Licensing and Regulatory Affairs
FOR IMMEDIATE RELEASE December 17, 2020
The Michigan Public Service Commission today approved a $100 million increase in the electric rates for customers of Consumers Energy, a reduction by more than half of what the utility had requested (Case No. U-20697).
Consumers had sought an increase in its electric rates of approximately $254 million, which would have a total impact to customers of $289 million because of the company’s proposed expiration of the Tax Cuts and Jobs Act (TCJA) Calculation C concurrent with the inclusion of those amounts in the requested rates. Consumers said it was asking for the rate increase to fund replacement and modernization of its electric distribution system infrastructure as well as the utility’s work to meet its clean energy goals by eliminating coal-fired electricity generation and reducing carbon emissions.
The company also asked to increase its authorized return on common equity to 10.5% from 10%, with a 52.5% equity ratio. Instead, the order today authorized a return on equity of 9.9%, with the company’s equity ratio set at 51.11%, consistent with previous Commission guidance.
The increase of $100 million over rates approved in a settlement agreement in Case No. U-20134 in 2019 represents approximately 39% of Consumers’ initial rate increase request for the 12 months ending Dec. 31, 2021. Consumers may implement the rate increase effective Jan. 1, 2021. The total amount approved, including the accelerated TCJA credits, equals $134 million.
A residential customer using 500 kilowatt hours of electricity per month would pay approximately $9.17 more per month, an 11.93% increase, factoring in the rate increase and other adjustments.
The order provides further guidance for the Company’s 5-year Distribution Plan filing in the summer of 2021 to refine forecasting methods using advanced metering data and consider performance-based metrics associated with investments. The order also outlines the Commission’s vision for examining costs and benefits of distributed energy resources (DERs), particularly looking at how customers with DERs use the grid now and into the future, starting with a comprehensive study to be conducted in 2021 in line with Senate Resolution 142 of 2020.
Among other issues, today’s order also:
Intervenors in the case were Michigan Cable Telecommunications Association; Michigan Environmental Council, Natural Resources Defense Council, Sierra Club, and the Citizens Utility Board of Michigan; City of Grand Rapids; Michigan Municipal Association of Utility Issues; Association of Businesses Advocating Tariff Equity; Kroger Co.; Walmart Inc.; ChargePoint; Environmental Law & Policy Center, Vote Solar, Solar Energies Industry Association, Great Lakes Renewable Energy Association, and Ecology Center; Michigan Energy Innovations Business Council/Institute for Energy Innovation; Midland Cogeneration Venture LP; Hemlock Semiconductor Operations LLC; Michigan State Utility Workers Council, Utility Workers Union of America, AFL-CIO; Residential Customer Group, and the Michigan Attorney General’s Office.
To look up cases from today’s meeting, access the MPSC’s E-Dockets filing system.
Watch recordings of MPSC meetings on its YouTube channel.
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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