MPSC approves DTE Electric $65 million rate increase

FOR IMMEDIATE RELEASE   April 18, 2018

Contact:         Nick Assendelft 517-284-8300

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MPSC approves DTE Electric $65 million rate increase

LANSING, Mich. – The Michigan Public Service Commission (MPSC) today authorized DTE Electric Co. to increase its rates by $65,239,000 effective May 1.

The total is 28 percent of the $231 million DTE sought when it filed its rate case in April 2017 (Case No. U-18255), and are 1.4 percent higher than rates set in its last rate case.

In November, the Detroit-based utility self-implemented a rate increase of $125 million, which it was legally allowed to do, as it awaited a decision by the MPSC on its rate case. Since the total approved today is just over half of the amount that was self-implemented, DTE will file a separate case to determine how much is refunded to customers.

New energy laws that went into effect in April 2017 abolished the self-implementation option for utilities and DTE’s is the last rate case of any utility where the practice is allowed.

"It's important that DTE Electric customers have a reliable electrical grid so they can be confident power is available when it's needed," said Sally Talberg, chairman of the MPSC. "The Commission believes it is vital that utilities are committed to upgrading infrastructure to promote safety, provide reliable service and reduce customer outages."

Infrastructure spending was approved in several areas to improve electric infrastructure and reliability for customers. DTE will spend on distribution operation and maintenance, including tree trimming; pole top maintenance; substation and station improvements; and system upgrades to prevent problems associated with potentially overloaded equipment as part of the Gordie Howe International Bridge development project in Detroit.

The company’s previous rate increase of more than $184.3 million was approved in January 2017 (Case No. U-18014).

The Commission decided to address the impact of the federal tax law changes in a separate proceeding (Case No. U-18494), which will begin in 30 days.

For an Issue Brief on utility rate proceedings, click here.

DTE Electric Co. Case No. U-18255 Fact Sheet

  • Revenue increase granted: $65,239,000

  • Return on common equity (ROE): 10 percent

  • Capital mix: 50 percent equity to 50 percent debt

  • Overall rate of return: 5.34 percent

  • Rate base: $15,259,409,000

  • DTE proposed ROE of 10.5 percent, rate of return of 5.57 percent.

  • The Commission approved $1,587,000 in 2017 and $6,904,000 in 2018 for the company's 4.8 kilovolt relay improvement.

  • Commission adopts the Staff’s revised position, approving an additional $6.243 million for Advanced Distribution Management System, while DTE requested $34.1 million.

  • New Business Specific Projects spending for 2017 was approved at $29,318,000, and $9,630,000 for 2018. This includes work to provide new services by extending overhead and underground facilities.

  • $6.1 million was rejected to expand the Programmable Controllable Thermostat Program on the basis that DTE had only installed 50 of 10,000 thermostats it was approved to purchase by the PSC in 2017.

  • DTE sought $51.34 million for processing uncollectible accounts and the MPSC concurred. The company said it serves 487,000 low-income customers.

  • The monthly residential customer service charge will remain at $7.50 and the commercial secondary service charge will remain at $11.25.

  • Revised rate design for customers with stand-by utility service to better reflect the cost to serve those customers. Stand-by service is available for customers who produce their own power and who use the utility for back-up power.

  • AMI opt-out charges won’t change at an initial $67.20 and $9.80 per month.

  • In its next general rate case filing, DTE will address eliminating the summer monthly residential block rate and replace it with a summer on-peak/off-peak rate, and a proposal for allowing customers who opt out of AMI meters to retain the existing rate structure.

For more information about the MPSC, please visit www.michigan.gov/mpsc or sign up for one of the Commission’s listservs.

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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