Licensing and Regulatory Affairs
FOR IMMEDIATE RELEASE September 10, 2020
The Michigan Public Service Commission today approved a settlement agreement that cut by approximately 40% the amount of a rate increase granted to Consumers Energy’s natural gas customers (Case No. U-20650).
Under the settlement agreement, Consumers Energy is approved to raise rates by $144 million, about 60% of its initial request in December 2019 for $245 million. Consumers argued that the additional revenue is needed for natural gas system infrastructure replacement and rising costs for operations and maintenance, financing and environmental response.
Intervenors in the case were the Association of Businesses Advocating Tariff Equity; the Michigan Department of Attorney General; Citizens Utility Board of Michigan; Energy Michigan, Inc.; Lansing Board of Water & Light; Michigan State University; Midland Cogeneration Venture L.P., the Residential Customer Group and MPSC Staff. All parties signed the agreement except for Michigan State University, which filed a statement of non-objection.
New rates are to take effect Oct. 1, 2020. Beginning Oct. 1, 2020, a typical residential customer using 100 cubic feet of gas a month will see a $6.72, or 9.1% increase, in their monthly bill.
In other key terms of the agreement, Consumers Energy will:
In addition, costs or investments related to the Jan. 30, 2019 fire at the utility’s Ray Compressor Station in Macomb County will not be approved or disallowed in this case. Consideration of rate recovery of related costs will be addressed in Consumers Energy’s next general gas rate case, once any insurance proceeds received by the company associated with these capital investments are known.
The agreement grants an authorized return on common equity of 9.9%, approximately 60 basis points below the utility’s initial request. It also allows a capital structure of 52.05% equity. The company will propose a plan to achieve a more balanced capital structure in its next rate case, which it agrees not to file earlier than Dec. 1, 2021.
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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