MPSC approves DTE Gas Co. investments in infrastructure, directs improvements in company’s utility assistance

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The Michigan Public Service Commission today approved DTE Gas Co. investments to upgrade and maintain its system while also directing the utility to improve its assistance programs for low-income customers (Case No. U-21973).

The utility sought a total rate increase of $237.5 million, which included $74.8 million in an infrastructure recovery mechanism charge already reflected in rates, for a net rate increase request of $162.7 million. Of that, the Commission approved a net rate increase of $74.52 million, a more than 54% decrease from what the utility sought. The increase will fund continued modernization of the utility’s natural gas transmission and distribution system and increasing operations and maintenance costs.

A typical residential customer using 75 ccf (hundred cubic feet) of natural gas per month will see an increase of $2.87, or 3.34%, in their monthly bill. In addition, due to the approved Infrastructure Recovery Mechanism (IRM) surcharge, customers will see an increase of 68 cents, or a 0.77%, starting January 1, 2027.

The Commission approved a 50-50 debt to equity capital structure and a return on equity (ROE) of 9.8%. The company sought a capital structure of 50.75% equity to 49.25% debt and an ROE of 10.25%.

Among other matters, the Commission:

• Directed DTE Gas to improve how it communicates with customers about existing energy assistance programs to better help lower-income customers to access financial assistance and other programs available. The Commission directed the utility to clearly inform customers about the availability of its assistance programs and how they work and update the Commission on the improvements it made in its next rate case.
• Raised the utility’s Low-Income Assistance Credit for income-eligible customers to $58 from $40. The new amount is approximately 70% of the utility’s proposed average monthly bill.
• Rejected DTE Gas’s request for $284.1 million in capital costs associated with its project to replace the utility’s aging Taggart Compressor Station, finding that the request came with limited evidentiary support and almost no discussion of alternatives. The Commission directed that DTE Gas will need to show significantly stronger support for the project and the reasonableness of its costs should it seek to go forward with the project in the future.
• Disallowed $17.9 million in fleet costs, finding that the company retires vehicles earlier than historical averages without justification and without showing that accelerated vehicle retirements are more cost effective than keeping vehicles in service longer. The Commission also directed DTE Gas to conduct a comprehensive vehicle idling study to determine whether improvements in idling practices can lead to cost savings.
• Directed the company to file an annual report regarding its new market attachment program to ensure existing customers are not subsidizing new customers seeking to connect to the system, including details on customer attachment program performance going forward and comparisons of actual versus projected usage and revenues, and other information as outlined in today’s order.
• Directed DTE Gas to thoroughly investigate concerns raised by intervenors in the case about an apparent racial disparity in the rate of shutoffs for customers of color. The Commission ordered DTE Gas to conduct an analysis of possible corrective measures and submit a report to the MPSC by Dec. 30, 2026.
• Approved a total annual IRM amount of $340 million to be used for the calculation of the surcharge for the 2027-2028 period, $311.02 million for 2029, $310.13 million for 2030, and $309.04 million for 2031. The IRM is used for costs associated with the utility’s replacement of aged bare steel pipe for safety, moving customer meters from inside homes to outside, and replacement of at-risk pipe and aging infrastructure, including pipelines in populated areas. IRM costs are recovered from customers through a monthly bill surcharge. The Commission rejected DTE Gas’s request to include two new programs in the IRM — the utility’s corrosion and cathodic protection program and its regulator station replacement program — instead directing the company to seek cost recovery through base rates.
• Provided guidance on DTE’s 10-year Gas Delivery Plan for long-term capital investments, finding that the plan was overly narrow. The Commission directed the company to conduct a workshop with MPSC Staff and other interested parties and file an updated gas delivery plan in its next rate case.
• Directed DTE Gas Company to include a cost-benefit analysis and long-term plan for the company’s rollout of ultrasonic meters and bypass devices in its next rate case.
• Directed the utility to provide detailed descriptions, costs, and customer benefits to support its customer service operations and maintenance expenses in future rate cases.
• Directed DTE Gas to establish a mechanism to track all costs associated with the preparation and filing of rate cases and disclose the costs associated with their previous rate case with each new filing.
• Directed the utility to work with MPSC Staff to develop more accurate method for calculating the company’s weather normalization adjustment that better aligns with monthly differences between actual and normal Heating Degree Days.
• Required DTE Gas to provide transparent and detailed evidence demonstrating how the company offsets inflation through productivity gains in future rate cases.
• Directed the utility to file direct testimony and exhibits containing an itemized list of projected costs associated with the company’s corporate membership fees, as well as justification for why these costs are required and are in the interests of ratepayers, in future rate cases.

Intervenors in the case were the Michigan Department of Attorney General; Association of Businesses Advocating Tariff Equity; Citizens Utility Board of Michigan; Michigan Environmental Council; We Want Green Too; Urban Core Collective; Soulardarity; Detroit Thermal LLC; City of Ann Arbor; Billerud Americas Corp.; Energy Michigan; Retail Energy Supply Association; and the Utility Workers Union of America Local 223. MPSC Staff also participated.

MPSC RAISES CUSTOMER POWER OUTAGE CREDIT TO $44 PER DAY

The MPSC raised the power outage credit for customers who experience lengthy or repeat outages to $44 per day (Case No. U-20629). That amount is a 77% increase over the $25 power outage credit for customers before the Commission updated the credits in 2023. That year, the Commission raised the one-time $25 credit to $35 and made it available for each additional day a customer is without service. The credits also are now automatic; previously, customers had to request the credits from their utility. The Commission also annually adjusts the credits to account for inflation. Because of these changes, utility customers in 2025 received a total of $11,609,444 in outage credits, a more than ninefold increase compared to $1,213,286 in 2022, the last year under previous rules. The credits are designed to push utilities to improve reliability and get power outages restored faster while offering some compensation directly to the customers who were affected by the utility’s underperformance. The power outage credit kicks in after 96 hours during catastrophic conditions, defined as a utility having 10% or more of its customers without power; 48 hours during gray sky conditions affecting between 1% and 10% of a utility’s customers, and 16 hours during normal conditions. Customers who endure more than 6 sustained power interruptions in one year also are eligible for the outage credit. More information on outage credits is available at the MPSC’s consumer tip sheet.

MPSC APPROVES DTE ELECTRIC’S VIRTUAL POWER PLANT PILOT PROGRAM

The MPSC approved an application by DTE Electric Co. for approval of an expedited pilot program for its Residential Battery Virtual Power Plant (VPP) Program (Case No. U-21653). VPPs aggregate the energy from distributed energy sources such as rooftop solar, batteries, electric vehicles and other customer-sited resources, drawing power from them during times of peak demand to help meet energy needs. In DTE Electric’s VPP, the utility proposed a two-year pilot working with residents of the Veridian at County Farms, a net-zero community in Ann Arbor. The goal is to study customer enrollment rates, customer charging patterns, event participation, solar and battery optimization, and other factors, with up to 100 participating customers compensated financially for allowing DTE Electric to dispatch their residential batteries, at $105 per kilowatt hour, with a maximum total incentive of $504. The Commission directed MPSC Staff to convene a workgroup to consider improvements to the company’s pilot program during the second year of operation, along with barriers to virtual power plants and means to address those issues.

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.

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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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