The Michigan Public Service Commission (MPSC) on Wednesday approved a settlement in a natural gas rate case for Consumers Energy, one of the state’s largest electric companies.
According to the Department of the Attorney General, Consumers Energy provides electricity to approximately 1.9 million customers throughout Michigan and natural gas to 1.8 million customers across the state.
Attorney General Dana Nessel attends Gov. Gretchen Whitmer’s fifth State of the State address on Jan. 25, 2023. (Andrew Roth/)
Consumers Energy initially requested a revenue increase of $212 million in December 2022, which would have led to a 7.8% rate increase for ratepayers. However, Michigan Attorney General Dana Nessel and several other entities intervened, with Nessel filing testimony that the company should only receive a rate increase of about $52.3 million. That was adjusted to $52.7 million after further review.
Under the final settlement, Consumers Energy will raise its rates by $95 million, with the increase taking effect on Oct. 1. According to the MPSC, which regulates electrical companies in the state, the rate increase will result in a 4.2% increase for most residential customers, with a typical customer who uses 100 ccf of natural gas monthly seeing an increase of $4.20.
According to the MPSC, the initial request for a rate increase was made to address capital infrastructure improvements, investment in technology and operational efficiency, and increased financing costs.
The Attorney General’s Office also successfully opposed Consumers’ initial request for a $2-per-month increased service charge for all residential and some commercial customers, and the increased charge was not included in the final settlement.
In a statement, the Attorney General’s Office said the settlement provides the utility with sufficient revenues to provide its customers with safe and reliable natural gas service and to perform necessary repairs and upgrades to its infrastructure at more reasonable rates than the company projected.
“My office takes very seriously its commitment to defend Michigan consumers, and often that means defending utility customers from exorbitant and constant rate hike requests before the state,” Nessel said.
“The settlement announced [Wednesday] saves ratepayers millions, slashes the rate hike demand in half, and completely blocked an unnecessary intended service fee increase that otherwise would have landed on the utility bills of every residential Consumers Energy natural gas customer in Michigan,” Nessel said.
According to the MPSC, Consumers’ most recent gas rate increase of $170 million was approved in July 2022.
In a statement, Consumers Energy said the settlement will allow it to replace thousands of lines connecting its natural gas system to homes and businesses, replace hundreds of miles of the pipeline “expressway” that powers the natural gas system, and rehabilitate or retire outdated infrastructure.
“Our customers look to Consumers Energy for natural gas, and we take that responsibility seriously in our cold-weather state,” said Christopher Fultz, Consumers Energy’s vice president of natural gas operations. “We want people to know we’re making our system stronger, safer and cleaner, and we can do that while keeping bills affordable for people who count on us.”
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authored by Kyle Davidson
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