This page explains why and how energy costs change, shows Michigan’s national standing, and outlines how the MPSC improves affordability and reliability, reduces costs, and expands assistance. It also guides residents on understanding their utility bills and directs them to programs that support energy efficiency and affordability for Michigan families.
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Fact: Michigan ranked 18th nationally for lowest annual combined electric and natural gas costs in 2023 and 2024. Customers in 32 other states and the District of Columbia paid more than Michiganders, according to an MPSC analysis of data from the U.S. Energy Information Administration.
Fact: While Michigan’s electric rates are higher than neighboring states, Michigan’s average monthly electric bill in 2024 was $119.31, nearly $23 below the national average of $142.16 and almost $2 lower per month than the average of neighboring states, according to the U.S. Energy Information Administration. Michiganders paid less per month than customers in Ohio ($135.16) and Indiana ($133.06). Michigan’s residential electric bills ranked 15th lowest in the country.
Fact: Michigan customers’ bills rose 4.9% slower than inflation between 2020 and 2026. In that time period, cumulative U.S. inflation rose an estimated 25.3%, and Michigan customers’ bills rose 20.4%. The MPSC’s careful scrutiny of utility rate increase requests has disallowed an average of 50% of utility costs since 2020, saving Michigan customers more than $3.3 billion.
Fact: Even without federal tax incentives, renewable energy sources remain the most cost-competitive sources of new energy generation, according to a study by the financial advisory firm Lazard.
The growth of renewable energy in Michigan has saved more than $948 million in fuel costs — primarily for natural gas and coal — over the last 20 years because a majority of renewable energy produced in Michigan is from wind and solar, which have zero fuel costs.
The main drivers of increasing energy costs are Michigan’s need to upgrade its grid to improve reliability. Major factors include the impact of overall inflation, rising costs for materials, labor and equipment such as transformers and utility poles, volatility in natural gas markets, and federal tax policy changes.
Fact: Under Michigan law, utilities are permitted to seek rate increases every 12 months. The law does not allow the Commission to reject a rate increase outright.
State law (MCL 460.6a) requires the Commission to follow a formal, evidence‑based process that includes public notice, opportunities for individuals and organizations to participate, and a full hearing through the state’s administrative law process. As part of its review, the Commission must decide whether a utility’s costs are reasonable, prudent, and backed up by evidence and testimony.
The Commission cannot block a request by refusing to act on an application. State law dictates that if the Commission does not issue a final decision within 10 months of the date of the utility’s application, the utility’s full rate increase request is automatically approved.