Overview:

-Michigan regulators approve $153.8 million electricity rate hike for Consumers Energy.
-The 2.8% increase is significantly lower than the 5.6% initially sought by the company.
-Citizens Utility Board of Michigan criticizes the decision, says Consumers failed to justify the necessity of the rate hike.

Michigan regulators approved a $153.8 million electricity rate increase for Consumers Energy on Friday, a 52% reduction from the $325 million sought by the company.

The approved rates will take effect April 4, adding $2.78 to the average customer’s monthly power bill. This comes just 12 months after the Michigan Public Service Commission approved a $92 million electric rate hike for Consumers’ ratepayers.

In a statement, Michigan Attorney General Dana Nessel criticized what she said is a “never-ending cycle” of rate hikes for utility customers.

“Consumers Energy and DTE keep coming back to the trough, and over and over again Michiganders are forced to pay higher and higher bills just to keep the lights on,” she said.

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DTE Energy has filed paperwork with regulators stating its intention to request another rate increase April 23, as Planet Detroit reported last week.

Nessel argued in testimony that Consumers should receive a $82.9 million rate hike or 1.8% increase. The $153.8 million hike represents a roughly 2.8% increase.

Consumers said in a statement that the MPSC’s decision will allow the company to move forward with an “aggressive plan to clear trees near power lines and strengthen the grid to deliver energy to nearly 2 million homes and businesses.”

Consumers provides energy to roughly 1.8 million customers across a broad swath of Michigan’s Lower Peninsula. The utility’s service area covers 62 counties, including the cities of Battle Creek, Bay City, Flint, Grand Rapids, Jackson, Kalamazoo, and Saginaw.

The investments approved by the MPSC Friday include:

  • Over $125 million for tree trimming, while also directing the company to consider increasing its vegetation management to a four-year tree-trimming cycle.
  • Low-voltage distribution investments aimed at reducing the number of customers experiencing frequent outages. These investments are intended to reduce the number of Consumers ratepayers experiencing four or more outages a year from 10.7% in 2023 to 6%.
  • Investments in high-voltage distribution to improve grid reliability.
  • Over $86 million for a second year of recovery of strategic distribution investments for low-voltage line reliability, resilience, and system protection.
  • System modernization to allow the utility to identify grid problems, automatically reroute power, and isolate the impact of disruptions.

Amy Bandyk, executive director of the Citizens Utility Board of Michigan, told Planet Detroit that Consumers failed to prove the $153.8 million rate increase was necessary.

“While recognizing that the rate increase is only about half of what the utility asked for, in many respects the MPSC appears to still be deferential to Consumers Energy on approving capital spending that the utility has failed to justify as either effective or cost-effective for reliability,” she said.

Among the issues Bandyk flagged in the rate-case is the suggestion that Consumers “consider” increasing its tree trimming to a four-year cycle, saying it could take over a year for the company to complete a study on the matter.

“Consumers Energy customers should not have to wait years for their utility to follow basic industry standards on tree trimming, one of the most effective ways of preventing outages,” she said.

MORE MICHIGAN UTILITIES COVERAGE

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Brian Allnutt is a senior reporter and contributing editor at Planet Detroit. He covers the climate crisis, environmental justice, politics and open space.