Commission approves additional $242.4M for DTE Electric Co. investments to upgrade grid as utility shows gains in reliability

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The Michigan Public Service Commission today approved additional funding for DTE Electric Co. to continue its work to upgrade its electric distribution system and maintain its more frequent cycle of tree trimming to build on recent significant reliability improvements (Case No. U-21860).

The approval comes amid encouraging signs that DTE Electric is showing tangible improvements in reliability as the MPSC has maintained its intense focus on making the grid more reliable and resilient. For the first time in at least two decades, DTE Electric’s reliability ranking for restoring customers experiencing outages in all weather conditions hit the top quartile among energy utilities around the country in 2025, lowering customer outage times 60% compared to 2024. That noteworthy milestone came after the utility reported a 70% reduction in the amount of time customers were without power from 2023 to 2024. 

The Commission approved rates to increase the company’s revenue by $242,406,000. While this represents a significant investment to support ongoing reliability efforts, the Commission’s approved amount is nearly 58% lower than the $574.1 million the company had originally sought. In its review of the case, the Commission cut funding for programs that were not effective, not supported, or poorly planned, focusing its approved investments only on what is reasonable and prudent and providing benefits to customers.  The Commission also maintained the currently authorized return on equity of 9.9%, as well as the current 50-50 debt-to-equity capital structure. DTE Electric had sought a return on equity of 10.75% and a capital structure of 50.75% equity to 49.25% long-term debt.

A typical residential customer using 500 kilowatt hour (kWh) per month will see an increase of $4.93, or 4.6%, in their monthly bill. The new rates will take effect March 5, 2026.

The MPSC notes that between 2020 and 2025, Michigan residential energy bills increased at a rate that was 5.3% lower than the 22.5% rate of inflation during that period, emphasizing the MPSC’s deep focus on keeping rates lower despite the need for significant utility investments to boost reliability and resilience after decades of poor reliability performance. U.S. Energy Information Administration figures show Michigan’s average monthly electric bill of $119.31 was well below the national average of $142.16 in 2024, the most recent year in which national figures are available.

Building on the findings of the MPSC’s comprehensive, third-party audit of the equipment and operations of DTE Electric and Consumers Energy Co., the state’s two largest electric utilities, the Commission approved a number of investments for DTE Electric to enhance safety and reliability:

• $200 million for pole and pole top maintenance and modernization. This involves inspecting all wood poles, pole-top equipment and overhead circuits and replacing those that fail inspection with stronger, upgraded materials. It also includes speeding up the cadence of visual pole inspections as DTE Electric works toward inspection cycles of 5 years for pole tops and 10 years for poles.
• $348 million in 2026 and $282.5 million in 2027 for DTE Electric’s infrastructure recovery mechanism, which is used for ring-fenced, preapproved spending levels for distribution system upgrades. The company has sought $466.1 million for each of the years 2027 through 2029.
• Spending for DTE Electric to continue its 5-year tree trimming cycle. The Commission directed the utility to track tree-related outages for circuits falling behind the required cycle and present that data in its next general rate case. The Commission also directs the company to develop and file an interim report pertaining to tree trimming and investigate the costs and benefits of moving to a four-year cycle. Tree contact with utility lines is the single largest cause of outages in Michigan.
• Undergrounding pilot projects in Ann Arbor and Attica Township (Lapeer County): The Attica undergrounding project is a pilot developed in a rural area offering reliability benefits to that community while improving the company’s understanding of the benefits of undergrounding rural circuits. The Spruce project is being developed in a suburban area to take advantage of the opportunity to coordinate with Ann Arbor’s expected replacement of roadways in the impacted neighborhood, reducing costs for road removal and restoration. 
• $70.5 million for upgrades to existing substations or to add new substations to reduce system overloading and ease stress on the utility’s distribution system, improving reliability and adding capacity for new or existing customers.

In addition, the Commission also approved $17.8 million for the construction of electric vehicle (EV) charging infrastructure within the company’s service territory, finding that EV sales in the first half of 2025 remained strong and that these new EVs will necessitate additional utility-supported “make-ready” charging investments.

The Commission directed DTE Electric to file a detailed description and justification for rate case expenditures on external consultants in its next rate case. The Commission also required DTE Electric to establish a way to track all rate case costs for future rate cases and provide those costs with each new rate case filing.

The Commission also directed DTE to improve its assistance programs for low-income customers to better educate them on how to access assistance and get funding for programs such as home weatherization, energy waste reduction and efficiency that help bring down household energy costs.

Among other steps to manage costs, the Commission disallowed $63.7 million in costs for projects that the Commission found lacked the necessary level of detail to allow for full evaluation, as well as $31.2 million associated with infrastructure improvements at the company’s former Trenton Channel coal plant based on the lack of firm contracts for the work and the absence of the relevant internal approvals and authorizations. The Commission also disputed DTE Electric Co.’s projections on the rate of inflation, ultimately adopting a methodology that reduced capital costs by $5.58 million for 2025 and $9.6 million for 2026.

Intervenors in the case included the Michigan Department of Attorney General; City of Ann Arbor; Michigan Environmental Council; Natural Resources Defense Council; Sierra Club; Citizens Utility Board of Michigan; Environmental Law and Policy Center of the Midwest; Ecology Center; Union of Concerned Scientists; Vote Solar; Michigan Energy Innovation Business Council; Institute for Energy Innovation; Advanced Energy United; Foundry Association of Michigan; Energy Michigan Inc.; The Kroger Co.; Utility Workers Union of America, AFL-CIO Local 223; Michigan Municipal Association for Utility Issues; Michigan Coalition to Protect the Public Rights of Way; Soulardarity; We Want Green, Too; Electrify America Inc.; Gerdau MacSteel Inc.; Great Lakes Renewable Energy Association; Walmart Inc.; Association of Businesses Advocating Tariff Equity; International Transmission Co.; and Michigan Cable Telecommunications Association. MPSC Staff also participated in the proceeding.

The MPSC serves as an expert, impartial regulator committed to consumer protection, fairness and transparency. For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the MPSC on Facebook, X/Twitter, LinkedIn or Instagram.

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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