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AG Nessel Urges Commission to Strike Down DTE Request for Ratepayer Reimbursement of Inflated Business-to-Business Costs

LANSING – Michigan Attorney General Dana Nessel has filed expert testimony with the Michigan Public Service Commission in two separate dockets requesting they disallow recovery of nearly $18 million of excess natural gas costs billed by DTE Gas Company and DTE Electric Company to its customers during 2022 and part of 2023.   

The excess gas costs arise from a utility-friendly gas transportation contract that DTE signed in 2014 with a formerly affiliated interstate pipeline company, NEXUS Transmission Company (NEXUS). The initial justification from DTE to its customers and the Commission was that NEXUS would transport gas supply from the Appalachian region at significantly lower prices than available from other existing pipelines. The premise was that these savings would more than offset the significantly higher cost of transportation charged by NEXUS. In reality, there have been no cost savings and, according to industry experts and other parties participating in the proceedings before the Commission, the purported savings are not likely to occur in the future.  

“It has become increasingly clear that the phantom savings DTE promised its customers when it struck a deal with NEXUS are never going to happen,” said Nessel. “Instead, customers are needlessly paying millions of dollars annually to enrich a former DTE affiliate. The Commission should never have allowed these ratepayer bailouts, and we’re imploring them to reconsider this practice. All this scheme accomplishes is an increased flow of customer dollars through DTE and out the door into the pockets of a pipeline profiting greatly from a deal struck ten years ago that has never delivered on the promises made to ratepayers.”     

Since NEXUS began operation in November 2018 and through the end of the 2022 fiscal period, DTE Gas and DTE Electric have overcharged their customers in excess of $80 million due to the arrangement with NEXUS, and they have been continually allowed to do so by the Commission. Although the Commission has approved recovery of a portion of these excess costs in prior years, the Attorney General requests that beginning with the open cases in U-21065 and U-21051, the Commission disallow recovery of $17.6 million of excess costs and order the two DTE subsidiaries (gas and electric) to return that total amount to DTE bill-payers. Under the Attorney General’s request, DTE Gas customers should be refunded $7.5 million and DTE Electric customers should receive $10.1 million for overcharges billed primarily in 2022. 

The Attorney General encourages the Commission to closely re-evaluate its prior decisions, which have permitted DTE to recover costs billed by a former affiliate above costs billed by competing pipelines under a very favorable gas transportation contract with NEXUS. Michigan utility customers are already paying utility bills above what other utilities charge to their customers in surrounding states and the Attorney General’s request to disallow a portion of excess gas costs will hold DTE accountable to minimize fuel costs for customers and help alleviate the utility cost burden on Michigan ratepayers. 

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

DTE sells natural gas to 1.3 million customers across the state and electricity to approximately 2.2 million customers in Southeast Michigan. The Attorney General was successful in January in keeping over $600,000 in unjustifiable costs off the bills of DTE natural gas customers, and that same month announced her intervention in a rate case wherein DTE is seeking to raise residential gas rates by nearly 10%. In March the Attorney General filed in DTE Electric’s latest rate hike request, filed a mere four months after their last electric rate hike was approved by the Commission. AG Nessel recently filed comment with the MPSC critical of DTE’s 5-year Distribution Plan, which neglected to provide utility accountability.


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