DTE Residential Customers Gird for Higher Rates; C&I Tariffs to Go Lower

by | Feb 15, 2016

On February 1, DTE Electric – a retail electric supplier that serves 2.1 million customers in the Wolverine State – filed an application (Case No. U-18014) with the Michigan Public Service Commission (MPSC) to increase its rates by $344 million, in order to “make significant improvements to the electric system’s aging infrastructure and equipment.”

According to the local Oakland Press, a DTE spokesperson said that the average customer’s bill would increase by $6 per month at most (for an average monthly bill of $102.25), noting that it is unlikely that the commission will approve the full amount.

For commercial and industrial customers, the news is better. Commercial customers would enjoy an annual decrease of 0.4 percent and large industrial customers would see a rate cut of 5.6 percent, according to DTE.

“Our customers want us to provide more reliable service while keeping the cost of energy affordable and competitive. We are making progress on both fronts,” stated DTE Electric CEO Jerry Norcia.

Specifically, DTE Electric said, the company needs the funds “as soon as possible in 2016, in order to recover… the applicant’s costs associated with the capital costs associated with the addition of plant involving generation and the electric distribution system; capital structure cost changes; the operation and maintenance of applicant’s electric distribution system and generation plants; environmental compliance; and the costs associated with inflation.”

This would be the second rate increase within one year. Last December, DTE received approval from the MPSC (Case No. U- 17767) to raise its overall electric rates by 5.3 percent, or $238.2 million annually. The request was 36 percent below the $370 million that the electric retailer had requested.

According to the Detroit Free Press, the MPSC has one year under current law to issue a final order in the case; however, at the six-month mark, the utility is allowed to self-implement a rate increase up to the full amount, unless the commission steps in to stop it. When the final order is issued, if the commission approves an amount lower than what the utility implemented on its own, the company has to refund the difference to customers plus interest.

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