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MPSC approves $1.7M rate increase for customers of Northern States Power Co. in Upper Peninsula
March 17, 2022
Media contact: Matt Helms 517-284-8300
Customer Assistance: 800-292-9555
The Michigan Public Service Commission today approved a settlement agreement that permits Northern States Power Co. of Wisconsin (NSP) to raise its electricity rates by $1.7 million in its service territory in two western Upper Peninsula counties.
The settlement agreement (Case No. U-21097) approves a total revenue requirement of $2,530,513, with a return on common equity of 9.7% and an overall electric rate of return of 5.89%.
The increased rates will take effect in customer bills beginning April 1. A typical residential customer using 500 kilowatt hours per month will see an increase of $8.69, or 12.4%, in their monthly bill. NSP, part of Xcel Energy Inc., serves about 9,000 electricity customers in Gogebic and Ontonagon counties.
As part of the agreement, NSP agrees not to seek a Michigan rate increase again before Jan. 1, 2024. The utility also will implement an earnings-sharing mechanism for 2022 and 2023 in which it will refund to its electric customers any multi-jurisdictional earnings above the authorized 9.7% rate of return on common equity.
NSP projected a revenue deficiency of $2,130,513 based and sought to recover $400,000 of depreciation and interest expense deferred in 2021 as a regulatory asset, consistent with Case No. U-20901. The settlement agreement permits NSP to amortize over 4 years the depreciation deferral total of $400,000.
Other terms of the agreement:
- NSP will implement in 2022 a low-income assistance service program and agrees to donate $25,000 per year in 2022 and 2023 for low-income utility bill assistance.
- NSP will perform tree-trimming or other vegetation management on at least 75 miles of overhead lines as part of its efforts to maintain service reliability.
- The utility will provide to the MPSC a plan to reduce electric outages in its Michigan service territory and improve electric service reliability. NSP also will provide comparative actual reliability data for its Michigan service territory for the relevant historic period.
The Citizens Utility Board, the Association of Businesses Advocating Tariff Equity and the Michigan Department of Attorney General were intervenors in the case. MPSC Staff also participated. All parties agreed to the settlement agreement.
MPSC TAKES NEXT STEPS IN UPDATES OF UTILITY SERVICE RULES AND STANDARDS FOR RELIABILTY AND CUSTOMER PROTECTIONS
The MPSC today approved several orders dealing with proposed updates to rules and technical standards for utility service in Michigan, updates that the Commission has fast-tracked as it works to improve electric service reliability, make power outage credits automatic, and strengthen consumer protections for electric and natural gas customers.
The Commission approved rules updates that will:
- Increase power outage credits to $35 from $25, plus $35 per additional day beyond acceptable thresholds, and make the credits automatic. The updates also shorten required times for utilities to restore long-duration outages; reduce the amount of time first responders must guard downed wires until they're relieved by a utility lineworker; update reliability standards to ensure Michigan's performance indicators match industry guidelines; and establish annual reporting requirements for rural electric cooperatives and all investor-owned utilities to ensure they're reporting service quality and reliability performance to the Commission (Case No. U-20629).
- Update technical standards governing matters including new requirements for electric utility and cooperative reporting on outages; additional requirements for utility line clearing programs; updates to electric metering, metering equipment inspections and tests, and requirements for cybersecurity programs (Case No. U-20630).
- Ensure customers’ service isn’t shut off without proper notice, that customers aren’t billed for electricity they didn’t consume because of incorrect meter registration or other billing issues, and to help utility customers more easily access information about their rights to a hearing on billing disputes (Case No. U-21150).
The changes will be submitted to the Legislative Service Bureau and the Michigan Office of Administrative Hearings and Rules for their formal approvals, and then sent to the Joint Committee on Administrative Rules.
MPSC FINDS INDIANA MICHIGAN POWER CO (I&M) FAILED TO COMPLY WITH STATE ENERGY WASTE REDUCTION LAW
The MPSC today found that Indiana Michigan Power Co. failed to comply with savings targets requirements in Public Act 295 of 2008, as amended by Public Act 342 of 2016 (Case No. U-20867). The Commission found that I&M did not meet its planned energy waste reduction (EWR) savings targets as well as the statutory minimum 1% savings and directed the company to file quarterly reports detailing the company’s steps to come into compliance. The quarterly reports must continue until the Commission determines the company is in compliance. The Commission warned I&M that if the utility doesn’t demonstrate substantive effort to regain compliance, the MPSC could initiate a show cause proceeding in the matter. The Commission also noted that noncompliance with EWR requirements likely meant that I&M had to generate or purchase additional electricity to make up for the unachieved savings, so the Commission will closely review I&M’s power supply costs to ensure they were reasonable and prudent. The Commission directed I&M, in its 2021 power supply cost recovery reconciliation filing in Case No. U-20805, to provide a detailed explanation of the impacts of its failure to comply with EWR savings requirements. The Commission approved I&M’s request for reconciliation of its 2020 EWR reconciliation with a net overrecovery of $6,385,360.
