MPSC approves $162 million in customer refunds from lower taxes for Consumers Energy, DTE Electric

FOR IMMEDIATE RELEASE   Dec. 20, 2018

Contact: Nick Assendelft 517-284-8300
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LANSING, Mich. – The Michigan Public Service Commission (MPSC) today approved an additional $162 million in federal tax law refunds for electric customers of Consumers Energy Co. and DTE Electric Co.

Beginning in January, Consumers will return $69,678,486 to its customers while DTE Electric will return $92,812,177. The refunds will show up on customer bills over six months.

Today’s approvals nearly complete the second round of refunds, known as Credit B, for Michigan’s utility customers, lowering natural gas and electricity bills for residents and businesses. Including today’s rulings, the MPSC has ordered $227,791,999 in Credit B refunds. That’s on top of $379.5 million in refunds in the first round of decisions, known as Credit A.

The Commission last December ordered the state’s investor-owned utilities to refund to their customers the savings realized from passage of the federal Tax Cuts and Jobs Act (TCJA), which lowered corporate rates from 35 percent to 21 percent.

Impact of today’s MPSC rulings on customer bills

Utility

Annualized amount

Monthly decrease*

Months
of refunds

Case No.

Consumers Energy Co.

$69,678,486

$3.08

6 (January-June 2019)

U-20286

DTE Electric Co.

$92,812,177

$3.33

6 (January-June 2019)

U-20284

* Residential average monthly use of 500 kilowatt hours.

The Commission previously approved Credit A monthly bill adjustments of $2.35 for Consumers electric customers and $2.46 for DTE Electric customers. The Credit B refunds approved today will be in addition to the Credit A refunds for both utilities.

The MPSC has nearly completed the second phase of tax proceedings. Only Indiana Michigan Power Co. (I&M) is awaiting a Credit B decision from the Commission.

Under the MPSC’s three-step tax impact adjustment plan, Credit B captures the TCJA’s impact on bills from Jan. 1, when the federal law went into effect, to the date when Credit A tax impact reductions appeared on customers’ utility bills. For most companies Credit A savings started showing up on bills late last summer. Credit A savings will remain in effect until the next time the Commission approves a utility’s new rates, which will have been calculated using the lower corporate tax rate.

The third bill adjustment, called Calculation C, will be announced next year for Consumers gas and electric, DTE Energy gas and electric, Alpena Power Co., I&M, Michigan Gas Utilities Corp., Northern States Power, SEMCO Energy Gas Co., Upper Michigan Energy Resources Corp., and Upper Peninsula Power Co. Calculation C will account for long-term budgeted items not accounted for under Credits A or B.

For an Issue Brief about the tax law update and its impact on utilities, click here.

Other rulings today

I&M ACCOUNTING REQUEST DENIED AGAIN: The Commission denied an application by Indiana Michigan Power Co. (I&M) for deferred accounting treatment of $83.9 million of lost cost recovery due to customer choice (Case No. 20341). The Commission said I&M’s request would be best decided as part of its next rate case. I&M failed to win approval of the deferred accounting treatment in a June request for a rehearing, which the Commission denied.

DTE CAN EXTEND GREEN PRICING ENROLLMENT: DTE Electric Co. will be allowed to continue enrolling customers in its voluntary green pricing pilot program until Dec. 31, 2019 (Case No. 18076). The program allows customers, under the state’s new energy laws, to specify that a certain amount of electricity they buy from DTE is to be generated from renewable energy sources. For an Issue Brief about green pricing programs, click here. For information about programs offered by regulated utilities in Michigan, click here.

UPPCO TO REPLACE STREET LIGHTS WITH LEDS: The Upper Peninsula Power Co. (UPPCo) was given approval to implement a light emitting diode (LED) replacement program for company-owned street lights (Case No. U-20168). UPPCo is to amend its dusk-to-dawn area lighting service tariff to include LED rates, which the utility says will be lower than current rates. The efficient LEDs will replace older and less efficient sodium vapor, mercury vapor, and metal halide fixtures.

DTE GAS COST RECOVERY DENIED: DTE Gas Co.’s application for deferred accounting treatment of $1,102,844 of peak natural gas park service costs was denied (Case No. U-20339). The costs were derived from peak day demand requirements during the winters of 2014-15 and 2015-16. The MPSC said the requested accounting treatment was unwarranted.

To look up cases from today’s meeting, access the eDockets filing system here.

To watch a livestream of the MPSC’s meetings, click here.

For information about the MPSC, visit www.michigan.gov/mpsc, sign up for one of its listservs, or follow the Commission on Twitter.

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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