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MPSC approves costs related to NEXUS pipeline for DTE Gas Co. but warns of additional scrutiny
July 27, 2022
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At a meeting held in Detroit to provide southeast Michigan residents a chance to address Commissioners directly, the Michigan Public Service Commission today approved a cost recovery plan for DTE Gas Co. but warned the utility that costs arising from the use of the NEXUS Gas Transmission LLC pipeline would face scrutiny and may not be recovered.
A partnership between the utility’s parent company, DTE Energy, and Enbridge Inc., NEXUS is a 256-mile, 36-inch interstate pipeline transporting natural gas from receipt points in eastern Ohio to interconnections in southeast Michigan.
In Case No. U-20236, the MPSC approved DTE Gas Co.’s gas supply cost recovery (GSCR) reconciliation for the period ending March 31, 2020, as modified, reflecting a net overrecovery, with interest, of $953,138 as its 2020-2021 GSCR beginning balance and a net overrecovery, with interest, of $1,801,559 as its 2020-2021 gas customer choice beginning balance.
While it found DTE Gas’ NEXUS costs and the company's contract with Texas Eastern Appalachian Lease Project (TEAL) reasonable and prudent, the Commission indicated it will continue to closely scrutinize the costs.
The Commission directed DTE Gas to provide in its next reconciliation a robust record to justify the reasonableness of the combined transportation rate of $0.845 per dekatherm per day and evidence of steps taken to minimize the cost of gas, including efforts to renegotiate the transportation agreement. Noting its statutory obligation to evaluate the reasonableness and prudence of the costs incurred in excess of costs approved in a GCR plan case, the Commission said it could disallow certain costs when enough evidence shows them to be unreasonable or when there is not enough information to demonstrate their reasonableness. The absence of such evidence requested in future reconciliation proceedings, the Commission cautioned, shall be an indication that the combined transportation rate is unreasonable and should be disallowed.
The Commission also indicated it expects DTE Gas in its GCR reconciliation case to provide sufficient evidence of the reasonableness and prudence associated with the extension of the TEAL amendment, including documentation of the costs and anticipated savings of the extension.
The Michigan Department of Attorney General, the Retail Energy Supply Association intervened in the case. MPSC Staff also participated.
MPSC takes next steps in MI Power Grid work on new tech and business models
The MPSC today took next steps in its ongoing MI Power Grid effort to maximize the benefits of Michigan’s clean energy transition, addressing an MPSC Staff report from a key workgroup.
In Case No. U-20898, the Commission addressed the MPSC Staff’s report on the work of the New Technologies and Business Models workgroup and its recommendations. The workgroup was established to address preparing for opportunities and challenges associated with commercialization of new technologies and business models such as electric vehicles, electric storage, microgrids, space and water heating using heat pumps, and others still under development, at customer and utility scale. The Commission expressly directed the workgroup to address regulatory and business model barriers to deployment and adoption of clean, distributed energy resources, with an eye toward equity for communities disproportionately impacted by issues such as pollution and a higher energy burden.
The Commission’s order today:
- Directs Consumers Energy Co., DTE Electric Co., Indiana Michigan Power Co., Upper Peninsula Power Co., Alpena Power Co., Northern States Power Co., and Upper Michigan Energy Resources Corp. to file proposed Michigan-specific uniform benefit cost analysis requirements, including a proposed societal cost test, that could be used in multiple types of dockets including pilot proposals, distribution planning, and rate cases, no later than Sept. 1, 2022.
- Requests comment from stakeholders and others on a proposal to expedite the review process for innovative pilot projects to help speed up learning about technologies and business models that can further the state’s goal to reach economy-wide carbon neutrality by 2050, as outlined in Gov. Gretchen Whitmer’s Executive Directive 2020-10 establishing the MI Healthy Climate Plan.
- Invites comments on questions raised by MPSC Staff addressing the development of alternative business models. Comments should reference Case No. U-20898 and should be received no later than 5 p.m. Sept. 26, 2022. Written comments should be sent to Executive Secretary, Michigan Public Service Commission, P.O. Box 30221, Lansing, MI 48909. Electronic comments may be e-mailed to firstname.lastname@example.org.
MPSC RAISES FUNDING FACTOR FOR PROGRAM THAT FUNDS ASSISTANCE, SELF-SUFFICIENCY SERVICES FOR LOW-INCOME HOUSEHOLDS
The Commission today set at 90 cents the funding factor for the state Low-Income Energy Assistance Fund, a program that each year provides a maximum of $50 million for home energy assistance and self-sufficiency services for thousands of income-qualified Michigan households Case No. U-17377. The amount is a 3-cent increase from the year before. The MPSC each year sets the funding factor, capped at $1. The factor is collected monthly from each retail billing meter from participating investor-owned utilities, municipally owned electric utilities or rural cooperative electric utilities —no more than one meter per household — to raise funding distributed through the Michigan Energy Assistance Program.
COMMISSION APPROVES ALPENA POWER PILOT PROJECT TO EXPAND INSTALLATION OF ELECTRIC VEHICLE CHARGERS IN NORTHERN MICHIGAN
The MPSC approved Alpena Power Co.’s application for approval of a pilot program to allow broader installation of electric vehicle chargers in its service territory, allowing the participants to take advantage of a Michigan Department of Environment, Great Lakes and Energy (EGLE) grants through which utilities, customers and EGLE share costs for new chargers, especially in rural areas of the state (Case No. U-21234). Today’s order approves the initial phase of the pilot program for a five-year period and authorizes the utility to create a regulatory asset of up to $500,000 for its share of the costs, which it will seek to recover in a future rate case. Alpena Power must file an annual report by July 1 detailing the number of chargers installed, a map of their locations, and project utilization data by month and/or season. The company also must file an analysis of the costs and benefits to ratepayers, as well as an evaluation of new EV charging-specific tariff offerings to facilitate EV charging integration for other customer classes in its next electric rate case. Approval will not increase current rates for existing customers.
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.
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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