MPSC APPROVES INNOVATIVE ENERGY WASTE REDUCTION PLAN SETTLEMENT WITH CONSUMERS ENERGY
The MPSC today approved a settlement agreement on Consumers Energy Co.’s energy waste reduction (EWR) plan for 2022-2025 that includes additional assistance for low-income electric and gas customers and innovative approaches to connecting assistance programs with EWR efforts as a long-term approach to reducing these customers’ energy burden (Case No. U-20875). Among other terms of the settlement, Consumers will increase funding for more holistic low-income single family and multi-family housing energy efficiency measures. The company will continue its Income Qualified Health and Safety Pilot, which will include an energy assistance arrearage component for the utility’s eligible Consumers Affordable Resource for Energy, Home Heating Credit and State Emergency Relief recipients. The EWR plan also commits to continuing the practice of providing opportunity to Michigan-based business enterprises and business enterprises owned by minorities, women, veterans and service-disabled veterans and LGBTQ individuals. Consumers also will provide training and education on the use of healthy building materials for its contractors. Intervenors in the case were the Michigan Department of Attorney General; Natural Resources Defense Council; National Housing Trust; the Ecology Center; the Sierra Club, and the Association of Businesses Advocating Tariff Equity. MPSC Staff also participated.
MPSC APPROVES UPDATES TO ELECTRIC INTERCONNECTION AND DISTRIBUTED GENERATION RULES
The MPSC has approved upgrades to standards governing interconnection and distributed generation, part of the MPSC’s MI Power Grid initiative to maximize Michigan’s transition to clean, distributed sources of energy (Case No. U-20890). The changes are meant to update the rules governing interconnection, distributed generation, and net metering by addressing significant changes in Michigan’s energy landscape since the promulgation of legacy net metering rules in 2009. Today’s order approves and adopts Interconnection and Distributed Generation Standards and the Electric Interconnection and Net Metering Standards, which the Commission will submit to the Legislative Service Bureau and the Michigan Office of Administrative Hearings and Rules for formal approvals. Once approved, the rules will be sent to the Joint Committee on Administrative Rules.
MPSC GRANTS CONSUMERS ENERGY REHEARING IN ELECTRIC RATE CASE
The MPSC today granted Consumers Energy Co.’s petition for a rehearing on parts of the Commission’s order on the utility’s most recent electric rate case (Case No. U-20963). Today’s order corrects the disallowance for fleet spending in 2019, reducing the disallowance to $6.933 million from the previous disallowance of $17.547 approved in the Commission’s Dec. 22 order. Today’s order authorizes Consumers Energy to increase its annual electric revenues by $4,614,239, on a jurisdictional basis, over the rates approved Dec. 22. The Commission also agreed to correct a reduction in depreciation expense that will increase the company’s revenue requirement by $3.426 million.
MPSC APPROVES REVISIONS TO DTE ELECTIC CO.’S INTERRUPTIBLE SERVICE TARIFFS
The MPSC approved DTE Electric Co.’s application to amend its interruptible service tariffs in response to the Commission’s ongoing work to improve load-modifying resources after poor response to calls to reduce energy use among demand response customers during the January 2019 statewide energy emergency as a polar vortex strained electricity production. The revised tariffs (Case No. U-21023) require DTE Electric’s approximately 550 commercial-industrial customers on the tariffs to annually confirm their understanding of requirements and responsibilities, verify they have an interruption plan and the ability to interrupt within required timeframes when called to do so, along with notifications from DTE Electric about annual simulations to test communications systems. In addition, the Commission approved DTE Electric’s amended residential and small commercial interruptible rates for interruptible central air, dynamic peak pricing and interruptible water heating to make them clear and consistent with the utility’s other interruptible rate schedules and to include testing and evaluation as a reason for interruption.
COMMISSION UPHOLDS EARLIER RULING BY ADMINISTRATIVE LAW JUDGE IN CONSUMERS ENERGY IRP CASE
The MPSC today granted leaves to appeal to Consumers Energy Co. and to Dearborn Industrial Generation LLC in matters involving testimony the two companies contended included confidential, proprietary or commercially sensitive information not subject to public disclosure in proceedings involving Consumers Energy’s integrated resource plan (Case No. U-21090). The Commission’s order in the case affirmed the administrative law judge’s Dec. 28 ruling on a motion sought by the Michigan Environmental Council, Natural Resources Defense Council and Sierra Club to revoke the protected status of some testimony in the case.
To look up cases from today’s meeting, access the MPSC’s E-Dockets filing system.
Watch recordings of the MPSC’s meetings on the MPSC’s YouTube channel.
For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs, or follow the Commission on Twitter or LinkedIn.
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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