Licensing and Regulatory Affairs
FOR IMMEDIATE RELEASE May 8, 2020
The Michigan Public Service Commission today approved a $188.3 million rate increase for DTE Electric Co. (Case No. U-20561), an increase authorized to include new investments in critical infrastructure, particularly the electric distribution system, to support electrical safety and reliability.
While there is significant need for the utility to replace and modernize aging infrastructure such as substations, poles, and wires to improve reliability, the increase approved was substantially lower than what DTE Electric had sought. The utility had requested a $351 million base rate increase. Instead, the Commission granted an increase of $188,285,000, 47 percent lower than requested. DTE Electric is authorized to implement the rate increase starting May 15.
DTE Electric said the key factors contributing to its projected shortfall are increased investments made in its critical infrastructure facilities to continue safe and reliable service to customers, and associated depreciation and property tax increases, in addition to an increase in operation and maintenance expense. The rate increase is based on the Commission’s review of DTE Electric’s investments, expenses and revenue projected for the 12-month period ending April 30, 2021.
Preliminary estimates are that a residential customer using 500 kilowatt hours of electricity per month would pay approximately $3.93 more per month, a 4.7% increase, starting with the June 2020 bill. The exact amount is still to be verified subject to a seven-day tariff review. The Commission notes that the impact of the increase on customer bills will be softened in the near term by DTE Electric’s recent announcement that it will pass along $30 million to $40 million in bill relief to its electric utility customers for the months of June and July, from savings realized through lower fuel prices spent on generating electricity.
Based on progress to date with tree trimming reducing power outages, the Commission authorized the extension of a multi-year tree trimming program through 2022. This extension will provide DTE Electric greater certainty for workplace attraction and retention in this critical area. Trees are a leading cause of power outages and can create safety hazards when trees come into contact with live electric wires. DTE Electric has more than doubled its tree trimming crews to support this safety and reliability work.
In other highlights from today’s order, the Commission:
In addition to the Attorney General, ABATE and MPSC Staff, intervenors in the case were the Michigan Cable Telecommunications Association; Kroger Co.; Michigan Environmental Council; Natural Resources Defense Council; Sierra Club; Citizens Utility Board; Great Lakes Renewable Energy Association; Residential Customer Group; Environmental Law and Policy Center; Ecology Center; Solar Energy Industries Association; Vote Solar; Utility Workers Union of America Local 223; Energy Michigan; Foundry Association of Michigan; Soulardarity; Central Transport, LLC; Central Transport, Inc.; Crown Enterprises, Inc.; Detroit International Bridge Company; Universal Truckload Services, Inc., and Wal-Mart Inc.
MPSC Chairman Sally Talberg noted that rate cases are subject to a 10-month statutory deadline for the Commission to issue a final decision, and she expressed appreciation for the efforts by the administrative law judge, Staff, and parties to bring this case to a timely resolution, especially given the challenging circumstances with the COVID-19 pandemic.
“The Commission does not take lightly its decision to authorize DTE to raise its rates but we are bound by law to issue a decision now,” Talberg said. “There are pressing needs to upgrade aging infrastructure to ensure safe, reliable electric service.”
Talberg added, “The MPSC has worked closely with other state departments, social service agencies and utilities across the state to strengthen shutoff protections and assistance programs for vulnerable households, and we encourage anyone with financial challenges to not wait and to reach out now for help.”
To look up cases from today’s meeting, access the E-Dockets filing system here.
To watch recordings of the MPSC’s meetings, click here.
DISCLAIMER: This document was prepared to aid the public’s understanding of certain matters before the Commission and is not intended to modify, supplement, or be a substitute for the Commission’s orders. The Commission’s orders are the official action of the Commission.
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