually due a rate decrease.”

Consumers Energy announced this rate hike request little more than just 1 month after the MPSC granted approval of their previous natural gas rate hike.

Since taking office, the Attorney General has helped saved Michigan consumers over 3 billion by intervening in utility cases before the MPSC.  Today’s testimony filed at the Commission reaffirms her commitment to affordable energy for consumers.

Approximately $1.8 million customers in Michigan rely on natural gas from Consumers Energy to primarily heat their homes and businesses during the winter as well as other uses.


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